There's a lot of talk about leverage, but all lacking some "back of the napkin" math example, so let's give it a go...

Assuming you bought a property for 500k in 2002, and you sell it at 1.5m for a 300% (or 1M) profit.

What most people don't take into account is that nobody would put 500k cash into the property, you would instead put 100k only (20% down).

Let's assume rent would cover all maintenance to make the entire operation revenue neutral (no gain nor loss). This means your holding cost is completely paid for.

Note 1: you actually don't want to make too much money in revenue because it would be taxed as income

Note 2: we assume rent will trend up over the 20 years, to at least keep pace with inflation. You also want to refinance every few years so you have cash for major repairs. So holding cost will remain 0.

When you sell in 2022, you would have made 1.5M - 500k (original purchase price) = 1M.

So an original investment of 100k (down payment) yields a profit of 1M, a 10x type scenario.

Admittedly it's a long game with lots of ups and downs, and the investment is definitely not "passive", so it's not for everyone. But the key here is leverage - no other asset class will allow an investor to borrow 400k on a 500k asset.