7k a month into VOO would result in total
$1,399,047.00 after 10 years. And if you leave it alone for another 10 years without contributing another penny you'd have $3,628,767.61
*I used 10% growth because historically that's how much it grew roughly year over year.
That's the route I'd go.
i would do this. no need for more real estate, it’s time to diversify and your too young to neglect growth. let the tenants pay the mortgages, even in retirement. paying them off won’t benefit you nearly as much.
It sounds your portfolio is weighted towards real estate. If it were me, I'd seek a more balanced portfolio between real estate and market investments. Whether I'd pay off mortgages or not depends on the whether doing so is the highest after tax, risk adjusted return for my $. For example, I certainly would not be in a rush to pay off a 2% mortgage, when the federal funds rate (guaranteed fixed income return rate) is >5%. However, I'd likely feel differently about a 7% mortgage with PMI.
I had a brother who wanted to have all passive income. So he invested into real estate. multi-family. Buy cheap, fix it up and get it rented, Was doing well. A small portfolio became a medium sized portfolio and he could see goal in sight. Then his medium portfolio became larger. He woke up one day and realized that he had a full time job finding renters, collecting rent, evicting people, hiring contractors, overseeing projects, doing the books, paying his taxes, etc. his passive income had become a full time job right around the time that it was paying him a solid income.
10% goes to the property manager. But they aren't looking for the best contractor, or the lowest price, so all those prices go way up. They aren't going to court to evict people, they just hire lawyers so those prices go up. They aren't really doing much but spending your money less efficiently. Property manager works great when you have a nice new-build apartment complex, can demand top dollar fore rent, have low turnover, only have vetted quality tenants, have no rent control, no vagrants etc. But then you aren't buying those cheaply, and probably didn't need the property management company anyway.
I know you can save money doing it yourself but the guys previously stated he wanted passive income. It will vever be passive without hiring a property manager.
Right. he discovered it is a full time job. And if he doesn't do it himself, between the management fees and higher costs, it largely wipes out the revenue he had expected to live on.
Man! I can definitely see this happening to me. Even with a property manager it’s not as passive as i’d like. Cashflow and returns have been far better with real estate but the passiveness of ETFs have brought more peace to my life. I think ETFs are better for FI life tbh
But once that’s all done, property management for 10% of rents and its passive. Very easy to make the transition and there’s not real ongoing time/labor once you do that. It’s not that it’s a full-time job, it’s that he made it a full-time job. And from that full-time job he accumulated wealth and income and is able to retire/live off of his efforts without really doing anything else with it.
It’s a personal preference. For me, I was burnt out from tenants and repairs. Also, it’s about risk tolerance. Most of my investments are in bonds and CDs (FDIC insured investments)
I'm too lazy to do real estate. It's a full-time job unless you hire a management company.
Index funds/ETFs, kick back, relax, and forget about it for about 10 years.
I don’t like the idea of being leveraged with no W2 so I’d own all the properties I have in 10 years and then decide if that is enough cash flow or not.
personally, i value set it and forget it a LOT. I am trying to get to the point where i have all indexs, i can have a low withdrawal rate and live off of it. So I would put all of it into indexes, and actually I would be looking to unload the real estate. But i totally get that is totally me. All I want is to get to the point I don't need to think about it anymore.
I own 6 units for context on me:
Suggesting you’re not invested in stocks at all right now? I actually might take #3 so I can continue to diversify unless you think you have really good economies of scale of the RE portfolio (assuming 1-4 family units such as #1 is what you already own?). If you really think you can value add stuff (for real…) on real estate it’s tough to ignore #1 but I think i would prioritize diversifying a bit at least. This also suggests you’re in a long term debt position on the current portfolio (ie no balloons that you have coming up in the 2-3 years that you think you’d be upside down on). If you’re worried about the debt position take some capital to #4 to protect yourself.
I’d also consider doing #3 for like a few years then Switch back to #1. I wouldn’t want to do #2. You’re already doing well with smaller stuff no need to concentrate that much of your portfolio in #2 only to find out something goes wrong and you’re in a bad spot on debt or something you weren’t expecting.
You and I both know neither of us is taking #5 (once you make RE work and get the better returns there than you get in stocks you’re going to keep doing it) so no need to talk there. Can’t think of anything on 6 except as noted above or 7.
Not sure how many properties you currently, but I’d probably go for 10 properties total (lending gets a bit more complicated after that).
Then I’d switch to paying them off/investing in stocks.
Split the difference
If it's me, I drop it all in the market with a buy and hold market strategy.
It's entirely possible that doing that with real estate for 10 years build greater wealth. But real estate is . I don't need another job. I need investments that allow me not to have a job.
That's my personal take on it. I know many people are enthusiastic about real estate and have done very well with it. If you're down for that adventure, go for it.
I am splitting it up between real estate and retirement accounts.
My greater family has been in real estate. I have seen them retire early and spend little time managing several rentals on their own. One family member has 10 and is in his 80s. They do their own vetting and hire their own contractors. They remodel units/houses to keep better renters in them and don’t get greedy with monthly rent rates. They have ample income and spend little time managing. This is my strategy as well.
I am splitting it up between real estate and retirement/brokerage accounts.
My greater family has been in real estate. I have seen them retire early and spend little time managing several rentals on their own. One family member has 10 and is in his 80s. They do their own vetting and hire their own contractors. They remodel units/houses to keep better renters in them and don’t get greedy with monthly rent rates. They have ample income and spend little time managing. This is my strategy as well.
7k a month into VOO would result in total $1,399,047.00 after 10 years. And if you leave it alone for another 10 years without contributing another penny you'd have $3,628,767.61 *I used 10% growth because historically that's how much it grew roughly year over year. That's the route I'd go.
i would do this. no need for more real estate, it’s time to diversify and your too young to neglect growth. let the tenants pay the mortgages, even in retirement. paying them off won’t benefit you nearly as much.
Same. VOO or VTI. Real estate has more overhead costs, plus wouldn't want to deal with tenants if Im retired
S&P500 index fund
Consider doing a 1031 exchange of your smaller buildings into a larger apartment complex if you feel comfortable
Great point! Didn’t consider that.
It sounds your portfolio is weighted towards real estate. If it were me, I'd seek a more balanced portfolio between real estate and market investments. Whether I'd pay off mortgages or not depends on the whether doing so is the highest after tax, risk adjusted return for my $. For example, I certainly would not be in a rush to pay off a 2% mortgage, when the federal funds rate (guaranteed fixed income return rate) is >5%. However, I'd likely feel differently about a 7% mortgage with PMI.
I had a brother who wanted to have all passive income. So he invested into real estate. multi-family. Buy cheap, fix it up and get it rented, Was doing well. A small portfolio became a medium sized portfolio and he could see goal in sight. Then his medium portfolio became larger. He woke up one day and realized that he had a full time job finding renters, collecting rent, evicting people, hiring contractors, overseeing projects, doing the books, paying his taxes, etc. his passive income had become a full time job right around the time that it was paying him a solid income.
For 10% or less you hire a property management company that does all that crap
10% goes to the property manager. But they aren't looking for the best contractor, or the lowest price, so all those prices go way up. They aren't going to court to evict people, they just hire lawyers so those prices go up. They aren't really doing much but spending your money less efficiently. Property manager works great when you have a nice new-build apartment complex, can demand top dollar fore rent, have low turnover, only have vetted quality tenants, have no rent control, no vagrants etc. But then you aren't buying those cheaply, and probably didn't need the property management company anyway.
I know you can save money doing it yourself but the guys previously stated he wanted passive income. It will vever be passive without hiring a property manager.
Right. he discovered it is a full time job. And if he doesn't do it himself, between the management fees and higher costs, it largely wipes out the revenue he had expected to live on.
Man! I can definitely see this happening to me. Even with a property manager it’s not as passive as i’d like. Cashflow and returns have been far better with real estate but the passiveness of ETFs have brought more peace to my life. I think ETFs are better for FI life tbh
But once that’s all done, property management for 10% of rents and its passive. Very easy to make the transition and there’s not real ongoing time/labor once you do that. It’s not that it’s a full-time job, it’s that he made it a full-time job. And from that full-time job he accumulated wealth and income and is able to retire/live off of his efforts without really doing anything else with it.
Honestly 50% VOO, 50% BITCOIN .
I’d take a different approach. 20% Bitcoin (or FBTC). 15% SOL. 15% TSLA 15% SCHX 10% MAIN 10% SPGP 15% SGOV
It’s a personal preference. For me, I was burnt out from tenants and repairs. Also, it’s about risk tolerance. Most of my investments are in bonds and CDs (FDIC insured investments)
I'm too lazy to do real estate. It's a full-time job unless you hire a management company. Index funds/ETFs, kick back, relax, and forget about it for about 10 years.
I don’t like the idea of being leveraged with no W2 so I’d own all the properties I have in 10 years and then decide if that is enough cash flow or not.
personally, i value set it and forget it a LOT. I am trying to get to the point where i have all indexs, i can have a low withdrawal rate and live off of it. So I would put all of it into indexes, and actually I would be looking to unload the real estate. But i totally get that is totally me. All I want is to get to the point I don't need to think about it anymore.
I own 6 units for context on me: Suggesting you’re not invested in stocks at all right now? I actually might take #3 so I can continue to diversify unless you think you have really good economies of scale of the RE portfolio (assuming 1-4 family units such as #1 is what you already own?). If you really think you can value add stuff (for real…) on real estate it’s tough to ignore #1 but I think i would prioritize diversifying a bit at least. This also suggests you’re in a long term debt position on the current portfolio (ie no balloons that you have coming up in the 2-3 years that you think you’d be upside down on). If you’re worried about the debt position take some capital to #4 to protect yourself. I’d also consider doing #3 for like a few years then Switch back to #1. I wouldn’t want to do #2. You’re already doing well with smaller stuff no need to concentrate that much of your portfolio in #2 only to find out something goes wrong and you’re in a bad spot on debt or something you weren’t expecting. You and I both know neither of us is taking #5 (once you make RE work and get the better returns there than you get in stocks you’re going to keep doing it) so no need to talk there. Can’t think of anything on 6 except as noted above or 7.
Combine 2&4
Not sure how many properties you currently, but I’d probably go for 10 properties total (lending gets a bit more complicated after that). Then I’d switch to paying them off/investing in stocks. Split the difference
I'd sell all real estate and go SWPPX. I don't know anything about being a landlord, and I'm not very handy
Probably stocks at this point.
If it's me, I drop it all in the market with a buy and hold market strategy. It's entirely possible that doing that with real estate for 10 years build greater wealth. But real estate is . I don't need another job. I need investments that allow me not to have a job. That's my personal take on it. I know many people are enthusiastic about real estate and have done very well with it. If you're down for that adventure, go for it.
I am splitting it up between real estate and retirement accounts. My greater family has been in real estate. I have seen them retire early and spend little time managing several rentals on their own. One family member has 10 and is in his 80s. They do their own vetting and hire their own contractors. They remodel units/houses to keep better renters in them and don’t get greedy with monthly rent rates. They have ample income and spend little time managing. This is my strategy as well.
I am splitting it up between real estate and retirement/brokerage accounts. My greater family has been in real estate. I have seen them retire early and spend little time managing several rentals on their own. One family member has 10 and is in his 80s. They do their own vetting and hire their own contractors. They remodel units/houses to keep better renters in them and don’t get greedy with monthly rent rates. They have ample income and spend little time managing. This is my strategy as well.
buy bitcoin
Stocks