Author Topic: Investment Choices  (Read 2527 times)

tycanis

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Investment Choices
« on: January 28, 2016, 05:16:26 PM »
Is it better to invest in realty for rental properties or to invest in funds?

I have enough to do either and would like to make the best choice.  There are some reasonable places not to far from my home.  I have a could chuck of money to invest following the sale of my former home and moving for work.  I am tired of it sitting in the bank doing nothing but do not know a good direction to go...

GrowingTheGreen

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Re: Investment Choices
« Reply #1 on: January 28, 2016, 05:25:37 PM »
Oh boy. This has the potential for a long answer! I'll try to be short: head over to Bigger Pockets and read about the 50/2 rule. If your local market can supply a house that cash flows without you forcing it to, then go for it.

If the rental market isn't as good as you'd like then go stock market. Something to consider in your calcs is what you want to assume your stock market returns will be and whether or not a rental will beat it. I say go for 8% in the stock market.

Stocks are way easier than rentals... You could be an investor tonight through Vanguard (well... I guess your funds need to clear).


zoltani

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Re: Investment Choices
« Reply #2 on: January 28, 2016, 05:28:28 PM »
This largely depends on you. Rentals can be more hands-on than equities, though that depends on how much management you want to do yourself. For me, I do both, have rentals and equities. Why put all your eggs in one basket? I started with rentals because I was scared of stocks, but I've gotten over that. Moving forward I still put money in equities while keeping a down payment worth of cash for any rental opportunities that may pop up.

"Better/best" is very relative. Everyone has their own risk tolerance.

What do you mean when you say their are reasonable places near you? Have you actually run the numbers to see what kind of cash flow they would produce?

Eric

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Re: Investment Choices
« Reply #3 on: January 28, 2016, 05:38:54 PM »
There's a whole section of this forum dedicated to real estate investing.

http://forum.mrmoneymustache.com/real-estate-and-landlording/

I'd read there for a while and use what you soak up to run the numbers for places that you're considering to see if they make sense.  If not, then you could consider investing outside of your local area (with a partner?), consider a REIT, or consider skipping real estate all together.