Best rental investment property in or around Edison

[CaptainNJ]

Originally Posted by HudsonCoNJ

Valid point. However, you can't buy $400,000 worth of VTI with just $80,000 like you can with real estate.

you are actually only getting $80,000 worth of real estate not 400k. for the rest of the value of the real estate you are paying over 30 years and its costing you the interest.

[HudsonCoNJ]

Originally Posted by CaptainNJ

you are actually only getting $80,000 worth of real estate not 400k. for the rest of the value of the real estate you are paying over 30 years and its costing you the interest.

If your rental income covers the mortgage plus maintenance expenses, technically you're not paying. Also, if that property appreciates by 20% in 5 years and you sell, you just doubled your initial investment of $80,000 (minus acquisition and closing costs of course). For that to happen with your VTI example, you would need an annual rate of return of over 14% for 5 years. Not very likely.

Of course I'm over simplifying it because being a landlord is a job and buying stocks is pretty much just a few clicks of the mouse. But it's understandable why a savvy investor might look at real estate. It's risky, but the upside can be huge.

[bluewin888]

unless the investment will appreciate HUGELY, I must let the rental income cover mortgage and tax and all costs. Otherwise, donot bother.

Originally Posted by HudsonCoNJ

If your rental income covers the mortgage plus maintenance expenses, technically you're not paying. Also, if that property appreciates by 20% in 5 years and you sell, you just doubled your initial investment of $80,000 (minus acquisition and closing costs of course). For that to happen with your VTI example, you would need an annual rate of return of over 14% for 5 years. Not very likely.

Of course I'm over simplifying it because being a landlord is a job and buying stocks is pretty much just a few clicks of the mouse. But it's understandable why a savvy investor might look at real estate. It's risky, but the upside can be huge.