Real Estate - What value does it really have?
People talk about the advantages and disadvantages of real estate investing as oppose to stock market investing.
Everyone tries to compare risk, long term appreciation rates, leverage...etc between the two.
But I wanted to bring up a specific scenario and see how it plays out. For simplistic reasons lets assume 100% financing at 6% for a 250k house.
If you take out a 30 yr, fixed rate for 250k the total amount you have paid during that time is 540k.So even if you sold your house for 550k and had your loan paid off it essentially nets our with everything you paid. There wasn't really anything gain during those 30 yrs was there? Am I way off?
Don't you really need to outpace the rate of interest + inflation rate during your hold just to make any profit?