Real estate has certainly changed my life. I own pieces of real estate which I've structured to supplement my IRA. I've done the analysis. There are many short and long-term benefits of owning investment property. Real estate is a get rich slow business.
While the inflation-adjusted prices of real estate show very little increase in the cost of housing (1890 $125,000, and 2009 $185,000), the nominal or actual dollar cost of housing has skyrocketed (1890 $2500, and 2009 $185,000). This is important because the cost of the debt is fixed. This simply means that over time houses get more expensive but your mortgage payment is usually fixed for 15 or 30 years. All of this and the fact that rents rise over time as well (Tennessee rents rose 60% in the most recent 30 year period according to
census.gov).
So if the average American could buy 1 investment home say $100,000 to supplement their retirement with a $1000 per month rental, they could have a free and clear home paid for at the end of 30 years. Using a 60% rise in rent, have a check coming in for $1600 per month, and an asset worth potentially triple or more. The other benefit of this quick analysis is the potential tax deductions they can during the duration. All of this with a one time cash investment which reaps long term dividends.
Now I'm doing this a quick example only but you can see how the numbers start to get big. I don't think every American needs to own 10-20 rental homes but I think owning even 1 can really accellerate ones wealth building journey. Add 2 to the mix and you've probably replaced the social security that you likely can't count on the way the feds are spending.
This can provide a good tangible balance to the 401k and at today's prices, real estate is available at a steep discount. The hardest part is changing the mind set from what's possible to actually
taking the first step.
