WHat is More riskier, buying a rental house with 20% down or buying dividend paying stocks?

$20,000 investment

8 Answers

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  • 7 years ago
    Favorite Answer

    Gee, between the two, which would you want to flush 20K down? A housing market that is oversaturated with supply, a boatload of foreclosures needed to enter the market and a cash-only boom that is turning bust, way to time the high point there ace!

    Or buying a stock which is at 100x multiples to earnings and has done nothing but go up as long as the FED continues to pour free money into the mix to the tune of 85 Billion dollars a month. Remember that this is a private bank with no depositors that has somehow managed to accumulate 4 TRILLION dollars in MBS and UST's.

    Seriously, some good, productive farmland with a secure water supply and some wildlife might not be the worst thing you could blow 20K on, but then again, it wouldn't buy much (maybe 10 acres). You could always buy a little gold (since the Chinese are buying like crazy and the industry is tanking) or the poor sister metal and then add a little base lead to the mix. Sure it doesn't pay a dividend, except that it seems to keep it's value while the currency continues to tank.

    Between your two choices, a mattress.

  • 5 years ago

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  • 7 years ago

    Generally rental real estate pays a better return on your investment but it requires some effort. You have to keep up the real property and find tenants. You're leveraging your real estate investment with returns on 100% of value while only investing 20% of value. Can't do that with stock since the 1920s.

  • Anonymous
    6 years ago

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  • 7 years ago

    Whether the rental property is risky depends on two things: its location, and whether you are willing to work at it, to keep it maintained and keep paying tenants in it. With a dividend-paying stock, you must trust the corporate managers to do their jobs. Trust others, or trust yourself? In a sense, you should think of the rental property as a dividend-paying stock where you must manage the capital AND production yourself. Or you can hire a professional manager and let that cut into your profits.

  • Anonymous
    7 years ago

    Invest in the ETF REM which is a collection of mortgage reits. Its extremely cheap and now that we have ended QE3 the dividends should go up. Since it is an ETF it is already diversified.

    The problem with real estate are the tenants and the property taxes. With the etf you can get income yet avoid that trap where you can actually lose everything. plus the etf is far more liquid.

  • 7 years ago

    Real estate is much more stable than the stock market right now, as soon as the fed stops printing money Wall Street is going to collapse.

  • 7 years ago

    Buying a rental house with 20% down!!

    :-)

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