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021 – Is a Real Estate a Good Investment?

Real Personal Finance Podcast

021 – Is a Real Estate a Good Investment?

“My parents bought a home for $300k 30 years ago now it’s worth $1mm”

About 4% rate of return in this example

  • Lots many variables: 
    • Cost of renting
    • Interest rates
    • Property taxes & maintenance costs
    • Cash for down payment
  • Is it a good investment compared to what?
    • S&P 500 long-term return is 10% 
    • Historically, housing prices have averaged around 4% per year
    • Huge differences in different parts of the country, but this is national average 
    • Shouldn’t be viewed as a purely financial decision 
  • What about owning a home as a rental property
    • Appreciation
    • Rental Income – cash on cash return 





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