First off i never said that, and no, not at all, that just wasn't the point. Yes, and stocks can crash as well. right? I was just showing him comparables and asking him what his comparisons were that he was talking about.

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recapture years of depreciation and stack it o

I'm still doing fine even after the depreciation recapture tax i'm hit with after a sale. Eschewing depreciation is a huge mistake. Don't try to scare people away because of this. They can do it. there are 1031 exchanges as well which benefit if used. These guys may never sell. They may be strict buy and hold investors for just the cash flow.

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Long term real returns in the US favor equities over RE, with a lot less hassle.

really? well so far my RE returns are blowing my dividend paying stock returns out the water. Maybe what's a hassle for you isn't for me? So you telling me you would prefer a dividend paying stock paying 4% versus what i laid out earlier? with 20k invested into each? really? That makes absolutely zero sense. ZERO! That's one of the theoretical points i was making to the OP. as a matter of fact my cashflow return rate is maybe better than his possible capital gains as well.

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I can live off the income stream from my investment portfolio, RE and passive partnership income add a nice cushion too.

great. I'm so happy for you! I'm happy for any investors who can succeed through a myriad of investment vehicles. My 401k is ok, my roth ira is doing fantastic, my private lending was alright, tax liens were ok, and commodities in the past were ok, and my stocks are ok. But guess what? none offer the passive cashflow like RE! NONE! ZERO! NADA! based on same amount invested. Now a nice cash flowing BUSINESS CAN/WILL BEAT RE. But that wasn't his question. He basically posed the question, RE versus stock market which in turn makes most think he is looking strictly at the passive cashflow of each versus one another. I'll take RE all day and twice on sunday.

This post was edited on 2/20/15 at 8:53 pm

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Posted by tirebiter

7K R&G chile land aka SF

Member since Oct 2006

9347 posts

Posted on 2/22/15 at 6:33 pm to Fat Bastard

quote:
I'm still doing fine even after the depreciation recapture tax i'm hit with after a sale. Eschewing depreciation is a huge mistake.

Uhhh, you eschew something the IRS mandates, like annual rental property depreciation, they will come knocking soon enough. The noncash depreciation expense is helping drive your current cash flow/tax reduction annually, and some people who sell have no desire to buy more property, so an exchange doesn't matter to them. When someone sells for a profit the recapture absolutely drives their taxes and likely marginal rate up.

quote:
really? well so far my RE returns are blowing my dividend paying stock returns out the water. Maybe what's a hassle for you isn't for me? So you telling me you would prefer a dividend paying stock paying 4% versus what i laid out earlier? with 20k invested into each? really? That makes absolutely zero sense. ZERO! That's one of the theoretical points i was making to the OP. as a matter of fact my cashflow return rate is maybe better than his possible capital gains as well.

I don't focus on the supposedly magical dividend paying stocks. I may own some, but total return is a better long term way of looking at it. There is a reason you have likely seen better returns in RE vs equities as RE has taken much longer to recover and bargains have been available. The aggregate RE market where I live is not back to 2008 levels yet. There are still considerable upfront transaction cost to buy/sell RE as well, that seems to have been glossed over, compared to, say, free equity trades that I can make at the push of a keyboard button. I own residential and commercial RE, but I am not myopic about it nor consider it superior to other assets I own. Long term - remember, this is not just the few years you may have been buying property when bargain deals were readily available - real returns net of inflation have significantly favored stocks. People should invest in assets they have researched, are knowledgeable of, and understand the risks whatever they may be, but if I am a person with limited assets I don't think buying something with high transaction costs and could be illiquid would be top on the list.

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