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racheldarcy is on a distinguished road

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Old 02-20-2008, 10:48 AM

Default Can Property bring a better return than shares?

Shares have always seeme dto be the best type of long term investment, but with recent stock market crashes people have turne dto property instead. In the short term it seemed to provide a better return but in the long term do you think it really will perform better than shares?
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Old 02-23-2008, 02:56 AM

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That depends on several factors. Were you able to get the property for a good price? How much can your rent/lease the property for? Was the building in good repair when you bought it?

If you buy a rental house in this market for $40,000.00, and spend another $10,000.00 getting it up to code, you have spent $50,000.00. Stocks can bring in 15% per year in the higher risk category, so you would need to bring in $7,500.00 per year on the property, or $625.00 per month. That is a lot for a house, although some people will pay it, you just have to be in the right area. Divide the house up in to two apartments and rent each out for $450.00 per month and you have an income of $10,800.00, or 21.6%.

Now, if it sits empty you have a tax write off, or if one sits empty even, but that is not my area. You also have to consider upkeep on the property, which you do not have in stocks.

Another point of view is that people will always need someplace to live, but they may not need the product, or products, that the company you bought stock in.
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Old 02-27-2008, 09:12 AM

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Great information. It is certainly worth thinking about. With a house you get the rental income but also the increase in value.
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