Stocks Vs Real Estate? In general, if your net worth is under $1 million, then you should start with a house. Here’s why.
Let’s say you buy a $500,000 house with a 3.5% down payment and covered closing costs, which comes to a total of $17,500. Alternatively, you could invest that same $17,500 in stocks and rent a place to live, but you’ll have to balance your cost of living.
Now, let’s assume you tripled your $17,500 in the stock market in seven years, and your house only went up by 4% per year. It may seem like stocks are the better option, but that’s where you’re wrong. After seven years, your house would be worth $658,000, and you would only have a loan of $432,500 because you’ve been paying it off every month. This means that instead of paying off your landlord’s mortgage, you’ve been paying off your own.
Year seven comes around and you sell the stocks, you’ve made $52,500. But with your house, you have $225,500 left, which is more than 12.8 times your original investment. Plus, when you sell stocks, you have to pay taxes on capital gains, whereas with real estate, you may not have to.
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If you have questions about Stocks vs Real Estate. Then you should reach out so we can have a quick call to see if investing in Short, Mid or Long term rentals can help you reach your goals. Text or call (208) 699-5782 and for scheduling a discovery call you can choose a time from my calendar here.
This is straight from my Youtube channel for investing. Give me a follow there specifically for Real estate investing advice and strategies. For information more local to North Idaho then check out my Idaho Channel. Where I break down are market specifically and give tips for home buyers and sellers looking to make their move in North Idaho. Follow that Channel Here.
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