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Author: StockGoddess Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78299  
Subject: Re: Probably just a stupid question... Date: 12/18/2011 11:28 AM
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I'm the daughter of an ex-realtor who did nothing but houses her whole life and always told me stocks were a bad idea.

Her properties (mostly land, one commercial) are in Michigan, though, and with 18% unemployment she can't even sell them for what she paid for them now. She IS getting steady rent from her one reantal.

The thing with rentals is they aren't "passive" income. It's a part-time job interviewing tenants, making repairs, keeping an eye on things. I own a rental. It's been trashed. Paint and windows and walls cost money. Rent-wise after repairs I just break even, but I'm building equity.

A friend of mine tried a management company and they took 4 months to rent a unit she knew was in an easy-to-rent area because she usually got it rented on her own in under a month. So she fired them.

That said, I can probably generate a 10% ROI on rent and 4% ROI on dividend stocks. But anyone who's owned rental property knows it is NOT an "invest and forget it" thing. It's a part-time job. And yes, stocks can be liquidated in a day - a house might take a year to sell.

That said we ALSO have family in South America, and rentals kept them afloat when inflation hit triple-digits...

So - the answer? Diversify, of course.

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