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I see that lots of folks either rely on rental income or are working to establish a rental income portfolio.
I understand the power of leveraging to get the home in order to be able to start renting, but the whole finding renter, maintenance thing seems like a big headache until the property appreciates enough for a quick sale.
Wouldn't dividend income be a reasonable 2nd choice?
my current favorite investment is a stock that invests in data center real estate. It throws ~3% yield and has been appreciating nicely.
dividend income can be the same as just drawing the same amount out of appreciation as long as you don't have transaction costs . i know i have none with my funds and etf's .
the flip side is the appreciation is taxed more efficiently then that dividend . you are taxed on 100% of the dividend amount , if the same 3% is taken from appreciation you are only taxed on the gains .
dividends also are not controllable . i could have qualified for a health insurance subsidy but the dividend income put me over the limit . generating an equal amount from appreciation would have given me a smaller tax bill .
either way can work fine depending on your situation .
I see that lots of folks either rely on rental income or are working to establish a rental income portfolio.
I understand the power of leveraging to get the home in order to be able to start renting, but the whole finding renter, maintenance thing seems like a big headache until the property appreciates enough for a quick sale.
Wouldn't dividend income be a reasonable 2nd choice?
my current favorite investment is a stock that invests in data center real estate. It throws ~3% yield and has been appreciating nicely.
You are right. Dividend producing securities are great, and if you have them in a tax advantaged fund, I think you may be even better off.
The issue is that the media is telling many poor people that they are "investing" in real estate when they borrow money and get a mortgage. They are no investing...they are just in debt. The only investor is the bank who is getting their interest while they do work and take on lots of risk.
The problem with real estate is that if you only have a few properties and have to manage then your self this can be a lot of work and something you can not do as you get older.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Based on what op wants he is looking to hold a property long enough for it to,appreciate then sell and take his profit, right?
Buying for appreciation is a bit risky because the market can change and you can go upside down, especially with leverage. I wouldn't do it myself.
I invested with cash flow in mind and any appreciation is a bonus. Now if you are forcing the appreciation by buying low and fixing it up to retail value, then you are flipping and the timeline is faster. But waiting for a property to just go up can be risky.
if i could sell the two remaining apartments we own i would be done with real estate . last thing we want in retirement is dealing with tenants , non liquid assets and unexpected bills .
we have liquidated everything we could th last 15 years .
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Depend. Change your frame of references, objectives.
Quote:
Originally Posted by gunslinger256
I see that lots of folks either rely on rental income or are working to establish a rental income portfolio.
I understand the power of leveraging to get the home in order to be able to start renting, but the whole finding renter, maintenance thing seems like a big headache until the property appreciates enough for a quick sale.
depends on what you want to get out of it. Our properties was purchase for longterm a hold, to be passed forward or a possible retirement home or home where DS can have a family. There are other reasons too.
Wouldn't dividend income be a reasonable 2nd choice?Maybe, their are tax reasons to hold rentals that dividend income stock investments do not have.
my current favorite investment is a stock that invests in data center real estate. It throws ~3% yield and has been appreciating nicely.
Real estate investing is not a passive income. Dividend income is much better suited to persons who don't have the time or the interest to deal with real estate details.
Residential tenants can be a lot of work. Commercial tenants are less work until they arent.
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