In the previous chapter, Step 1 for real estate investment is to Buy a House. However, investor should be aware of that not all houses are created equal, i.e. not all houses can create the same return on your investment.
Generally speaking, the larger the better.
As long as you can afford, buy a house at the upper limit of your budget. If you can only afford a smaller house today, buy it today and let the equity gradually build up in the house. Then sell it in a few years and buy a larger house. Simply speaking, Upsizing you real estate investment.
You may hear a lot about downsizing in real estate jargon, mostly talking about people selling their large house to buy smaller one due to lifestyle change. However, if you are into the game of real estate investment, forget about the downsizing, go for upsizing.
The biggest share of real estate investment return comes from long-term capital appreciation. And the larger the house, the larger the capital appreciation. In terms of its price appreciation over the long-term, the specific type of house you should buy is ranked below from the lowest return to the highest return:
Detached House (single garage):
Detached House (double garage):
In summary, upsizing your real estate portfolio based to the ‘Type of House Vs. Return’ chart above. Sell the smaller house, and buy the larger one. Repeat the process. At the end of the day, you will own a big nest egg.