MV, thanks for reading and your comment. Glad to see you are running the numbers!

It's hard to know what math you are doing, but my calculation using your numbers is a -69% return on investment after 20 years (and some costs were left out such as maintenance, utilities, etc).

Remember to include the negative yearly cash flow in your calculation. So with your numbers, that is -$92,000 per year. Even though you built over $2 million in equity, you also have over $2 million in cumulative expenses (assuming a 3% annual increase in expenses). Selling costs would be around $200,000, so your total net profit is negative $240,000 after 20 years. Again, this does not include maintenance or utilities, but does include buying and selling costs).

Equity = $2,325,308

selling costs = -$202,284

Proceeds after sale = $2,123,024

Cumulative cash flow = -$2,014,600

Down payment + buying costs = -$352,000

Net profit = -$243,576

ROI = -69%

Just including $200 / month for maintenance, yardwork, etc and $300/month on utilities, the ROI drops to -115% after 20 years.

Now, that can all be saved with 7% appreciation, but that is more of a hope than a sure thing.

Everyone needs a place to live, but that place is rarely a good investment, so financially, most people would be better off reducing their cost of living as much as practical and investing the leftover into something with a better rate of return.