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With stocks you don’t get leverage. Cash on cash return on real estate far exceeds stocks. If you put $20k down on a $100k house and you profit $300/month, that
by briandear 9y ago
With stocks you don’t get leverage. Cash on cash return on real estate far exceeds stocks. If you put $20k down on a $100k house and you profit $300/month, that’s $300/month on a $20k investment, NOT against a $100k investment. That’s 18% per year not counting the equity as well as (possible) capital appreciation. Not to mention the tax advantages due to depreciation. Stocks are nowhere close. If you have a property manager charging 8% of the rent, you then have a cash flowing asset with almost zero hands-on work.
- curuinor 9y agoBut the article does note that there's a gigantic subsidy on the leverage for stupid reasons, and the huge amount of leverage is obviously and empirically dangerous.