Poll: Do you invest in real estate?

[Dont_know_mind]

Everything has its positive and negatives.
I don’t think there is anything special about CRE or residential property or stocks or vacant land.

It’s hard to go past returns from SP500 in the last 10 years.
CRE and residential property underperformed the SP500 in that period by a substantial amount.
If you had applied any amount of leverage to SP500 over the last 10 years, which would be considered conservative on CRE or residential property, your returns would be amazing.

But the future doesn’t always and often doesn’t resemble the past.
I’m pretty agnostic and don’t care about the asset class.

2 things work against each other and often make it very hard to be an active investor:
1. You need deep knowledge of an asset class to know what is a diamond.
2. A man with a hammer usually finds lots of nails.

I’m a believer that investment knowledge compounds over time.

Very few people seem to invest in stocks and real estate well.

It’s hard to surpass the diversification and cost benefit of indexes. It’s hard to surpass the benefit of non-callability on some types of real estate leverage.

[Molar Mechanic]

Mrs. Molar and I have been drinking real estate investing for six months, and have a few houses under contract (should have closed Friday on #1?).

Especially for those of us who have high incomes (surgeons, derm, rad, whatever) combined with smart, capable spouses who didn’t choose a high income career (school counselor, $42k per year, $25k after tax...not worth the hassle), real estate is a ridiculously good path. There is a learning curve, but the tax benefits are a cherry on top of the return that cannot be understated. My goal is that we’ll retire on real estate, leaving the retirement accounts to grow indefinitely.

[StarTrekDoc]

Mrs. Molar and I have been drinking real estate investing for six months, and have a few houses under contract (should have closed Friday on #1?).

Especially for those of us who have high incomes (surgeons, derm, rad, whatever) combined with smart, capable spouses who didn’t choose a high income career (school counselor, $42k per year, $25k after tax...not worth the hassle), real estate is a ridiculously good path. There is a learning curve, but the tax benefits are a cherry on top of the return that cannot be understated. My goal is that we’ll retire on real estate, leaving the retirement accounts to grow indefinitely.

This.

Direct real estate via the non-physician spouse (or part time physician to document sufficient RE hours) affords a huge tax break off the top. For those with large taxable funding -- this is a huge area of opportunity in dollar investment efficiency along with the power of depreciation and leveraging and asset with cheap bank loans.

Is it passive income? Nope; not even close. Does it outpace index investing? easily if done right, cause it's not passive income. Is it for everyone? no way. neither is primary house ownership or private practice ownership.

RE does allow for some long term benefits in cashflow and diversification that is also nice generational transfer.

[dennis]

Mrs. Molar and I have been drinking real estate investing for six months, and have a few houses under contract (should have closed Friday on #1?).

Especially for those of us who have high incomes (surgeons, derm, rad, whatever) combined with smart, capable spouses who didn’t choose a high income career (school counselor, $42k per year, $25k after tax...not worth the hassle), real estate is a ridiculously good path. There is a learning curve, but the tax benefits are a cherry on top of the return that cannot be understated. My goal is that we’ll retire on real estate, leaving the retirement accounts to grow indefinitely.

Precisely the path I've taken

[formerly_cn]

I have some insight and authority in this matter after doing it a few years.

Any active business with your expertise in it beats the market by a large margin.

RE is no different. However, requires knowledge base and, hard work and risk taking ability.

Just to give you a flavor: I bought land and constructed a retail center. Total cost with everything is around ~$ 2 million. With full tenants right now, based on 6% cap it's coming out to around ~ 4 million. Time frame in all this 2 something years. There is a buyer as well now.

You can do the math. Stuff like this is repeatable but requires work. Passive investment , most certainly, this is not. But then hard to make 'big bucks' passively unless a very long timeframe.
timeframe. Which is totally fine for those wanting to just cruise and not take the headache of running a business .