10% per annum for 40 years (Real estates)

[Debaser82]

Quote from nLepwa:

Yes, you need to factor in the costs.
I assumed the property was an investment (not living in it).

I'd be interested in knowing the following:
if you had $1M to invest 40 yrs ago, what would have been the best risk-adjusted investment? Stocks (including dividends) or RE (including rents and costs). Anyone knows?

Of course I'm not interested in a particular stock or a particular property but in the US market in general.

Ninna

Gold. Up 4000% in 40 years.

The Dow Jones up only 1100% in 40 years.

Ofcourse as pointed out one can prove anything if you can chose the timeline...

 

[Scataphagos]

Quote from nLepwa:

Yes, you need to factor in the costs.
I assumed the property was an investment (not living in it).

I'd be interested in knowing the following:
if you had $1M to invest 40 yrs ago, what would have been the best risk-adjusted investment? Stocks (including dividends) or RE (including rents and costs). Anyone knows?

Of course I'm not interested in a particular stock or a particular property but in the US market in general.

Ninna

Dow was about 800 in 1970, about 12,000 now. That's about 6.8% average return.. plus what, 3% average dividend? That's about 10%/yr.

 

[Kassz007]

Quote from Scataphagos:

Dow was about 800 in 1970, about 12,000 now. That's about 6.8% average return.. plus what, 3% average dividend? That's about 10%/yr.

Inflation adjusted S&P500 returns with and without reinvested dividends since 1950:

http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm

 

[Zr1Trader]

With real estate, assuming that property values have gone up on average 4-5% a year..... rents-costs, and tax benefits of depreciation on the house +appliances, deductible on interest payment ect. you can make 20-40% a year on your original downpayment per house. So if you bought rental houses with 1 million 40 years you would be sitting pretty. After the house mortgage is paid off you make even more .

 

[Zr1Trader]

Another example .

 

[Zr1Trader]

Keep in mind , like any investment, there are variables that effect the ROI. Your personal tax situation, interest rates, average rents, price paid for house and when. So it is hard to compare stocks vs realestate because of these variables but those are two examples of what is possible.