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12 Years After – Here’s what the investment looks like

Posted by Dan B on August 10, 2023
Since a post about how real estate investing can be a great wealth building tool, a post that sparked some discussion on investing options, I thought I take an actual investment from ~12 years ago and we will see that ACTUAL results.

Yes, past results don’t indicate future one . . . bla bla bla, but it is aways nice to see real results.
So here it is, keep in mind prices were post 2008 crash and for that reason that are so low compare for what we see today.

House was purchase ~12 years ago for $86,000
It is worth today apporx. $445,000, bit after sales expenses, and mortgage balance ~$365,000 will remain (before taxes).
The buyer of this home lives and WA state and never saw the house is managed by a professional property manager.
Over the years the average cashflow, ie after expenses*, is $3000 per years, or $36,000 for the entire 12 years.
The buyer put 20% down + some additional acquisition costs for a total of $21,500.
If he was to sell it today his $21,500 investment would net him $400k (before taxes) [or approx. $320,000 after taxes]
As a comparison, a $21,500 investment at 5.5% interest compounded annually would yield approximately $41,275 after 12 years.

The house is located outside of PHX AZ at a nice suburb, and over the years it had some vacancies, some repairs, some additional costs for painting or other cosmetics that were deducted from the rent.

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