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I tweeted last week that owning Rental Properties was a better form of passive income than Dividend Paying Stocks.
I received some strong feedback for that so I decided to dive deeper and do more research. Here is what I found:
P.S. I might have changed my mind
THREAD
I received some strong feedback for that so I decided to dive deeper and do more research. Here is what I found:
P.S. I might have changed my mind
THREAD
@CJ_Johnson17th announced earlier that he now has $1M in the stock market. Last time I checked, he takes home ~$80k/year from dividend payouts.
$80k/year = $6,666/month
These are impressive numbers, but I asked "What if that same amount was spent on rental properties?"
$80k/year = $6,666/month
These are impressive numbers, but I asked "What if that same amount was spent on rental properties?"
For this example, I assumed you could purchase a Rental Property for ~$200K all in and generate ~$1,400 profit from it every month. That seemed reasonable to me.
$1 Mil buys you 5 $200K rental properties
$1,400 x 5 = $7,000/month
Hmm, that's closer than I was expecting
$1 Mil buys you 5 $200K rental properties
$1,400 x 5 = $7,000/month
Hmm, that's closer than I was expecting
Now there are probably tons of combinations of dividend paying stocks that can make more than rentals, and vice versa.
The point is that the income generated, for the amount invested, is VERY close (at least with the numbers I provided).
So what else is there to consider?
The point is that the income generated, for the amount invested, is VERY close (at least with the numbers I provided).
So what else is there to consider?
For starters, I'd say dividends are certainly much easier to acquire than rental properties:
- You can buy dividends from your phone
- No large initial investment required
- Transactions are completed almost immediately
But dividends won't be for everyone...
- You can buy dividends from your phone
- No large initial investment required
- Transactions are completed almost immediately
But dividends won't be for everyone...
You have ZERO control over the value of a Dividend Paying Stock 
You can, to a certain extent, have control over the value of a Property by having renovations done
Real Estate is a bit multi purpose; you can use it for passive income OR flip for "quick" profit
You can, to a certain extent, have control over the value of a Property by having renovations done
Real Estate is a bit multi purpose; you can use it for passive income OR flip for "quick" profit
You can obviously still buy and flip Dividend Paying Stocks but, generally, you won't be able to make a profit as quickly as what you could do with a house.
But that wasn't the original question
The original question was which is better form of PASSIVE income?
But that wasn't the original question
The original question was which is better form of PASSIVE income?
And my opinion on that has changed:
I believe Dividend Paying Stocks are a better form of passive income.
Real Estate CAN be painless, but often times it isn't.
Tenants suck, things break, etc. It happens
Dividends show up when they're supposed to. Very little hassle
I believe Dividend Paying Stocks are a better form of passive income.
Real Estate CAN be painless, but often times it isn't.
Tenants suck, things break, etc. It happens
Dividends show up when they're supposed to. Very little hassle
So, what do you guys think now?
I certainly changed my mind, but I am almost MORE interested now to learn what you guys have to say.
I am more than happy to be wrong again, so send everything you've got! I'm here to learn
Also, always have multiple sources of income
I certainly changed my mind, but I am almost MORE interested now to learn what you guys have to say.
I am more than happy to be wrong again, so send everything you've got! I'm here to learn
Also, always have multiple sources of income
If you're interested in learning more about Dividends, check out these accounts:
@CJ_Johnson17th
@DivCultivator
@DivBabySteps
@HeroDividend
@RodG97
@TheAlphaThought
I've also heard that @ColeFrechou might know a thing or two about rental properties
@CJ_Johnson17th
@DivCultivator
@DivBabySteps
@HeroDividend
@RodG97
@TheAlphaThought
I've also heard that @ColeFrechou might know a thing or two about rental properties
If you like what I have to say and want to learn more from me,
You can find all my courses and eBooks (as well as some other gems) with this link: https://linktr.ee/ethanyorke
You can find all my courses and eBooks (as well as some other gems) with this link: https://linktr.ee/ethanyorke
