Originally Posted by
SonicFlyer
Not always. And especially not always more than standard equities market rates of return.
In other words, depending on your home for retirement funds is high risk.
Buying the least expensive home you can tolerate will free up a lot of exess wealth that, if invested properly in a diversified global equities portfolio, will absolutely out perform the home purchase in most cases most of the time.
However, it is indeed possible to get lucky by having one's home value increase at a faster rate over time than 'the stock market.' But that's rolling the dice. And same for investment properties... the real benefit is that you get someone else to invest the money for you, OPM.... but again... much higher risk.
True until you factor in that you must pay to live somewhere and you are leveraging your investment with the ability to put a relatively small down payment to control a large asset at some of the cheapest interest rates you can obtain. As I pointed out a one million dollar home with 20% down yields a 20% profit in year one if the home appreciates only 4%. Your payments also increase equity each month. The one thing that caught my attention early in my career was the senior guys who seemed really well off had money in real estate. It certainly should only be a portion of your financial planning but should not be overlooked.