brofest wrote:
Right now I'm renting. I put money in equities every month so they pay some dividends and they appreciate in price. I take advantage of call tax efficient vehicles and reinvest everything.
I've crunched the math a bunch of ways - I'm not totally convinced over the long term that one is necessarily that much better than the other.
Using the math for your friend that is a 20.4% IRR in 24 months before taxes. Sure that is better than renting but what is the normal return - closer to 10%?
Cost averaging the Dow isn't that far off over a long enough horizon and you have way more liquidity. Also closing costs and legal fees associated with buying and selling also eat into that IRR.
Good quick analysis. Can you or anyone elaborate more on the thought process of just investing in a house for renting out to tenants, versus DCA into the index?
I start to think about the assured income of renting out, covering the mortgage/taxes, and then making that bit of cash flow each month. But then I think about the liquidity of going into equities... and I'm just not sure.
24 years old here sitting on almost 40k in savings collecting approx 0%, looking to make a move.