Imagine making $5000 a year from real estate investing without recognizing you are real estate investing!
Real estate values are so dynamic. The marketplace is always fluid and changing. The only constant is the eventual escalation of value.
Suppose you had owned that little piece of property in your neighborhood years ago where McDonald?s is located today. If you had owned it for 20 or 30 years, what would your profit be from that sale?
Real estate values fluctuate in cycles and according to a myriad of owner situations. However, the price of real estate almost always goes up.
Let me give you a real-life example. (And if you are old enough, you have your own similar story!)
In 1970 I bought a little house in the Green Hills section of Nashville for $27,000. You know it wasn?t much because of the price. But it was home, and the location was respectable.
In 1978 I sold that house for a bigger house in Green Hills. The sales price for that little house I sold was $67,000.
That?s when the light bulb went off in my head! I suddenly realized that I had profited $40,000 from that little house in only eight years. I hadn?t added any more rooms or a patio. And I hadn?t even painted. I was witnessing first-hand how property values increase, often drastically!
I made a $5000 profit per year from that house, just from living in it.
It was an amazing discovery to me. It had been a reality forever, but it was no longer a vicarious experience in my mind. It was alive, because it was happening to me. And it changed my view of the world. That personal experience led me to start a real estate investing career.
I still live in Green Hills, and I pass that house every day on the way to the post office. That house recently sold for $200,000. Same size. Same location. But a phenomenal increase in value.
Asset growth from $27,000 to $200,000 is pretty astounding. And while the asset growth ratio varies from property to property (and city to city), real estate values generally increase. Even owning and maintaining your personal residence is cash generation right under your nose. I can?t believe I was so dumb not to see it before it became so apparent.
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