Is Real Estate a Good Investment? (Nope, However…)

by Brandon

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Is Real Estate a Good Investment?

Is real estate really a good investment?

I mean, sure it’s tangible. Yes, it’s cool. Yes, it has worked for some, and it’s done wonders for me.

In fact, this entire website is dedicated to real estate investing and perfecting the art/science/luck of it. Hundreds of books have been written on the topic (including these, my top 21 favorite real estate books.) Each week on the BiggerPockets Podcast tens of thousands of listeners tune in to hear the best tips, tricks, and strategies for building wealth through real estate.

However, it’s rarely discussed – is real estate, itself, a good investment? And if so… why?

Is Real Estate a Good Investment? Nope!

Historically, real estate actually has NOT been a great investment in itself. I know, a lot of you just choked on your lunch hearing that come from me, but bear with me a moment.

As famed economist and Nobel prize winner Robert Shiller has pointed out using the S&P/Case-Shiller Index, home values have actually appreciated, on average, at nearly the same rate as inflation over the past 100 years.

In other words – if you paid $100,000 cash for a home in 1970 and sold it in 2000 for $250,000 it may seem like you made a terrific investment. However, that change is only maintaining a 3% annual appreciation, pretty similar to inflation. They home hasn’t actually built them any wealth.

In addition, the home needed new windows, carpet, paint, and other changes throughout those 30 years, so it’s very possible that the owner of that home actually LOST money on their home purchase.

So, yes – buying a home with your $100,000 is probably better than tossing it into a bank account earning no interest but in itself, it’s really not a great investment. You’d probably be better off sticking that $100,000 in the stock market and earning an average of 8%.


(click to continue reading on BiggerPockets)

About Brandon

has written 199 Awesome posts in this blog.

Brandon Turner (G+) is the Senior Editor and Community Director and owner of He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

P.S. looking for hard money loans in California? Be sure to check out my friends over at They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

P.S. Looking for more real estate investing knowledge? If you are interested in a top-notch course to help you understand the nuts and bolts of creative real estate investing, I would like to recommend Ben Leybovich's Cash Flow Freedom University. Ben is a close friend and has been my trusted adviser for years. He's a smart guy and CFFU is pretty awesome. The course is waitlisted, but while you wait for an opening Ben will send you tons of FREE content. Seriously. Click here to check it out.

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