This is just my personal logic so I invite your comments if you have a counterpoint to this logic.  Here is what I have been thinking about:  imagine buying three properties in the DC area when you are 25 to 35 years old.  Let's say the properties average $250K each and rent for an average of $1500/month and are break even or positive cash flow and you put down about $25K on each one.

So, in very rough numbers, for an investment of $75,000 (not including maintenance costs), if you just hold on to them as rentals and never pay extra on the mortgage, at the end of 30 years, your $75,000 has grown to $750,000, even if the market value doesn't go up.  And someone else was paying that mortgage the whole time - you didn't have to put in any extra money!  Then, assuming rents went up enough to cover the property taxes and insurance, you can have a running income of $4500/month.  Or, you can sell the properties for a price that is 10 times higher than what you bought the property for and keep it as liquid cash.

In reality, there would be maintenance costs and the properties would appreciate over time.  I was just trying to provide a simple overview.

I think what I have discussed above is why the real estate investment gurus speak of long-term investment in real estate.  And this is why the discussions that talk about real estate as a poor investment because it's not clear if it really appreciates when adjusted for inflation, doesn't make sense to me.  You don't buy stocks for 10% of the value, right?  The leveraging power of mortgages is amazing from an investment perspective and so is the idea that you can get someone else to pay the principal.