"Most people can not do basic math to work out their returns.
They will proudly tell you that they doubled their money on the property after ten years and do not realise that the return is only about 7.2% compound and half of it is eroded by inflation."
Well i could say most people dont know how property investment works , for starters most dont buy property outright , they use that magic thing called leverage . for example friend of mine bought 160k property in 2000 put 60k down borrowing 100k . average interest on interest only loan in 10 years around 7% giving 70k interest payed . insurance and rates average 2k approx a year . started out positive geared and is now very positively geared so this investment has cost nothing , read ZERO to maintain over 10 years . this property is now valued at 600k . you do the maths but i can tell you it makes 7.2% compounded look like chump change
