Reply to Should I sell my house or rent it out?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I've read some retirement forum comments that say real estate is the way to grow your net worth and is always a good investment. I disagree for the reasons that PPs have mentioned, but maybe that's why I'm not rich.[/quote]Well, just do the math. In today's dollars (inflation adjusted), OP can expect to get $2k/month rental income (assuming management co) and retain the property, or 4% return in the market on $600k from sale. Over 25 years, that's $1.2M rental income plus retained property value, vs about $1.2M in the stock market. [b]It's about even either way.[/b][/quote]

It is not. The property will need work. And over 25 years, the needed repairs/improvements will be substantial. Then, there will be times when the property is not rented, etc. Also, where are the property taxes and the home owners insurance (for landlords), which is much higher than owner occupied.

OP, you don’t have to be a financial guru or pay anyone to manage your money. Just buy a diversified index fund and be done.  [/quote]

What makes you believe that in tough economic times when RE plummets and OP loses her value stock market will remain stable and not tank and even produce returns? Stocks depend on consumer confidence just as much as RE market, and if RE tanks and people feel poorer they don't spend and your diversified funds stagnate or go down too.  Great depression was not a one sided thing and market crashes happened long term more times than we care to admit.  Profits from diversified funds work because generally most non risky investments keep with inflation.  Stock prices are inflated too. [/quote]

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