*WATCH THE BEHIND THE SCENES AT THE END
- Stocks vs Real Estate
- The Power of Leverage
- Real Estate / Housing Market
- Investment on Rental Property
- Zero Cash Flow
- Mortgage / Equity Paydown
- 30% Return on Investment with Real Estate
- Stock Market at 10% Return on Investment

- Today we're gonna talk about leverage. If you had $200,000, is it better to put that in the stock market at a 10% return, or does it make sense to take that $200,000 and buy some real estate? We're gonna compare. Let's find out. So let's say you had $200,000 cash. Maybe it's you inherited this money, maybe you saved it, or maybe it's a line of credit that you're using to borrow at 2% or 3%, okay? So let's pretend you take that $200,000 and you go put it into the stock market. You buy some crazy good stocks, and you are returning 10% on your $200,000. If you're returning 10% on your $200,000, you are getting $20,000 every year, okay? So that's a pretty good return on your investment, a 10% ROI. Let's say you now take that $200,000 and you leverage it out and buy a real estate asset worth $1 million. Now, you're gonna rent it out to some tenants, and assuming your rent pays all the expenses, your property taxes, your insurance, your mortgage payment. So the rent covers all your expenses, and there is a zero cashflow, okay? So your rent covers all your expenses. Now, your annual mortgage pay down, so your tenants are paying down your mortgage, is approximately $20,000. So every year your mortgage is gonna come down. So in year one your mortgage is at $800,000, at the end of year one your mortgage would be about $780,000. You get $20,000 equity paid out. Assuming the market appreciates. Well last year in the GTA there was about 26%. Let's pretend that's too high, let's half it to 12%. Let's say that's too high, that's not even half, but let's say 12%. Let's have the 12% to 6%. Let's still say that's high and let's go with a 4% appreciation. Assuming your million dollar asset now appreciates at 4%, you're returning another $40,000. So you've got the $20,000, you've got the $40,000, that's $60,000. So $60,000 divided by your investment of $200,000 is a 30% return on your investment. So stock market 10%, housing market 30%. Yeah, just baloney. You remember? You remember this? My baloney has a first name.