First of all, lets define what an asset and a liability is. One simple way to put it is an asset is something that puts money in your pocket. A liability is something that takes money out of your pocket.
You’ll see a lot of blogs such as https://www.greaterfool.ca/ or https://www.millennial-revolution.com/ compare stocks and real estate. The TYPE of real estate they are comparing is your own home, which is NOT an investment. What they fail to compare is an investment rental property vs stocks.
Your home that you live in has many expenses (mortgage, property tax, insurance, utilities, maintenance, repairs, condo/strata fees). It doesn’t pay you any income so you are losing money on it every month. But you still need a place to live and whether you choose to rent or own is another topic in itself. Home owners will tell you, “oh, but my home has gone up in value!” That is speculation, the value of your home can go up or down. Plus, most people don’t and don’t know that they can access the equity in their home so it is dead equity.
A rental property is an asset IF it pays you monthly. The types of properties our investors invest in are CASHFLOWING duplexes in Barrie, ON, a city 1 hour north of Toronto that is well-connected via Highway 400 and GO trains. These properties are tenanted top and bottom and pay down all your expenses every month. There is cashflow left over every month, even after factoring in capital expenses, vacancies, and regular repairs and maintenance. How great is that, you have an asset that pays for itself. AND it’s not you that pays for it. Its’ your tenants that pay for it! What happens in 20-25 years when your rental property is paid off? You’ll have a sweet $4000-5000 (assuming rents go up in the future due to inflation and the housing crisis we have in the GTA) paying you every month! Now, imagine you have 2 of these houses, or 5, or 10, or 20. You can quickly see how you can snowball your wealth and speed up your retirement through the power of leverage and real estate!