tag:blogger.com,1999:blog-22517597.post7055699850344011843..comments2024-03-03T11:13:39.377+11:00Comments on Moomin Valley: The Returns from HousingmOOmhttp://www.blogger.com/profile/03440274434662150925noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-22517597.post-586470932522147112007-07-27T07:23:00.000+10:002007-07-27T07:23:00.000+10:00I'm thinking about owner occupied property here bu...I'm thinking about owner occupied property here but the same ideas apply to investment property too. If you can get a positive cashflow as in your example (assume you mean the rent paid the mortgage, tax, insurance, maintenance etc?) then sure it is likely to be a fantastic investment. But in my example in Canberra or in most high price areas in the US today you won't get a positive cashflow. Nowhere near it and the only way to make money is if there is a lot of price appreciation. I'm not against investing in property, but the numbers have to make sense.mOOmhttps://www.blogger.com/profile/03440274434662150925noreply@blogger.comtag:blogger.com,1999:blog-22517597.post-18452182211570991452007-07-27T07:12:00.000+10:002007-07-27T07:12:00.000+10:00Returns on rental real estate are significantly mo...Returns on rental real estate are significantly more difficult to measure than other investments like stocks and bonds.<BR/><BR/>For one, its not very liquid. Secondly, the complicated tax benefits make calculating the total gains tough.<BR/><BR/>I like to view real estate as a store of value. Over the long term, it should keep pace with inflation. And if you can get someone else to pay your mortgage, you'll definitely make money.<BR/><BR/>example,a house that currently sells for $500k sold for $50,000 30 years ago. that equates to a below average return of 7.98%.<BR/>But what if you had put down only 20% and the rent paid the rest of the mortgage? <BR/>Now your rate of return is 13.93% which isn't bad, considering you got a tax break for 27.5 years against your other income too!<BR/><BR/>Of course this is overly simplistic, but most detractors of real estate as an investment don't any investment real estate!<BR/><BR/>just my 2 cents.Adventures In Money Makinghttps://www.blogger.com/profile/13626547145630159461noreply@blogger.com