But what if there is an economic crisis? Well, rents often go up during times of crisis because you end up with more people opting to not buy a home and rent instead – increased rental demands equals increased rents! See below the power of leverage and how much you can increase your net worth by just owning 1 $500,000 property.

Did you know investing in a house is much less risky than the stock market or buying a business? Why do you think the banks will lend you 4 times what you are putting as a down payment compared to next to nothing if you want to invest in stocks or buy a business through the bank? The banks’ lending decisions tell us that buying stocks or a business is 4 or more times riskier than buying a house. If you ask 10 friends that own homes, I bet 9 or 10 out of 10 will tell you buying a home was the best investment they have ever made. Why wouldn’t you do it again then? If you ask those 10 friends if their home has gone up 5% or more in value per year – across the board, they will probably say yes. Flip that around and ask them about their stock investments…their responses will be varied, and most will say some investments were good, some were not, and none increased in value more than their home. Remember because of the power of leverage, with 20% down on a rental property – the home increasing by 5% is actually a 20% return on your down payment since that 5% increase is on the value of the home not the value of your down payment – crazy eh! I can’t even remember the last time one of our properties went up as little as 5%, most years it’s double digits, so even bigger returns!