Nick Perry argues real estate wealth comes from inflation eroding your fixed mortgage debt, not rising prices. Tenants pay the mortgage while the debt shrinks in real value. The investor gets paid to borrow.
Most people think they make money on real estate because the real estate goes up in value, but what really happens is the debt goes down in value. Inflation-induced debt destruction is one of the secrets of the wealthy. With rental properties, we don't even pay our own debt. We outsource that obligation of debt repayment to someone called a tenant. The tenants pay the debt. So, with that, we're getting paid to borrow and someone is paying our debt for us. It's absolutely incredible. This is what's called self-liquidating.
