[USER]

I was looking for opinions from on purchasing a rental property as an investment vs just keeping the money in the market.

Are there certain circumstances where one becomes better than another?

[Robert]

It frankly impossible for us to answer that question, without knowing more about your income and your assets; and what you were planning to buy, and where you were planning to buy it.

There is no “one size fits all” to FIRE; every decision will be you need to that particular individual. I have been able to pursue both – accumulating residential rental real estate, while growing my 401(k) over time.

I will say that in my opinion, the unbeatable thing about residential rental real estate is that once those suckers are paid off; then you and your heirs have an income stream that you cannot outlive.

To me, that is almost priceless.

But again we don’t know your individual circumstances.

[Barron]

I try to balance both- my spouse doesn’t save and relies on the real estate portfolio for his future retirement funds.

He also doesn’t plan to ever stop working and enjoys the house projects over his current career. I would like to FIRE

We’re closing on the purchase of our neighbor’s house next week before it goes to foreclosure (estate sale, unpaid mortgage for a year).

It needs a lot of TLC but not a gut renovation. $100k purchase and about $50k of material improvements needed.

Zillow estimates the home is worth $360k. Between sweat equity and future rental income the market can’t match this deal.

[Matt]

A property is only a good investment if you get it for under market value or you improve the property and it’s worth, and if the rents are priced right and managed well.

You also need a healthy sinking fund and emergancy fund.

Lots can go wrong but if everything works out, there is USUALLY more upside potential vs investing but way way way more hands on compared to dumping money into the market.

Just my 2 cents

[Mindi]

When the stock market is down it’s good to have rentals. When real estate is down it’s good to be in the stock market.

[Will]

Rental income is less volatile, presumably.
Markets ebb and flow, but rent is the rent as long as the tenant(s) pay.

[Marisa]

I can retire to become a landlord in less years than it takes to save up and invest in index funds.

[Ian]

I would put it this way:
I think rental properties are great, especially if your goal is wealth generation/growth. Rental properties can offer much higher returns than stocks.

The reason rentals can offer much better returns is because they are not passive investments.

You have direct control over how much/fast it grows in value. If your goal is to be actively involved to grow your wealth quickly absolutely get in to real estate.

You can/will make more than in stocks, but it’s a job/side hustle.

If your goal is to be hands off and uninvolved you will end up paying property managers and other vendors for all kinds of stuff, and your returns may not be any better than the stock market.

[Author]

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