Stock Market or Real Estate?

Let’ s do some simple math.

$100,000 of stocks appreciating at 6% will yield you $106,000 at the end of the year. Of course you have to have $100,000 invested to accomplish this. (Yes, I know you can get fancy, but that is the basics.)

$100,000 invested in real estate can give you $500,000 worth of real estate holdings. How? 20% down on 5 homes with a market value of $100,000 each equals $100,000 invested with a worth of $500,000. If each home appreciates 5% your $100,000 investment yields you $25,000 worth of appreciation.

Or how about you find properties that will cash flow with only 10% down. Now at 10% down on $100,000 properties each appreciating at 5% you have 10 properties for a total of $50,000 appreciation in one year! Are you getting the message?

Yes. The gains are tied up in the house and you would have to liquidate the holdings to have access to it. Or would you? You could refinance. Or sell a share of the house.

And, we haven’t even spoken of the other 3 benefits of owning investment real estate. What are they?

1. Cash flow before taxes.
2. Loan paydown by somebody else.
3. Depreciation.

Where do you want to invest for your retirement?

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