Stocks vs. Real Estate (for Long Term Investing)
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- Опубликовано: 4 окт 2024
- Learn 3 reasons why I will never buy a rental property and why I prefer stocks over real estate investing any day.
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Hey Richard, watched this video because your title piqued my interest. I was reluctant to write this, but as a real estate investor myself, I couldn't disagree more with this video and I think you're doing a disservice to viewers by making blanket statements like this about real estate investing. First of all, the ROI isn't nearly as simple as just looking at a 5% average increase in market value per year. You speak about value investing and finding undervalued stocks, which I think is great, but this should also be applied to your RE deals. If you're buying something completely overvalued for the sake of it, then of course that doesn't make sense. But if you are looking for properties that you can increase the value of while also leveraging your money 5x to 20x, then this has such an impact on your overall returns. I've personally been able to generate returns far exceeding 20% in the first year on a property, and that return only gets better over time as you also pay down the loan on the building.
Also, you get insurance for your tenants trashing a place, and tenants are legally bound to lease contracts. Due diligence on tenant selection is a must, but you can vet every applicant. Obviously, every market is different though, and real estate is quite market dependant. Just thought I'd share my $0.02. I'd also recommend you reconsider and add some rentals to your portfolio! By the way, not trying to bash your video by any means, I just wanted to share a couple thoughts. Keep up the content man!
Thanks Griffin, I’ve watched some of your videos in the past and have enjoyed your content so it was cool to see a comment from you. Thanks for watching :)
My video wasn’t intended as a detailed analysis of both options, more so just my reasons for sticking with stocks.
I didn’t get into the numbers at all in this one and I do know there is more to rental property returns than just the appreciation of the property.
I do mention the easy leverage aspect that real estate has going for it near the end of the video, but even in spite of stocks not having the easy leverage thing going for them, I know I’ll still get better returns with stocks (because of reason number 3 in the video).
Not having to deal with tenants is just a bonus at that point.
Owning a few million dollars in rental properties would quickly become a part time or full time job depending on how hands-on you want to be with doing the improvements etc. and that doesn’t align with my goals and isn’t worth it for me considering the returns I can get with stocks.
Thanks again for watching. You’re killing it. I respect you.
Dont you meant that returns get worse as you pay down the loan? If not then your returns would be higher without any loan to begin with. As you pay down the loan what happens to the return on your equity?
Hi Richard, really not sure how you’ve only got 4.5k subscribers, keep this up and this channel will blow up. I haven’t forwarded on an investment video for Months but have forwarded many of yours to many people. Buffett himself would approve of your material. A business makes profit by producing goods and services and then retains earnings to reinvest into producing more, inventing new products and services. A rental property consumes most of if not all and more of its earnings just keeping maintained to the same standard as it was originally, meanwhile new builds leap ahead in technology. As you point out, returns are goosed with leverage which can blow up as well. I haven’t seen a rental property yet that has birthed another rental right next to it, this is what a business does every day… There is simply no comparison, but people flock to it, as you attain the mental ability to be a rental property investor at the same time you attain the age of 5. Also worth noting Robert Shillers exceptional data in irrational exuberance pointing out that property returns over the long term are generally zero in most locations.
This is a really amazing comment to get. It made my day reading it when I woke up yesterday morning. Thank you. Very well written as well. You said it perfectly. Thank you too for mentioning the Robert Shiller point. That's really interesting. If I do another video similar to this on in the future I'll for sure pull from that data! Thank you so much for your support Rob!!!
I have some rentals and owned some stocks as well. Rental is good if you buy low during the 08 which I did.
Moving to stock more and more due to its passive nature.
Love your show and will continue learning from you. Knowledge is power. 👍
Awesome! Thanks for your comment. Love what you said.
most homeowners i talked to, dont know how much their property is worth. they usually have a general idea, but its mostly based on assumptions that may be true 10 years ago.
For sure! most people have no idea!
Keep up the great content Richard!!! Informative and helps to evaluate basic differences that can add up to a lot on the end!!! I’m with you in that value investing in order to get wealthier gradually over time with having done the homework is my preferred option.
Thank you so much Jason! Really appreciate your support :)
Powerful reasons, Richard! Thank you for inspiring me in this RUclips world! 🥳
My pleasure!!
I love the idea of house hacking and making passive income through investment property however it does seem like a at least half to full time job and comes with some crappy risks should you ever run into issues. Stocks on the other hand don't require you to fix the kitchen sink for them if the tenant damaged them and is more liquid should a horrible emergency arrive (which hopefully never happens). Not to mention, they are not as efficiently priced and you can find deals of your lifetime from the comfort of your couch. Solid video dude.
Really excited that you’re learning about value investing bro 🙌🙌 thanks for watching 🙏
Nice one, thank you. just wanted to say that you are a bit mistaken, but you provided the leverage reasoning at the end of the video:))) for each investment, there are some pros and cons.
Thanks :) You're right there is definitely pros and cons. This video was more so just supposed to be the reasons why I'll be sticking to stocks :) Thanks for watching to the end too. I'm glad you enjoyed it!
Loving your videos. This one is particularly great. I'm planning on investing in real estate as well as continuing to invest in stocks. I see benefits of both, and benefits in doing a bit of both. We'll see if I still feel that way after I start my RE investing. I do think it is silly when RE investors act like the stock market is a casino - glad you hit on this.
Thanks Marc! I'm glad you enjoyed it. Really cool that you "get it" when it comes to the stock market. I'm sure there are some good real estate deals to be find if you look hard enough, and of course the leverage aspect of it is great :)
Very well explained, Richard. I am glad youtube suggested me your video.
By the way what is your opinion about REITs ( Real Estate Investment Trust). Is it worth to invest in them?
Thanks Nitesh! I don't personally own any REITS but that doesn't mean I wouldn't even consider at a REIT. I think I'll get higher returns investing in businesses for the most part. As with any investment, the price you pay will always matter and will ultimately determine your return on investment. And maybe the fact that they're publicly traded can work to your advantage and allow you to buy some REITS at prices below what they'd sell for in a private negotiated transaction. And as a bonus with REITs: no dealing with tenants!
Great video. Your third reason is spot on! Loved the discussion on leverage as well.
Thanks Joseph! Appreciate your support brother.
Richard, when I first started watching this video I had a few concerns that there maybe a few assumptions you’re making. Although I won’t say you debunked my concerns a 100% but you did a great job at debunking most of them. Very informative video and I like the perspective you gave me.
Thank-you.
Glad you enjoyed it :)
great video. can you do one comparing franchise investing and stock investing?
I'll add it to the list. I think it would depend.. are you buying an existing business that happens to be a franchise business or are you starting the franchise from scratch? Thanks for watching :)
@@IntelligentStockInvesting the existing business that happens to be a franchise business one would be nice! Like a Mcdonald's franchise for example. Thank you
@@nicholasorlando4817 Well, it would definitely have to be priced low enough that your higher return on investment will be better than just buying the stock! Buying a franchise is like buying a job. As you learn more about stock investing you'll understand more about what a good price to pay for any productive asset is :) It's on the list but it's not near the top for right now. Thanks again for the suggestion.
Hey Richard, thanks for the video. Is there any way to contact you by email? We are looking for beta testers for our platform and we think our platform fits your investment strategies perfectly!
Use richardhopkins90@gmail.com :)
@@IntelligentStockInvesting perfect, we have sent you an email👍
i subbed
Awesome 🙌🙌 thanks for letting me know. Let me know if you have any questions or topics you’d like me to cover :)
@@IntelligentStockInvesting you said u have 90% of ur money in 3 stocks, so 33% weighted? i was thinking doing 15%
This is the most rediculous video on the internet. Absolutely rediculous! Real estate investing is far superior to investing in the stock market. Horrible advice.
Did you watch the whole video ?
Lol time is money. Realestate takes time. And returns less money for the same amount of leveraged risk if you know how to trade stocks...