Your wife's 401k has no matching and "highish fees". Can you list the 3 lowest fee funds that she could choose from? There's a big difference between a 0.41% bond index and a 1.86% actively managed fund. Also, how long would your wife plan to work there? If this is a forever job, you'd treat it differently than one where if something better came along, she'd fly.
Real estate investing brings about the same return as 3 fund investing. The difference in the 2 are with funds, you put the money in, twiddle your thumbs and sleep all night. With real estate, you buy, you find tenants, you get 3am calls, you have people stop paying rent, you buy stock in Tums because you're taking them 12 times a day. I am biased against rental buying because my dad did it and it was the biggest hassle I could imagine.