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Real estate or stock market?
Posted on 2/19/15 at 6:06 pm
Posted on 2/19/15 at 6:06 pm
Hey guys, so I have a lot of family that own rental properties and have always wanted me to get into owning rent houses. I get that there are deals out there, money to be made, etc. I also understand that there can be quite a bit of work involved. But they'll say things like, "it's like a savings account that someone else is paying for", which obviously is very enticing. FWIW, they have all their money into rental property, not much in the stock market. My question is, can investing your money in the stock market alone be just as lucrative and wealth building as rental property? Or is one clearly a better option? Thanks in advance!
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Posted on 2/19/15 at 6:18 pm to Early Riser
you can do better in the stock market... the issue though is all you own is a piece of paper. Right now i would argue its over valued paper too as a whole. So, a major advantage with real estate is no matter what the market does, you own the property. I dont think rental property is really even the best real estate option (ton of headache) i like the development side of things much better.
Posted on 2/19/15 at 6:54 pm to Early Riser
Is there some law that keeps you from doing both?
Posted on 2/19/15 at 7:04 pm to Teddy Ruxpin
Real estate is tangible. Which is better IMO.
Posted on 2/19/15 at 7:16 pm to Paul Allen
No law that keeps me from doing both. But I would just like to focus on one or the other. To be fair, I'm not going to be buying rental property, im going to be investing in the market. I'm just looking for people to give me feel good stories about how they've done better in the market than in real estate! 
Posted on 2/19/15 at 8:06 pm to Early Riser
REAL ESTATE
of course plenty of us do both
But i prefer RE
you think you can get better cash flow with rentals? or dividend paying stocks?
using the same amount invested?
of course plenty of us do both
But i prefer RE
you think you can get better cash flow with rentals? or dividend paying stocks?
using the same amount invested?
Posted on 2/19/15 at 8:07 pm to Lsujacket66
quote:
you can do better in the stock market..
Posted on 2/19/15 at 8:11 pm to Fat Bastard
I guess the other part of the question to think about is the amount of headache that comes with rental property vs simple investing......
Posted on 2/19/15 at 8:22 pm to Early Riser
Doesn't take much effort to dump money in an index fund and rebalance twice a year. That's my plan as of now.
Posted on 2/19/15 at 8:24 pm to Early Riser
quote:
I guess the other part of the question to think about is the amount of headache that comes with rental property vs simple investing......
It's nowhere near as bad as some make it out to be if you know what you are doing.
Plus plenty use management companies who handle most everything and still make killer cash flow.
Posted on 2/19/15 at 8:25 pm to jimbeam
quote:
Doesn't take much effort to dump money in an index fund and rebalance twice a year. That's my plan as of now.
how much cash flow you getting from that?
Can it support you if you lose your job?
Posted on 2/19/15 at 8:35 pm to Early Riser
You have to decide what will better suit your personality, interests and lifestyle, one is not better than the other, and as others have said nothing prevents you from doing both.
I am basically retired and live off of investments, I stuck to the stock market and some oil and gas investments as opposed to real estate. I will throw out what I saw as the down side. I like simplicity, having to keep up with taxes, insurance, repairs, and rent for multiple properties did not fit that description, and am not a "people" person, so did not want to be a landlord. While there are management companies for those type things, it would have probably been a long time until my investment holdings were large enough to afford it. I also wanted the freedom to easily move to new locations, I had owned a piece of property with a camp on it that was several hours away, and just taking care of that was enough to convince me that managing rental property long distance is not something I would want to do on a larger scale. I also like the liquidity of stock, much easier to sale a portion as opposed to trying to convert real estate to cash if needed. I am sure someone else will take the opposing side and lay out why you should go with real estate.
I am basically retired and live off of investments, I stuck to the stock market and some oil and gas investments as opposed to real estate. I will throw out what I saw as the down side. I like simplicity, having to keep up with taxes, insurance, repairs, and rent for multiple properties did not fit that description, and am not a "people" person, so did not want to be a landlord. While there are management companies for those type things, it would have probably been a long time until my investment holdings were large enough to afford it. I also wanted the freedom to easily move to new locations, I had owned a piece of property with a camp on it that was several hours away, and just taking care of that was enough to convince me that managing rental property long distance is not something I would want to do on a larger scale. I also like the liquidity of stock, much easier to sale a portion as opposed to trying to convert real estate to cash if needed. I am sure someone else will take the opposing side and lay out why you should go with real estate.
This post was edited on 2/19/15 at 8:38 pm
Posted on 2/19/15 at 8:36 pm to Fat Bastard
I'm new to the game so no I could not live off of earnings.
Posted on 2/19/15 at 8:40 pm to Fat Bastard
If I looked at cash on cash, real estate has always been quicker money, and always more steady. Some tax advantages, although you pay back depreciation as ordinary income upon the sale. What all the guys on infomercials never mention. Not just cap. gains, but also ordinary income.
If, there is the key word,Florida properties at teh height of the market it would have been the quickest and single largest gain I'd ever made. As it is, I had deep enough pockets (just barely) and today everything is fine down there. No where near what it was, but good enough.
I'd live someone to give me the name of a proactive real estate management firm. I've found them all to be very reactive, and the local stuff I just handle myself. It's not that hard.
As far as best investments it would be in this order for me by greatest return 1) equity in my business 2) up til present real estate Tied for 3rd) silver because I started buying at $6, equities, options, swaps and commodities. I'd have to think about #3 for a bit to sort them out.
If, there is the key word,Florida properties at teh height of the market it would have been the quickest and single largest gain I'd ever made. As it is, I had deep enough pockets (just barely) and today everything is fine down there. No where near what it was, but good enough.
I'd live someone to give me the name of a proactive real estate management firm. I've found them all to be very reactive, and the local stuff I just handle myself. It's not that hard.
As far as best investments it would be in this order for me by greatest return 1) equity in my business 2) up til present real estate Tied for 3rd) silver because I started buying at $6, equities, options, swaps and commodities. I'd have to think about #3 for a bit to sort them out.
Posted on 2/19/15 at 8:43 pm to Iowa Golfer
My stock has never called to replace the ac!!!!
Posted on 2/19/15 at 10:23 pm to Early Riser
Posted on 2/20/15 at 7:21 am to Iowa Golfer
quote:
Some tax advantages,
some? There are TONS of tax advantages in RE. Do we have that with dividend paying stocks?
You also get equity capture if you buy right, possible market appreciation, cashflow, principle paydown, and yes, tax advantages. My tax advantages last year were HUGE.
cash flowing businesses and RE are the top.
I see you have exactly that as #1 and #2 in your list. well done.
I would suggest that most Americans can only live a few hours… maybe a few minutes on their passive income.
Posted on 2/20/15 at 7:37 am to Early Riser
How liquid do you want your cash to be? Obviously one allows your quicker access to your money and the other doesn't
Posted on 2/20/15 at 7:41 am to tke857
Honestly, how liquid do you need to be? I can get a line of credit on my properties in less than 48 hours.
I always hear this argument but I don't fully grasp why you would need to be so liquid...
I always hear this argument but I don't fully grasp why you would need to be so liquid...
Posted on 2/20/15 at 7:47 am to I Love Bama
Everyone's situation is different. Yeah you can get a LOC but some people don't like to leverage their assets like that. Not saying it's wrong to do just saying it depends on the persons situation and long term / short term goals
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