Is it worth investing in real estate?

In Brazil there is a strong culture of investing in real estate, as they are considered very safe assets. You may have heard someone saying that you never lose money on real estate, but this is a myth. If you buy a house and sell it after 10 years, it's true that the sale price will almost always be higher than the purchase price. But that doesn't mean the investment was good. In the last 10 years, accumulated inflation in Brazil was approximately 80%. So if you bought a house for R$ 100k in 2012 and it's worth R$ 180k today, you haven't won anything yet. However, inflation is not the base return that we should use as a reference. In 2012 you could have invested R$ 100 thousand in fixed income with post-fixed interest, which is one of the safest and easiest investments to make. If you had invested R$ 100 thousand at the beginning of 2012, in 10 years you would have R$ 224 thousand. This is still not the right value to compare to the property price to know if you made money. The process of selling real estate involves costs. If you use a real estate agent and pay the typically charged 6%, you would need to sell the house for R$ 238K to receive the net R$ 224K. In addition, maintaining the property usually involves costs. If you had maintenance expenses, they need to be included in the bill. The time you spent also costs something. Anyway, if you can't get a price above R$ 250K, it was probably better not to have bothered with buying and selling the house and simply invested at the prime rate. Ignoring these factors when evaluating the investment causes an illusion of return above what is real and feeds the myth that investments in real estate are always good. As with any investment, making money with real estate requires some knowledge and dedication.