06-01-2018, 09:13 AM
(06-01-2018, 07:34 AM)innsertnamehere Wrote: Real estate and renting it out is almost always about the equity built.
The return isn't based on the month to month cash flow, it's on any equity you build for the amount of money you put in. Let's say you put a standard 20% down payment on that $400k condo, or $80,000. To "beat" standard investing, you want to get a 5% return, when you go to sell. Which means you only need to build $4,000 in equity annually from the rent paying the mortgage payments.
Yup, the stock market will get you about 8%, let's say 5% after inflation. (https://www.theglobeandmail.com/globe-in...e30019116/)
Residential Canadian real estate has historically been at 2.1% after inflation, although there have been bubbles as well as slow periods like the entire 80s. (https://www.td.com/document/PDF/economic...Prices.pdf)
There are definitely years where appreciation was much more than 2.1%, but I wouldn't put my investing money into expecting appreciation in the broader real estate market now. Maybe there were years in K-W when that would have worked, but I don't think that today is a time where one should expect appreciation.