Originally posted by @Jim Schock:
@Chris Ruud So I need to admit
@Jim D. If you invest 500k in a property, and in 30 years it's still worth 500k that 500k has less value due to inflation. As I stated the reality is it won't stay flat for 30 years which is why it's best to know what the growth rate in your area is.
I don't think you understand the basic premise here. He's proposing putting a small down payment on a $500k property with a 30 year mortgage, and having the rental income cover the mortgage payments so that it's cash flow neutral after all expenses. If he puts 5% down ($25,000), and the property value or rents never increase, after 30 years the loan is paid off and he owns the building free and clear. So investing $25,000 and getting $500,000 in year 30. That's a return of 10.5%.
If the property appreciates even 2% per year (increase of $10,000 on his investment of $25,000), he makes another 40% return because he's leveraged.