Stocks vs Real Estate: Why You Should NOT Buy A House In 2025
Published: 2025-01-06
Status:
Available
|
Analyzed
Published: 2025-01-06
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Real estate investments made before 2018 outperformed the stock market by 20-50% (excluding rental income).
"overall on any deals that were purchased on or before 2018 the real estate Investments actually outperformed the stock market by about 20 to 50% not including rents"
Pending
Purchases made on or after 2020 show mixed results; a West Los Angeles home underperformed stocks by 35%, while a Las Vegas purchase outperformed by 100%.
"for anything purchased on or after 2020 things are a bit mixed for example I bought a home in West Los Angeles that underperformed the stock market by about 35% but my purchase in Las Vegas overperformed the markets by about 100%"
Pending
The stock market has performed exceptionally well since COVID, even outperforming with considerations for low down payments and mortgage rates.
"the stock market has been on an absolute tear since covid and even when you account for low down payments and low mortgage rates stocks overall still did better"
Pending
Nationally, home prices increased by 47% since the pandemic began, while the stock market rose by 124% in the same period.
"nationally home prices have risen 47% since the start of the pandemic during a time when the stock market has risen 124%"
Pending
Leveraged real estate purchased before 2020 with interest rates below 4% has significantly outperformed the stock market.
"leveraged real estate at a sub 4% interest rate purchased before 2020 has so far outperformed the stock market by a very wide margin in most areas"
Pending
Purchasing a home in 2022 with a 6.5% interest rate makes the cost of borrowing too high to be offset by the benefits of leverage.
"if you bought a home in 2022 with the 65% interest rate the cost of borrowing money just becomes too high to offset the benefits of Leverage"
Pending
Historically, the S&P 500 has averaged an annualized return of 10.6% over the past 100 years, including reinvested dividends.
"over the last 100 years years the S&P 500 is averaged to 10.6% annualized return with dividends reinvested"
Pending
An initial investment of $100,000 in an index fund is projected to be worth $750,000 after 20 years, with reinvested dividends.
"after 20 years your $100,000 is going to be worth $750,000 with dividends reinvested"
Pending
A $100,000 investment in leveraged real estate is projected to grow to $872,000 over 20 years, assuming ideal conditions.
"your $100,000 investment over 20 years will have grown to $872,000"
Pending
Leveraged real estate offers similar returns to the stock market but requires significantly more effort.
"all of a sudden leverage real estate is pretty much the exact same return you would have made in the stock market except with a lot more work"
Pending
Most homes, unless actively sought for value-add opportunities with favorable financing, primarily serve as a hedge against inflation and shelter, rather than a strong investment.
"unless you're specifically out there trying to find undervalued real estate that you could fix up at a favorable mortgage rate in a landlord friendly City at best most homes are simply just a hedge against inflation and a roof over your head"
Pending
In the short term, given current prices and mortgage rates, investing in assets like stocks is predicted to yield higher returns than real estate, despite greater volatility.
"in the short term at least at today's prices and mortgage rates investing in other assets like stocks seems like it'll make you more money even though it can be more volatile"
Pending
The speaker has not found many attractive rental property investment opportunities since 2020 and prefers investing in index funds.
"for me I just haven't seen many opportunities after 2020 and I'm much happier just throwing it all in an index fund and letting it do the heavy lifting for me"
Pending
Current property prices make profitable cash flow from rental properties unfeasible, and the speaker would not be able to execute such deals today under present conditions.
"at today's prices none of this would be feasible nothing would cash flow and when the conditions aren't right it's just I wouldn't be able to do it today"
Pending
Considering the effort involved, index funds appear to be a more advantageous option than rental properties on a dollar-for-dollar basis.
"when I look at all the work involved in that index funds dollar for dooll just seem like a better option"
Pending
In approximately 50% of markets, real estate appreciation can exceed the national average, potentially leading to higher returns than those outlined in the analysis.
"there's also a chance that your Market where you buy real estate appreciates faster than the national average which is the case for about 50% of properties so you could make a lot more money than what I outlined here"
Pending
The primary profit in real estate is realized at the time of purchase rather than at the time of sale.
"when it comes to real estate you make the majority of your money when you buy and not necessarily when you sell"
Pending