❓ The data: Invest in REITs or real estate? | FinTips 🤑

Today we're looking at the returns of single-family real estate vs. that of investing in a few REIT's. For those of you thinking of investing in real estate or going the route of REIT's, today is for you.

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[Knowmoneyknowlife]

Most of what I invest into other than my own two companies are REITS, stocks, cattle raising and when I move up in house I’ll rent out the one I live in today most definitely buying cash and using a property management company. I have a low tolerance for debt🤷🏽‍♂️

[cdub]

The most important distinction here is the difference in available leverage & ability to borrow to pay for real estate then rent out to someone else to pay the loan payment

[lopezzepol]

Dustin, you're not counting in cash on cash returns and/or equity pay down. with that returns are higher in physical real estate

[jeffreylevin]

As someone who lost 6 figures on an inflation adjusted basis on his house purchase (bought in Jan 2002 and sold in May 2016 for less on a nominal basis - this does not include 14 years of maintenance, taxes, 7% cost to sell etc), i can say that buying a reit and renting would have been a much better decision using hindsight. Your charts mean nothing.

[Isaiah.]

REITs all the way!!! Only property to manage is my own house. Period. That's a lot of work as is.

[brucesmith]

Great info Dustin think about rentals from time to time but don't like the thought of dealing with people on that level.

[rayrojo]

Does the real property graph only take into account appreciation? If so, it seems like cash flow should also be considered. 15-20% cash on cash returns!!

[unemployable]

You are ignoring tax benefits, buildup of equity, rental income, and the benefits of debt financing. I regularly get 30%+ return COCROI. There is also unpaid investment of time, concentrated risk, barriers to entry/exit, diminishing returns over time, and difficulty scaling. This could easily be a 40 hour video.

[ichoudhury]

Maybe a dumb question here, if/when recession hits and we see a major downturn, obviously we loose capital growth but do we also face divided losses? I guess I’m trying to determine if REITs are Gold, Silver, bond etc alternative during economic downturns because you continue to get divided while stock price recovers.

[ecnnthuman]

Just keep in mind you are comparing unlevered single family home returns to levered REIT returns. You would have to scale down the REIT returns by the Debt To Asset ratio over time, most REITs have around 40% debt to assets, fyi. Also the tax consequences are very different for taxable investors.

[marktalksmoney]

I prefer rentals for the ability to generate sweat equity from renovations.

[aks]

real estate investing is leveraged investing, that 3% is not on what you put down on rental that 3% is on the purchase price. plus cash on cash and equity paydown. also there are clusters within broad south, east, west where 3% can be upto 6%.

[garry]

Lot of chatter about an index investing bubble. Any thoughts?

[raymondkent]

Leverage. Case point match.
Ignoring vital components is a big part of our society, though. See the BLM and feminist movements.

[deanberger]

Nice! I hold both REITS and 2 rental properties. I definitely like REITS more. But for my own reasons I guess lol. Smashed the like :)

[AK-kyou]

I like both. Reits are definitely easier to manage.

[mindsinmotion]

Great video. This is a popular topic among investors.