r/investing
Real estate vs equity: please share your experience
Author sold a high-maintenance property to reinvest proceeds into global equity ETFs, citing superior long-term returns and passive management benefits.
- Equities offer superior liquidity and lower transaction friction compared to the hassle of selling real estate.
- Global equity ETFs provide a truly passive investment experience without maintenance, tax, or management burdens.
- Historical data suggests equities can deliver higher net returns than real estate after accounting for all holding costs.
Anyone here who has both real estate and equity investments and can share their pii t of view if they prefer one over the other for their goals?
I personally am all in equities (globally diversified) and just sold a house that was pretty much just costing me money at the end of the day and it was a hasstle to sell and I'm thinking of putting the proceeds into my equity etf to be hands off and have no real estate issues, mantainances, taxes etc as that was just not worth it to even get way way lower returns after taxes and expenses than on my equities long term which were on top totally hands off.
Curious to hear pther point of views and what's your experience on your equity vs real estate portfolio.
Never had to evict an etf...
Or had to scoop an ETF's feces off the carpet as a goodbye surprise.
Fuck real estate
I own a rental property and don’t recommend it (It’s my wife’s passion project). Yes it cash flows and the tax benefits are nice, but by no means do I consider it passive income.
I also think that a lot of the people who succeeded in real estate had great timing shortly after the housing crash. These days it’s really hard to generate a lot of cash flow unless you’re skilled at flipping.
Houses bought in 2000 and 2004: $140K and $220K respectively. Today’s value: $450K and $560K.
$100K invested in 2000. Today’s value $2.6M.
Any question?
My wife and I own two rental properties in Denver and have about $500,000 across our stocks and 401(k). I’ve definitely had issues with tenants over the years that have led to serious heartache, but we’ve also stayed cash flow positive and have developed major equity in those properties. It’s definitely easier to not own real estate and be completely hands-off, but I’m honestly thankful for those properties as they have generated considerable income for us over the years. About a year ago we stopped renting to families and signed a three-year business lease with a company using them for sober living. It increased the take-home each month by around $2400 and now we’re no longer dealing with a management company.
We’ll see how this goes over the next two years, but if it continues, I’ll be very thankful that we own real estate because the money is generating every month is a lot more than we’d be making in the stock market and we still can sell these at any time.
The answer is leverage and scaling! Yes, you can get 10% in the market vs only 3-5% in real estate but you can't get a 5x LTV in a margin account and you can't scale with equities like you can with real estate. Banks will throw money at you knowing the loan is backed by a physical asset, they're less generous when it comes to assets they don't have their hands on and can disappear in a day. I have both and can say personally that Real estate isn't passive and comes with challenges but I like it and it's worked out for me.
Yup. I thought the HELOC was great until I discovered equity margin.
I sold one rental back in 2022 and put that money into semiconductors. Now I'm just waiting to get a good price for the other rental.
That capital appreciation during/after the pandemic was great, but aside from that, they bring in a low return on equity. I can do just as well with stocks, without all the surprises and maintenance costs.
To be completely and utterly honest? The only reason I've had real estate the past two years was to purposefully use them as tax loss harvesting. I am purposefully selling them at a loss because I have to offset seven figures in capital gains if I want to rebalance my brokerage account.
This sounds like what is happening and not what you planned or is ideal.
Like two years ago you anticipated losing equity it’s the goal of lowering your taxable income despite knowing the power of investing?
do REITs count as Real Estate?
Not for me as you cant leverage them (main benefit of physical real estate) and they dont give you problems with tenants mantainance etc. Reits are more similar to div paying stocks but tbh i dont see any point in REITs
I early retired on boring. Whatever floats your boat man.
I’ve done both. Real estate is a part time job with where you get phone calls in the middle of the night to say that the furnace or water heater is not working. Equity is a part time job that you work at the time you want. Neither are guaranteed. Real estate requires funding even when it’s not generating income. Taxes, mortgage, etc. Investing doesn’t require funding unless you’ve purchased on margin.
I prefer to sleep at night. The real estate is sold. Investing is paying the bills.