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Old 12-22-2016, 09:38 AM
 
708 posts, read 502,317 times
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Quote:
Originally Posted by Perryinva View Post
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!
It was my best year ever. Up 24% this year
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Old 12-22-2016, 09:45 AM
 
625 posts, read 381,798 times
Reputation: 698
Quote:
Originally Posted by TwoByFour View Post
Historically over the long run RE returns are about the same as the stock market so I am not sure one is better than the other. With RE however you can build up sweat-equity, adding value through your own labor. I think it comes down to preferences and situation. I had a job with a 401k and matching contribution from my employer so of course I am going to take that. It worked well for me - I retired at 62, to Maui.

My recommendation is to do both if you can. Diversification is pretty important.
Over time Stock returns way way way outpace real estate returns.

For instance a house on my block sold for $13,500 in 1954 today it is worth $413,500. Sounds good.

But if you bought $13,500 of the DJIA and reinvested all dividends you would have several million dollars today.

And it is timing. A condo near was built in 1981 and sold units for 50K that are worth 350K today. Sounds good, but 30 year treasuries paid 16% back then. So condo would have to rise greater than 16% a year for first 30 years just to break even.

And no dollar cost averaging in real estate. So all in. So buy a condo right after 9/11 on Wall Street mega rich. But at the peak of Spring 2007 on a 7% mortgage not so much.

Buy a waterfront home month before Sandy, or buy a month after Sandy big difference.

Real estate 100% of profits are made on day you buy your home .Have to get the right price.

Stocks is dollar cost averaging. Open a Fidelity stock Mutual fund on March 10, 2000 at all time internet bubble high and start investing $500 a month but 2016 you dollar cost averaged into a fortune.
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Old 12-22-2016, 09:49 AM
 
625 posts, read 381,798 times
Reputation: 698
Quote:
Originally Posted by Willistonite View Post
It was my best year ever. Up 24% this year
Same here, CHK and RIG my big winners.
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Old 12-22-2016, 10:38 AM
 
Location: Paranoid State
13,047 posts, read 10,437,354 times
Reputation: 15678
Quote:
Originally Posted by NewbieHere View Post
You can hire business to run the business of being a landlord.
Certainly, you can hire a property manager, but you are still operating a business, with all that implies. You can hire someone to operate your laundromat or pet store or plumbing supply store. One slip-and-fall lawsuit can force you into bankruptcy. A state or local government can seize your rental under imminent domain. Your tenants still can set up a meth lab. You still can have squatters. You still can have tenants damage your property. Etc etc.

When you own equities in the stock market, you are largely shielded from this.

For many people, hiring a property manager is a viable way to be a landlord. In some states, there is a legal requirement to hire a local property manager if your rental property is over 100 miles away from your residence.
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Old 12-22-2016, 10:45 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,558 posts, read 39,944,045 times
Reputation: 23693
Quote:
Originally Posted by FloridaBeachBum View Post
Over time Stock returns way way way outpace real estate returns.

For instance a house on my block sold for $13,500 in 1954 today it is worth $413,500. Sounds good.

But if you bought $13,500 of the DJIA and reinvested all dividends you would have several million dollars today.

And it is timing. A condo near was built in 1981 and sold units for 50K that are worth 350K today. Sounds good, but 30 year treasuries paid 16% back then. So condo would have to rise greater than 16% a year for first 30 years just to break even.

And no dollar cost averaging in real estate. So all in. So buy a condo right after 9/11 on Wall Street mega rich. But at the peak of Spring 2007 on a 7% mortgage not so much.

Buy a waterfront home month before Sandy, or buy a month after Sandy big difference.

Real estate 100% of profits are made on day you buy your home .Have to get the right price.

Stocks is dollar cost averaging. Open a Fidelity stock Mutual fund on March 10, 2000 at all time internet bubble high and start investing $500 a month but 2016 you dollar cost averaged into a fortune.
^^^ this sounds like a discussion on personal residence / non-income producing RE...

Do the math with a solid 10% income stream, + 30 yrs tax advantages during your income yrs, add whatever you want to appreciation, as it varies. most of my left coast stuff averages 12 - 14% appreciation per yr, in addition to the income and tax benefits.

Again... RE is NOT the answer, it is just another of many options available for income & wealth building.

One needs to be building wealth, so just do whatever best fits your particular skillset, interest, and proven success! Hopefully you will diversify and have a few options, because NONE are the ONE answer. Except inheritance. Be nice to your rich uncle.
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Old 12-22-2016, 10:46 AM
 
Location: Paranoid State
13,047 posts, read 10,437,354 times
Reputation: 15678
I think there is one possible long term upside to owning rental real estate, and that is demographics. Because of the Great Recession, many people under the age of 30 have put off marriage, having children, household formation and the like. I just read a report saying the number of adult children living at home with their parents is at an all time high (or maybe it was a 60 year high).

At some point, it is reasonable to expect that these now 30-somethings will form households - get married, have children, etc. If that happens, we can see an uptick in the demand for housing as they move out of their parents' basements. That argues that at some point your rental property might substantially increase in value.
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Old 12-22-2016, 10:54 AM
 
Location: NE Mississippi
13,652 posts, read 8,573,131 times
Reputation: 19863
Quote:
Originally Posted by StealthRabbit View Post
^^^ this sounds like a discussion on personal residence / non-income producing RE...

Do the math with a solid 10% income stream, + 30 yrs tax advantages during your income yrs, add whatever you want to appreciation, as it varies. most of my left coast stuff averages 12 - 14% appreciation per yr, in addition to the income and tax benefits.

Again... RE is NOT the answer, it is just another of many options available for income & wealth building.

One needs to be building wealth, so just do whatever best fits your particular skillset, interest, and proven success! Hopefully you will diversify and have a few options, because NONE are the ONE answer. Except inheritance. Be nice to your rich uncle.
Right. And all the stock market only people ignore the fact that they must use their own money. Real estate people don't do that. We do borrow money but someone else pays it back, not us.

Inheritance, I am sure you know, is usually gone in a very short period of time. Handling money takes practice!
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Old 12-22-2016, 10:59 AM
 
Location: SoCal
13,225 posts, read 6,326,744 times
Reputation: 9833
Quote:
Originally Posted by SportyandMisty View Post
Certainly, you can hire a property manager, but you are still operating a business, with all that implies. You can hire someone to operate your laundromat or pet store or plumbing supply store. One slip-and-fall lawsuit can force you into bankruptcy. A state or local government can seize your rental under imminent domain. Your tenants still can set up a meth lab. You still can have squatters. You still can have tenants damage your property. Etc etc.

When you own equities in the stock market, you are largely shielded from this.

For many people, hiring a property manager is a viable way to be a landlord. In some states, there is a legal requirement to hire a local property manager if your rental property is over 100 miles away from your residence.
You forgot that if you own equities and somebody tweets something and your stock goes down. There's risk in everything.
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Old 12-22-2016, 11:30 AM
 
Location: RVA
2,165 posts, read 1,265,978 times
Reputation: 4456
Quote:
Originally Posted by Listener2307 View Post
Right. And all the stock market only people ignore the fact that they must use their own money. Real estate people don't do that. We do borrow money but someone else pays it back, not us.

Inheritance, I am sure you know, is usually gone in a very short period of time. Handling money takes practice!
I'm not stock market only, and no one but me coughed up the $40k down payment on the rental. The only return on that $40k will be appreciation and equity paid for by the renter. Because of my current earned income, I see no tax break or depreciation benefits from rental ownership. That same $40k would be earning me 12% (my personal
yearly average since 1997) in equities, and I don't need to reshingle my stocks. I did it to diversify and to help out stepson and prevent pissing it away in rent.

24% for 2016ytd is excellent. I did my average this year, and only 5% last year. But I was over 35% for 2012 & 2013. But I haven't lost sight of the fact that we have been in a bull since 2009.
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Old 12-22-2016, 11:32 AM
 
625 posts, read 381,798 times
Reputation: 698
Quote:
Originally Posted by StealthRabbit View Post
^^^ this sounds like a discussion on personal residence / non-income producing RE...

Do the math with a solid 10% income stream, + 30 yrs tax advantages during your income yrs, add whatever you want to appreciation, as it varies. most of my left coast stuff averages 12 - 14% appreciation per yr, in addition to the income and tax benefits.

Again... RE is NOT the answer, it is just another of many options available for income & wealth building.

One needs to be building wealth, so just do whatever best fits your particular skillset, interest, and proven success! Hopefully you will diversify and have a few options, because NONE are the ONE answer. Except inheritance. Be nice to your rich uncle.
I own a rental property. There is no income tax benefits unless you own multiple properties and can declare it a full time occupation and have LLCs. My income does not allow me to take any losses on property and I have to add back deprecation when i sell.

I have been clearing around $10,000 a month off my stock and bond portfolio the last few years. My rental after expenses maybe $900 a month.
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