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Stock market vs real estate

Posted on 3/2/13 at 12:04 pm
Posted by siliconvalleytiger
Bay Area, CA
Member since Apr 2004
31158 posts
Posted on 3/2/13 at 12:04 pm
Where are you focusing your investments in the next 5 - 10 yrs? Many dabble in both but where do you see more returns?

By real estate I mean residential.
Posted by C
Houston
Member since Dec 2007
27824 posts
Posted on 3/2/13 at 12:19 pm to
I think if you have the time, real estate is the better investment.
Posted by GenesChin
The Promise Land
Member since Feb 2012
37706 posts
Posted on 3/2/13 at 12:24 pm to
quote:

I think if you have the time, real estate is the better investment.



Econ professor of mine is presenting to the Fed inthe next few months his market research. It seems to suggest that artificially low interest rates are not conducive to growth and investment like many believe.

If you get good low interest rates and interest rates jump to say 6-7%, inflation will follow and your real estate's real value may stay constant but because your interest rates < inflation, you are making 3-4% return before an increase in home values occur
Posted by Zach
Gizmonic Institute
Member since May 2005
112470 posts
Posted on 3/2/13 at 12:29 pm to
I had to make this decision 25 years ago. A wise man told me 'Zach, people are naturally attracted to water. It's where we came from."
So, I bought undeveloped lake front. Best decision I ever made. I would not trust my own judgment on buying real estate unrelated to water.

I've done well with stocks by going blue chips buy and hold with Drips.

My next door neighbor made his fortune buying cheap foreclosed property and renting it. He's a slum lord. I couldn't take the stress.
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
72632 posts
Posted on 3/2/13 at 12:29 pm to
quote:

Where are you focusing your investments in the next 5 - 10 yrs?


REAL ESTATE
Posted by GenesChin
The Promise Land
Member since Feb 2012
37706 posts
Posted on 3/2/13 at 12:36 pm to
quote:


My next door neighbor made his fortune buying cheap foreclosed property and renting it. He's a slum lord. I couldn't take the stress.


During the housing crash, NPR had a news story about Harvard graduates who pooled their money, bought foreclosed property from people who were underwater but had jobs and just renting it out to the original tenants. Peak market 600K$ house they got at 400k$ and their tenants pay pretty much the entire loan per month. Supposedly they made an absolute killing.


Posted by davidengle
Baton Rouge, LA
Member since Feb 2013
20 posts
Posted on 3/2/13 at 12:45 pm to
(no message)
This post was edited on 3/28/13 at 6:30 pm
Posted by ItNeverRains
37069
Member since Oct 2007
25456 posts
Posted on 3/2/13 at 1:28 pm to
Sub 4% $ on investment properties right now. Crazy
Posted by Bestbank Tiger
Premium Member
Member since Jan 2005
71075 posts
Posted on 3/2/13 at 2:02 pm to
Buy low. Sell high.

Real estate is low. Stocks are high.
Posted by LSURussian
Member since Feb 2005
126962 posts
Posted on 3/2/13 at 2:19 pm to
Real estate is too illiquid for me.
Posted by ItNeverRains
37069
Member since Oct 2007
25456 posts
Posted on 3/2/13 at 2:34 pm to
quote:

Real estate is too illiquid for me.


It's just a savings account at a bank with a different address that pays a hell of a return and also gives great tax incentives.

Posted by LSURussian
Member since Feb 2005
126962 posts
Posted on 3/2/13 at 2:43 pm to
quote:

It's just a savings account at a bank

So in 5 minutes you can withdraw all of your money you have in real estate?
Posted by ItNeverRains
37069
Member since Oct 2007
25456 posts
Posted on 3/2/13 at 3:15 pm to
quote:

So in 5 minutes you can withdraw all of your money you have in real estate


Of course not. This is simply how I treat real estate endeavors. Eases the liquidity issue for me
This post was edited on 3/2/13 at 3:19 pm
Posted by BigAppleTiger
New York City
Member since Dec 2008
10384 posts
Posted on 3/2/13 at 3:31 pm to
Real Estate definitely for me. I'm borrowing against all equity right now and doubling inventory of rental/investment property. It is more work than stocks, but also ultimately more controllable in terms of value and return. Getting investment money at these rates for 30 years is too good to pass up right now.
Posted by C
Houston
Member since Dec 2007
27824 posts
Posted on 3/2/13 at 9:09 pm to
quote:

Real estate is too illiquid for me.


Yeah that's the tough part.
Posted by I Love Bama
Alabama
Member since Nov 2007
37715 posts
Posted on 3/3/13 at 1:08 am to
(no message)
This post was edited on 3/3/13 at 1:29 am
Posted by NC_Tigah
Carolinas
Member since Sep 2003
123910 posts
Posted on 3/3/13 at 5:02 am to
quote:

As a real estate agent, I'm biased, but I see real estate a better investment than the stock market because you can have more control of the investment. Stocks, you just sit and wait and hope. In Real Estate, you can improve the property to increase rents.
Don't know that there is a right or wrong answer as long as one remains diversified.

Problem with real estate is liquidity. Expense of sales transaction (for non-realtors), risk of unanticipated depreciation, damage and upkeep are other negatives. Tax deductible levered purchase is a positive.

For folks more comfortable dealing with stocks, REITs are a good alternative.

But hopefully no one here is proposing a general investor be 100% stocks or 100% real estate.
Posted by Lsut81
Member since Jun 2005
80151 posts
Posted on 3/3/13 at 8:06 am to
quote:

Real estate is too illiquid for me.


That is my feeling on it too.... I mean, I'd love to own a few properties and pull in some cash off of it, but if you need to get out, you are talking 1-2 months at a minimum.
Posted by Bestbank Tiger
Premium Member
Member since Jan 2005
71075 posts
Posted on 3/3/13 at 11:25 am to
quote:

hat is my feeling on it too.... I mean, I'd love to own a few properties and pull in some cash off of it, but if you need to get out, you are talking 1-2 months at a minimum.


That depends. If you know another investor, give them a great deal and you can bail quickly.
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 3/3/13 at 11:30 am to
So when all of you at real estate, you're taking buying houses/aptmts and renting them?
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