Hi,
I'm struggling to set my mind between investing in S&P 500, expecting a 7% average return, or buying a rental property in an area with low rental ROI.
Let's consider the following situation:
*4.5% max rental ROI (i.e. a $150K property rents for $560 monthly).
*$150K to invest
*5% average annual appreciation for same properties over the last decade or so.
Considering the taxes in my country, I'm looking at 25% long term investment taxes and no property tax.
Without leveraging the investment with a mortgage, I'm looking at an annual ROI of 8.5%. Now, I figure that the extra 1.5% ROI does not worth the extra hassle of being a landlord.
If I'm taking a mortgage, I can leverage the investment and get better returns. What would be the ROI delta between property and stocks that would make you prefer buying a property over stocks?
Submitted November 06, 2018 at 07:31AM by cstocks https://ift.tt/2PbkrfK
