Possible Investment Opportunity:

Generally, real estate appreciates about 5% a year nationally, more or less in different regions. However, California has always been the hottest housing market. Home price increases are in the double digits in some area.

Let's find out the return on investment even for the modest 5% appreciation in home value.

Let's assume you purchase a $250,000 house with a 20% down payment ( an investment of $50,000) and finance the rest with a mortgage. At an appreciation of 5% annually, the first year's home value would increase $12,500 ($250,000 × 5%), which means you earn $12,500 on the investment of $50,000. So, your annual return on the investment would be 25%( $12,500 ÷ $50,000)! With the power of compounded interest, the rate of return will be even greater in the coming years.

Yes, you need to make payments on the mortgage and other costs such as property taxes and insurances, etc. However interest on the mortgage and property taxes are both tax deductible, which leads to the next benefit of home ownership.