Finally Someone Is Talking Some Sense!

[Collin Hays]

I was contacted by a potential investor in the Smoky Mountains asking my opinion on the earnings potential of a cabin.  One of the keys in any investment is "What are your goals?"  I was delighted to hear that this investor said "Break even."  Whoa!  That doesn't sound very appealing, now does it?   Well let's think about that...

Let's say you buy a $500,000 property, put 20% down, and only "break even" in the early years.  You've spent $100K on the deal.  But in a decade, that property is now worth $1 million for your $100K investment, even if you never made a dime on monthly cashflow!  Your money has doubled more than THREE TIMES in 10 years, or about a 24 percent annual return.  And even if you never make a dime and the cabin doesn't go up a dime in value, you still will have a $500,000 asset in 10 years for your $100K investment.  That's still a 14% annual return!  

THAT is the beauty of real estate my friends!