Don’t get too caught up with numbers on paper. This article from Property Investing reminds us of this. It’s called Theory: Taking a Closer Look at Profit.
It shares some interesting insights that may help you on your property investing journey. This one’s particularly thought-provoking:
For a profit to become real (i.e. ‘real’ised) it has to hit your bank account. Otherwise any gain remains ‘unreal’ised and only exits in theory and on paper.
Consider capital appreciation. While the property is owned, what it might be worth is anyone’s guess at best, so the profit is an opinion and only exists ‘on paper’ (hence the arrow pointing down to the ‘Paper’ rectangle).
Take a closer look at the rest of this article for more stuff like this…