BASIC MATH

Posted on by Paris Group Realty

There are many reasons for you to buy property. Two very big ones are passive income and leveraged money. Let me explain:

Have you noticed that how much you earn relates to every hour you spend working? Every minute of your work life measured out in pennies? How can you get a head if you have to spend more of your precious time to make more money? You can’t. That’s why you must invest-so you can enjoy your weekend, and your investments can continue working. Real estate is one of those important investments.

Here’s my example…I’m going to give you $10,000. What are you going to do with it? (OK, in this scenario humor me. You’re going to buy a house.)

In the alternative example, you’re going to go buy $10,000 worth of stock. Something moderately safe. When you go buy that stock (for the sake of simplicity) you get $10,000 worth of stock. That’s it. When the stock goes up, you make 3% on your $10,000 ($300). Not bad-better than investing in your friends’ bar tab.

If you go buy a house (with a mortgage), you get $200,000 worth of stock for $10,000. Did you get that? You get $190,000 more “stock” when you buy real estate. So when housing prices go up (let’s say 3%, to make it comparable to the stocks) you make 3% on $200,000. That’s $6000 in gain!

All that, before you even got dressed for work.

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