At the beginning, probably the first 10 to 15 years, you may not realize much income. Because all your rental income checks will be used to pay all the mortgage, tax and insurance and other fees. As time goes on, once it get into the second phase, the original mortgage balance will be reduced and equity is accumulated, most critically is that inflation has worked its way to boost rental rate. In this second phase, from year 11th to year 20th, if you survive the first 10 years of hard work, your house will become a pure income generating machine. It’ll become exactly a money tree from which you can shake down cash income.

That’s why many many older RE investors were able to retire on their houses. However, this concept is often ignored by new investors because the “income” potential is not immediately available, you must earn it slowly.

Many new investors always compare RE investment to stock investment on a pure absolute percentage gain. This kind of meaningless comparison will only lead you to forget real estate investment true power factors: Income and leverage, not absolute short term return in percentage terms.