The Never Ending Fight Round 1- Real Estate vs Stock Market

ROUND I

This question of the never ending battle in many peoples minds. Should I pull my money from the stock market and invest in real estate in Colorado Springs or should I sell my Colorado Springs real estate and invest in the stock market?

Let’s say that someone has $50,000 in the stock market and asking this question.

STOCK INVESTMENT

They can leave it in the stock market. If the market continues to grow they can earn 12% on their money per year. If the money grows at 12% every year for the next 6 years, their money will have doubled to $100,000. That is not a bad investment. That is a good scenario within the stock market.
When any stock broker sits down to sign you up for any IRA or Mutual Fund, they will tell you that a 12% return is great.

 

VS

 

REAL ESTATE INVESTMENT

They can buy two $80,000 Townhomes in Colorado Springs with $20,000 down on each. The cash flow will be an approximate 17% return. (based on loan $60k, 30 yrs, 4%, HOA dues, property management fees, Taxes and insurance.) If there is economic growth similar to the stock market, you are looking at another 3% inflation per year not on your $20,000 down payment, but on the value of the home. ($80,000). Finally there is debt reduction every time a tenant gives you rent to make a payment. There is approximately another $2,500 in principal reduction each year. When you add everything up it turns out to be $8,308 per year which is a whopping 41.5% return per year. In this case your money doubles in 1 3/4 years.

So, given those very basic scenarios, who wins Round 1? Real Estate or Stocks?

How can anyone really debate it? Round 1 goes to Real Estate, it is absolutely clear.

“Own Real Estate”

View Round 2

Rob Reinmuth

Rob Reinmuth

Your Colorado Springs Realtor, Rob Reinmuth, is the owner of Acquire Homes, Inc. He is a Colorado Real Estate broker who comes from 10 years in the banking industry. Established in 1989 in Colorado Springs as a real estate investor himself, Rob has negotiated 100’s of property transactions with success. Rob believes his Clients homes to be the most important investments of their lives. He was inducted into the Elite 25 of Colorado Springs in 2017 which consists of some of the highest volume selling agents in Colorado Springs. Rob has a Son who serves in the United States Marine Corp and a Daughter in College. He grew up in Colorado Springs and knows it well.
Rob Reinmuth

Rob Reinmuth

Your Colorado Springs Realtor, Rob Reinmuth, is the owner of Acquire Homes, Inc. He is a Colorado Real Estate broker who comes from 10 years in the banking industry. Established in 1989 in Colorado Springs as a real estate investor himself, Rob has negotiated 100’s of property transactions with success. Rob believes his Clients homes to be the most important investments of their lives. He was inducted into the Elite 25 of Colorado Springs in 2017 which consists of some of the highest volume selling agents in Colorado Springs. Rob has a Son who serves in the United States Marine Corp and a Daughter in College. He grew up in Colorado Springs and knows it well.

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