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TRUMP UNIVERSITY WEALTH BUILDING 101

around 4.75 percent, not far from their 40-year highs, and the median price
of a single-family house now sits above $225,000—more than twice the
amount recorded 10 years ago.
There’s no doubt: Today’s investors (in all asset classes) face times more chal-
lenging than any period since at least the 1930s. In most instances, earlier investors
have already picked the low-hanging fruit. Yet the stomach is growling louder.

Challenge Doesn’t Mean Impossible

Since the late 1990s, sharp increases in property prices, along with a corre-

sponding relative decline in cash flows and rental yields, have led the major
media to persistently babble about real estate “bubbles.” Taking a cue from
these misguided journalistic missives, many people now believe that real
estate is no longer a good investment. But, if you expect a secular fall in prop-
erty prices, don’t hold your breath. Ever since the 1940s, such failed forecasts
have periodically littered the economic landscape. Do not err by focusing on
the low prices you missed in the past. Realize that 10 years from today—just
as in every previous decade—today’s property prices will seem low.
So, without a doubt, your efforts to build wealth should include residen-
tial rental properties. Although every type of asset class offers some promise,
when viewed in total, the benefits of rental properties are tough to beat.

When you invest in property, you can gain in 10 ways:

1. A competitive flow of income.
2. Leveraged returns.
3. Wealth from amortization.
4. Wealth from infl ation.
5. Wealth from appreciation.
6. Strategic management.
7. Instant equity.
8. Optimal liquidity.
9. Income tax advantages.
10. Portfolio diversifi cation.

No other investment can match such an extensive list of benefi ts.

A Competitive Flow of Income

When I first began buying rental houses and apartment buildings, I could

easily find properties that offered net unleveraged rental yields of 10 percent

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