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Old 12-21-2016, 06:15 PM
 
Location: SF Bay & Diamond Head
1,779 posts, read 1,420,023 times
Reputation: 1971

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Real estate hands down. But you have to understand real estate investing and not buy crap because it is cheap. With my values doubling about every ten years and rents increasing at about 6% compounded annually I don't have to think about spending "down". I use the increased rents to harvest increases in Equity through appreciation to constantly replenish my cash.

In a highly desirable and high COL area real estate is pretty passive even without a property manager. Seems people that are invested in the stock market are constantly reallocating and moving bucket around. Sounds like a lot of work. When their value decreases they lose ability to increase value. When my real estate loses some value the ONLY way that impacts me would be if I was forced to sell in a down market. That is easy to plan around.

Cash flow and appreciation is the way to go.
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Old 12-21-2016, 07:03 PM
 
Location: Tennessee
23,592 posts, read 17,582,380 times
Reputation: 27682
Rents will almost always go up, especially if mortgage finance remains restrictive.
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Old 12-21-2016, 07:32 PM
 
Location: Paranoid State
13,047 posts, read 10,445,912 times
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Real estate vs. stock?

Apples vs. oranges, really.

When you own rental property, you are operating a business, with everything that means. You're a landlord. There are lots of businesses out there, and you're selecting one - rental real estate.

When you invest in the stock market, you are not operating a business. You buy a tiny piece of many businesses (a portfolio), each of which has professional managers, and in aggregate and over time the value of those businesses goes up (at least that's the idea).

Running a business (being a landlord) isn't for everyone. Why that specific business? Why not, say, open a different type of business -- say, a pet store or a laundromat or a plumbing supply store? If running one of those other types of businesses sounds like a lot of work and peril, you are right. My point is you'll find a lot of work and peril being a landlord.

Investing in the stock market doesn't require that kind of work. It is pretty easy. There is peril, of course, but it is different. The peril is lower IMHO.
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Old 12-21-2016, 07:45 PM
 
Location: SoCal
13,236 posts, read 6,340,776 times
Reputation: 9854
You can hire business to run the business of being a landlord.
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Old 12-21-2016, 07:49 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,608 posts, read 39,974,527 times
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NNN commercial RE is pretty nice 'active' investment that is short on activity.

Rental / investment property has the potential advantage of having your tenants pay for your investment, and being inflation protected.

so... Investment RE is one of the many tools in my box.

I am still working on finding the '$x,xxx,xxx annual loss carryovers, but depreciation is annually a BIG help!
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Old 12-21-2016, 10:21 PM
 
Location: Western Asia
3,187 posts, read 1,445,117 times
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Wife retired 2 years ago at 54 and I plan to retire as early as 2 months from now or may work things out with employer to work the entire year. Wife and I have 4 rentals, 3 of which are paid for and they do provide a decent income. We have decided to hire property managers for all of these properties so that eliminates many of the hassles of rentals, we still have to manage the property mgmt. company. We probably will sell these properties at strategic times just to be rid of the hassles of ownership.


I think someone had mentioned diversity and that's what we did. We have substantial monies in our 401K as well as just money in the stock market not under our 401K to use if we need it.


Sorry, getting back to OP, I would recommend both rentals, 401K, and other investments. Our plan was to have a paid for house and 2 new paid for cars before gong into retirement, check.
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Old 12-22-2016, 06:25 AM
 
708 posts, read 502,928 times
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Quote:
Originally Posted by rjm1cc View Post
Real estate is a good way to make money if you are willing to accept the problems that come with tenants. But I am not so that leaves me with the stock market.
I agree with you there. I have rental house with my son in Denver that he talked me in going with him.
Been pure hell so far. Good news is the house has doubled in value in 4 years but he will see that money as I am just taking my investment back. I am keeping my investments in the market but being more conservative as I get closer to retirement.
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Old 12-22-2016, 06:54 AM
 
1,088 posts, read 651,351 times
Reputation: 2329
Quote:
Originally Posted by Tominftl View Post
I don't understand how you think rental property is good for seniors? Every time a tenant moves you have work to do and not to mention the constant upkeep. Maybe with a handyman you could do it but most seniors don't want that kind of work. Not to mention the hassles from tenants who cry when the rent is due. I wouldn't have rental property on a bet. I had a duplex when I was a lot younger with a lot more energy. No thanks now....
You hire a property management company. They take care of everything like that.. If you're smart the rent will cover the cost of it too..

But for example, I had tenants move out a couple of months ago who left a huge mess. Basically everything they didn't want to keep they just left.. It cost $600 to have it cleaned up, and another couple hundred for paint and carpet cleaning. Every penny of that came from the deposit they paid me before they moved in - which is what it's for. The management company hired and scheduled the workers, I didn't have to touch any of it, or pay out of pocket for anything.

The previous renters called me up wanting their deposit back though, which is another story lol.

To the OP, I'm still ~12 years from retirement, and I have 401k, an IRA and rental property. And now that I can look back and see them all together with better clarity, I wish I had done the rental property sooner, or maybe bought more of it.
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Old 12-22-2016, 09:04 AM
 
Location: NE Mississippi
13,680 posts, read 8,585,088 times
Reputation: 19887
Quote:
Originally Posted by Tominftl View Post
I don't understand how you think rental property is good for seniors? Every time a tenant moves you have work to do and not to mention the constant upkeep. Maybe with a handyman you could do it but most seniors don't want that kind of work. Not to mention the hassles from tenants who cry when the rent is due. I wouldn't have rental property on a bet. I had a duplex when I was a lot younger with a lot more energy. No thanks now....
It's a skill set along with a learning curve. We've been in it a long time - long enough to have rental properties and primary home all paid for - and have not had any turn over in 5 years. But we do not raise the rent every year on tenants we want to keep, return deposits after a year of uninterrupted payments, and don't charge fees for late payments. We recognize that we, as landlords, are hard to compete with, so we take only the best renters.

It takes good property, patience, and good business sense.
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Old 12-22-2016, 09:13 AM
 
Location: RVA
2,167 posts, read 1,267,777 times
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Depends on aptitude, attitude, age and both markets (real estate and stock), IMHO. You can get lucky or unlucky with either. Currently, I prefer the stock market, though I have a rental as well that pays for itself. Other than that, it does nothing for me financially, until I sell it. My stocks have increased many 10s of thousands per year!
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