Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]
