if thinking about <enough to ree-tire?> .... i'd be a bit more cautious ...i watched (& actually benefited from) RE bubble pop here a few years ago. ...of course, same is true of stocks (which is why i'm about 1/3 "bonds" ...and inching that up)This is worth discussing in depth. Intercst's study is a reasonable prediction of what will happen if you use bonds and an S&P 500 index fund to fund retirement in various historical scenarios. But what about real estate?I can't really contribute anything but vague generalizations myself, because I don't really know real estate. But some things cross my mind.* Stocks are comparatively liquid. If your stock investments aren't throwing off enough dividends, you can reasonably generate income by selling shares. Nothing forces you to sell all of a position, you can sell just as much as you need.By contrast, you can't sell off 10% of a multi-family house. Even if you're selling off an entire house, the frictional costs, in realtor fees, are considerable. It seems like if you're using real estate to fund retirement, it makes more sense to focus on net cash income from rents.* Compared to stocks, rental income before leverage is relatively stable. It definitely goes down sometimes, but is a 50% drop in rental income something to worry about? Intercst's study on stocks takes into account cases where the market has lost 70% of its value in 3 years. Is real estate more stable?* You probably still need a margin of safety. I.e. if you want $40K / year of income, how much rental income about $40K do you need to be safe?* Leverage is common and traditional in real estate investing, but it increases risk in retirement enormously. 80% loan-to-value mortgages mean your net rental income is 5x more volatile than unencumbered properties.I'm certainly going to stick with stocks, but I'm sure the answers to these questions would be valuable to people thinking in terms of real estate. - Gus
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