When does it make sense to invest in real estate vs invest in stock market?

It is true Thejamal, you can get lucky and make quite a good stable income off of college kids, and they do tend to self feed their friends as time goes on. I have also seen this go in the total opposite direction, in fact I heard of a place today with tenants from hell. In this case it is an absentee landlord. These brats are tearing the place up because the owner put it on the market.
I would say there is a certain degree of luck to be had when it comes to playing the rental game. Obviously price and demand come into play. I do agree with Dianethare, a better approach might be to both invest and buy some real estate. You do have to have a B plan if something happens and suddenly you no longer have the rental income. As with any investment- there's a reason it is speculative.

 

As the old saying goes, don't put all your eggs in one basket. It's always a good idea to diversify between different asset classes, even if you find one particular class (such as real estate) to be more attractive than the others.

 

It does sound a little odd! I never knew that this was that type of forum!

I've always had rental properties in the less salubrious areas of town, as cheap accomodation is always in demand. I've never been "vacant" for longer than 3 weeks. Other areas taht always seem to do well include those near colleges and hospitals. Just as long as you don't mind renting to students that is.

 

Yeah that's probably a good way to get tenants... there are always people who need that cheap place. And of course this way the initial investment is also going to be lower as cheaper houses.. are.. well.. cheaper.

Only problem I see is that if the areas are a bit..umm.. questionable.. then the tenants might also be the same.

 

I guess that only time one would choose to place all their money in real estate is when they are 100% sure that they'll make more money than they would have made had they invested that money in the stock market. As long as the location is attractive to prospective renters and the rent reasonable then you'll be sure to make money but getting such property is very hard and even then it would be so expensive that it would have been better for you to make some money on the stock market. Or maybe REITs might a good option?

 

REITs are a great way to invest in real estate. It's not going to be as profitable as finding that perfect apartment for a good price from a good location, but it's an easy way that requires no work from your part and it's doable with a much smaller starting capital.

 

I don't think it's hard at all to find good property. Maybe if you're new to the game, but experienced investors know where and when to buy. New investors just need to look at how the experienced ones do it and emulate them.

 

Over here, the safest investment so far is real estate. But, of course, it depends on the are you choose. Whether rural or urban, the primary consideration is the floods followed by the kind of neighborhood and third is the potential for development. When we were looking for a house, one of our prospects was a house in higher grounds that is actually by the hillside. An architect friend pointed out to us the dangers of a landslide. Another prospect is a house beside a creek, not a good one either.

Real estate have stable market values here and I cannot imagine that there will be a crash like that one experienced in the US.