real estate. REITs have low cost to entry meanining less money to earn. AND no control of your investment. And you earn more on what you control. Higher risk equals higher rewards.
This advice is absolutely spot on, this is also my strategy. What he means is, do a bit of both, especially in your home town, do invest in physical property, but still put money into bigger real estate projects nationally/globally through investing in REITs👌🏾
REIT have a much lower barrier to entry and are very liquid and easy. You can invest in them until you have enough for a down payment for some physical real estate.
Another great video Andrei, As a 30 year investor in real estate and other alternative investments. I would agree these are two completely different paths for investing as you say. One is what we as a family wealth office say a pure play (real estate) the other is a third party play (Reits). We use both one as a pure tax right off on our profits over all and the other to boost are dividends returns in our stock market portfolio. We own our pure properties through two vehicles, Individually thru some type of LLC or LLP or Family partnership or through our two Crowd funding plate forums. One is for short term holds and the other is very long term holds. The cleaner less stressful way is owning the Reits. This decision really comes down to how a person or family wants to build their legacy, for us it made sense to own both. The other reason for us to own pure real estate is because we also own a residential, commercial building company, a real estate brokerage firm and a demolition and rehab company. Hope this helped! I appreciate all the time and effort you put in to your work. Keep it going!
@@AndreiJikh Personally, as a property manager for the last 15 years I can say it really depends on many factors and personal choice. Depends on where and when you bought the real estate in the past, the capital appreciation, if you want to manage the real estate yourself. Taxes are a big factor. REIT's are taxed at a higher rate then regular stocks. Real Estate has many tax dedications. I believe age plays a factor as well. I bought real estate when I was 30 years old but now that I'm 50 years old I prefer REIT's.
I always give a thumbs up to the videos but hardly comment. So I comment now to say the videos are getting awesomer and better. Thanks for your work, research, study and openness about finance.
The advantage of real estate is a tenant will pay off your investment. With reits you have to have the cash to purchase a share and only get paid interest on what you already own. I want both though :)
Well dividend are like rent though. The difference is leveraging your money. Getting 100s of thousands of dollars at 3-4% interest and making 7-12% returns. Subtract the difference you make 4-8% on all that borrowef money.
@@Fastrap87 yeah but margin is alot riskier then a mortgage because if the value of your stock goes below a certain amount the stocks will be sold off to cover the loan. That doesn't happen with a mortgage
I have both and I use my REIT dividends to pay extra on my mortgage principal, that way I pay off my house faster, lessens my monthly interest payment and more goes on my principal and makes my equity bigger as time goes by 😏
Love my REITs! Started out with monthly distributors like LTC, O, and EPR because of the psychological factors you mentioned. It's also come in handy a few times when unexpected expenses like major car repairs came up, pretty easy to turn off reinvestment for the month and cash out those dividends. One thing you sort of touch on but definitely bears re-emphasis is that with REITs you can tap into the expertise of people in very different fields. Anyone can learn how to run a rental house but it's not so easy to develop your own data center (COR), retirement home (LTC), driving range (EPR), or college student housing (ACC). Big help diversification-wise and you can improve your returns by investing in REITs that specialize in fields with a solid macro outlook for the long term.
You can leverage in real estate with little to no risk. Also, if you are not able to pay then mostly they cannot get money from you just the house. You can put $25K down to buy $500K house. With 5% growth in 10 years you make $500K. If you buy $25K REIT stock with say even double of the return - 10%, you make only $25K in 10 years. $500 / $25 equals you make 20 times less money in REITs as opposed to Real Estate. In addition, if you buy one house, keep paying mortgage, rent it out, then you can buy another one, then another. Yes, housing crash can happen, but they are much more quick and less severe than stock market crashes, plus tenants are paying anyway. If you want to achieve similar results with stocks, then you have to learn to trade on options and leverage, and those are more risky and require more knowledge than just leveraging on real estate. Don't forget the leverage in real estate. 3.5% is only 2% from official inflation, but unofficial inflation is much more, and we even expect hyperinflation because of all this printed money. If you get 1 million mortgage by putting 5% down and then hyperinflation happens, it will mean bank will just pay you for huge leveraged property to own. Nobody does it in stocks.
REITs and Real Estate are different investments Reits - dividend income and price fluxuation Real Estate - Rent Income and price fluxuation With Real Estate, in addition, you get tax advantage such a depreciation, deduction of expenses, 1031 exchange, With Real Estate, you can leverage at very low rates for long periods of time, also you get access to cash from refinance, also you can increase the value with upgrades With Real Estate, you can search an area to learn values better and always buy at below market, maybe 10 to 15%. With Real Estate, you can either hire out work and responsibility or pay yourself to keep it. With Real Estate, you increase management skills, people network, ability to handle issues Reits are a place to make money and Real Estate is a place to get wealthy.
It’s easier to cost average with REITs. In my experience, the best returns are made when you use big market dips to load up on the REITs or REIT ETFs that you like.
With real estate an beginner can only start with real estate in residential areas because those kinds of properties are cheaper but they are much riskier then commercial or industrial properties... I mean when the economy gets rough the first kind of real estate who get hit are the residential real estate. With reits you can invest in a reit who only invest in commercial real estate (which are more expensive to aqquire)....
I'm an old sick man who has owned fair amounts of both. Reits allow small investors to own prestige investment quality property that might be otherwise unobtainable. Reits also assume the responsibility for ALL of the burdens of management. Reits are more easily (perhaps too easily) bought and sold. On the other hand real estate gives the owner more opportunity to invest creatively, (i.e.) buy run down property, upgrade it, and sell it at a profit. However, It has been my experience that investors in real estate often become little more than bookkeepers , maintenance workers, and night watchmen for their mortgagees. In my mind reits are much more desirable.
REITs are what comes closest to real passive income. Real estate comes with terrible headaches if you are a beginner. And at least half of the property managers are unreliable.
I think when people first want to invest they think real estate and that they're 'ready' to get into lots of good debt. But most of the successful investors and particularly the ones that Andrei's listed all receive their income from another business and have all been very savvy about financing. As a landlord and shareholder to a few companies, I can definitely say that I have less headaches when my shares go down $900 then when I have to deal with a fix in the property that costs $900 of extra money, not just money I've invested. I'm rather simple so I put more money into shares now, more peace of mind and liquidity :)
Thanks for sharing that perspective. I have to agree with you about the mental aspect. I imagine having a $900 house repair isn't as fun but really doesn't feel like a big deal when a stock drops. Some people panic! I just figure it's time to bargain shopping :D
I prefer to spend my time working and invest completely passively. Lower risk and lower stress. I love my job as a music teacher so prefer to spend my time doing that even if I get a slightly lower return. Index funds all the way!
I say “no thank you’ to real-estate.,, far too much work... I much prefer to rent a minimalist place and enjoy income from my dividend portfolio, which does include a couple REITs
Yea I've avoided real estate for a long time, just never knew much about it! I do think it's a good thing to invest in if you can make it work but it's definitely not passive
Doing REITs now, studying up on Real Estate on the side/in my free time so I can invest in RE when I have more capital 😎😂 Your vids are so informative and aesthetically pleasing, thanks!! 😁
Nice break down between the 2 Andrei! REITs by far the easiest to get for sure. But as income grow diversify into Real Estate. Great Tips Stay Inspired Man!
With reits, from living in the UK, if you buy through an Isa, you can right off any gains if you invest less than 20k per year from April the 6th till April 5th which makes reits pretty attractive. Also you can learn how to pick the best companies to invest in and purchase those when it's a good time to get in and you can sell when a better opportunity presents itself and or if your current position gets over valued at a certain time period with no hassle to find buyers. Better to diversify though if owning real estate is something that you particularly enjoy 😉
REITS all day. Who wants to put up with lousy tenants, maintenance and repairs, market volatility, lawsuits, and all of the personal time needed to deal with all that. Your time is money. REITs give you more time with better returns.
Overall I like the concept of REIT's for the same reasons as Andrei. Buying rental property becomes your own business, definitely not a passive investment. I would like to invest some money in REIT's. Unfortunately many REIT's have hotels, shopping malls, and commercial office space. I expect poor performance in those sectors for the next few years.
Very solid video. Take $125,000 that you would buy a house with. Invest it into LTC for example at $44.24 with a $0.19 monthly dividend. By my math gives $6,441 a year not subtracting taxes. Take that same number and throw it into $SRET at $15.51 with a $0.10 monthly and you get $9,670.80 a year. REIT's make more sense over a long run if you are an investor and not a house flipper. That also assume you can get a house that cheap anywhere and flip it for more then you put in. REIT's also avoid managing a property, repairs after someone leaves the property, hell legal expenses in some cases and property taxes.
Real estate any day…real property can also be mortgaged for equity releases to acquire additional properties to expand wealth. I think the problem with REITs is since they distribute a huge chunk of their income to retain tax status, they have to continually raise capital from shareholders or seek debt to expand properties diluting shareholder value…maybe it is better to hold other kinds of dividend stocks.
I bought a bunch of condos for cheap when the real estate market crashed. Now these units have doubled in value and positive cash flow monthly... Theres minimal maintenance, majority of issues the condo association takes care of... now reits NRZ,REML,MFA,TWO,GPMT are all bargains right now... The dividends have been reduced however this time next year you will get growth and a nice quarterly dividend. Easy money is the best money good luck
Sal Baldovinos do you mind sharing what they are? I’ve been looking into a few hospitality reits especially now that they are heavily discounted assuming the economy and travel industry bounces back in a year or so
Absolutely the GOAT comparison! I am lucky enough to be in a market that far outperforms REITS but MOST people should just stick to REITs for the simplicity.
For me REITs are the goal .. I like them no Headaches just buy them and sleep and wait for dividends. No maintenance no deal with people who are late with there payment.. its a gold in a plater. I don’t know why people don’t invest to it Other thing I don’t need to get into debt I can buy REITs whatever I can the cash no commitment Thanks a lot 💙
Great video bro! Real estate guy here. It really just boils down to the tax benefits, write offs, opportunity for building equity with the purchase/reno. You can leverage a house with the bank but you cant with a stock or REIT. Of the three types of income - passive, ordinary and active, you will pay more taxes on REITs vs Real estate. In summation, you will not pay any taxes really on real estate and you will on REITS. Its all a trade off. I just stack cash, look for an opportunity that gives the best ROI, then repeat.
@@halloween7275 Property taxes are collected by most counties twice per year. With an escrow account, the lender collects a prorated amount toward the annual tax and insurance bills every month preventing borrowers from getting socked with a big lump sum tax bill that is harder to pay. However, property taxes are an annual tax.
I heard if you put REITs in your Roth IRA it won't be taxed there so you get to enjoy compound interest on top of your high dividends in REITs even if you max out the 6k annual
The highest potential is with real estate (in my opinion) simply because of the fact that you can leverage your money! But REITs will truly produce passive income without any work involved.
REITs don’t pay true dividends, they pay cash redistribution’s which appear as dividends but are taxed very differently. Just wanted to point that out for those interested in purchasing REITs.
With shopping centers closing left and right and e-commerce growth over these past months definitely looking for REITS in industrial sector I think Stag Industrial would be a good option
Personally I'd really love to own real estate properties as well as REITs, I've been informed of people making as much as $30,000 from these investments and If anyone could be lenient enough to share, I'd really love clue and tips on how to maximize profit.
I began investing in REITs made enough profit in a year to buy rental units and parking lots and I'm still investing in Reits and my real estate properties which brings in roughly $480,000 annually, and I was able to generate this figures basically because I got in touch with an investment adviser/broker who guided me make the right investment decision.
@@thomasritchie384 please who is the financial adviser that assist you with your investment and if you dont mind, how do i get in touch with your advisor?
Also: - Real Estate = full time job - REITs = completely passive, which means that your time can be invested in something else, like running a business and making way more money instead, for your time, which is what I do. Managing your own properties (if you were in Real Estate) is paid way less for your time than if you were invested in REITs and spending your free time way more productively. This principle is called "the cost of opportunity".
Gotta say....love that sound and visual for the outro. Watched the full minute and was really well done! Also, awesome video in general. This has been a major conversation the past few months while reflecting on the investment strategy.
You summed it up pretty well at the end there. Each has its advantages. Reits are a truly passive investment, while real estate is basically investing meets side hustle. Real estate has much higher returns if you’re good at it, but it’s also a part time job so it obviously should. That part time job now far surpasses my $40,000 a year day job so it is definitely worth it, but does require a little bit of work and a lot of expertise as you mentioned or things can come crashing down in a heartbeat. Enjoy your content, best of luck in 2020.
interesting! From the UK here, new tax laws are considerably against property investors, for example you can no longer claim back mortgage interest as an expense and wear and tear allowance (unless in a company but mortgages are way more expensive this way). Whereas stocks and REITs etc can be held in a tax free ISA account, and you can contribute up to £20k per year with all the growth and dividends tax free. Say you bought a property and you net 10% ROI after costs on the cash you put in (which is about normal), if you earn over £50k that is taxed at 40%, so your net yield is actually 6%. If I could get 3-5% tax free annual yield on a REIT with none of the issues that come with being a landlord, that wins for me
Real estate gains rents and appreciation, and REITs gain only rents in the form of dividends distribution. Therefore, real estate does better but there is more work and responsibility involved
All RE is local and property returns largely depend on financing terms. REITs usually run 50% debt to equity whereas property is usually purchased with 20%, but changes over the course of the mortgage.
I have mortgage and equity REITs (mutifamily, private prisons, medical offices, assisted living and senior housing), a couple rental properties (with a management company), and also crowd funded equity REITs Fundrise (multifamily and commercial) and Rich Uncles (student housing). Tend to like outright ownership with rental properties but am not complaining about the REITs and eREITs either.
In my opinion the real difference is the work required for personal real estate investments. If you take into account the time it takes to learn your market, plus all the expertise required to buy, own and manage real estate - then assign a dollar value per hour for your time spent on that work, the returns may be much closer (alluding to efficient markets here). Since we normally just look at the total return without taking any of our own time and effort into account, it appears that buying real estate is the higher return. With REITS you are essentially paying for someone else's expertise along with substantially less risk than a single real estate investment. I do agree with Andrei's point that diversification into both is a good idea along with the broader stock market. Thank you for sharing
I do both to be honest. I buy a lot of REIT's but I also bought a condo as a investment property. REIT's are fire and forget for the most part. My condo requires me to keep up with my tenant, pay bills, deal with repairs and upgrades ect ect but its value is unparalleled with rent coming in my mortgage getting paid off and equity sky rocking further raising rents it is great. I should be able to pay off my first investment property in 5 years and then it will cash flow over 1300 dollars a month after my taxes, insurance and hoa payment come out. That is one hell of a return on a $118,000 dollar property. Plus I save money by owning my house because I live here right now and it is cheaper to own than it is to rent in salt lake city and with my roommates I live pretty much for free.
Great vid...REITS are dividend titans and are a massive boost to a stock portfolio. It is about preference. I am in a passive position regarding real estate. I don’t have the interest to deal with property.
REITs right now.. own 4 units plus my own house.. but I work full time also so it's hard to manage the properties especially since I just had a kid as well.. I'm putting most of my extra cash flow from my rentals into REITs
One important factor you forgot is price volatility (principal risk) - over the last week some mortgage REITs actually went under due to margin calls. Equity REITs were less volatile, but still dropped enough to wipe out years of dividends. Physical RE is less volatile, but also less liquid. There are clearly trade offs in all these classes. Research and understand the risks in whatever category you are interested in before investing.
Yes REITs dropped to possibly wipe out years of dividends (although making a good buying opp), RE lags the market and also seeing the same issue with the dividends... many aren't paying their rent right now. Also, RE values lag behind the market. RE values are pretty much untouched today, buy will drop in the next year or two.
I firmly believe real estate performs better, but REITS are lazier and far easier to invest in. If you are good with real estate and have a passion for it, you can make so much more money. I do not have the passion, but may try my hand at it someday. For now, REITS are my real estate vehicle.
If your into that I would say reits simply because they are easy to get (no credit check). And reits cost WAY less than real estate and my personal favorite REITS don't create debt.
Waiting for correction in market prior to a foray into REITs. VNQ via tax free and tax deferred accounts. Realty Income (O) also. CBRE in taxable, no dividends. Making these moves ONLY after big market correction downward. Then DCA in. Starting training to get RE agents license soon to learn more. Just my two cents to this vid. Best wishes.
That's a pretty strong case for REITs, probably the strongest I've seen. Makes me want to put my money in some REITS until I have enough to invest in Airbnb honestly. I've seen the strongest returns there for the least amount of wedge work.
Both are good. I’m an assistant manager at an apartment complex now and I do all the dirty work, evictions etc and I don’t own the building. I might as well get a rental property and do all this hard work for something I own as well. I’m already doing for someone elses asset anyways.
Real Estate or REITs - which do you guys like better?
Andrei Jikh
Love you
You're a wizard
I like REITS. I'm hot handy with doing carpentry work and I'm not a fan of paying someone to do that stuff for me. Haha
real estate. REITs have low cost to entry meanining less money to earn. AND no control of your investment. And you earn more on what you control. Higher risk equals higher rewards.
"Its free real estate"
- Adult Swim
I use to like REITs but they are a very slow growth or many have a negative growth rate. I'm solely with ETF's and capital gains stocks
why I like REIT's:
1. less skill needed
2. less money up front
3. more passive
4. easy to liquidate
And most importantly no headache
@@salg95 Yeah wtf
this is more like a lifestyle choice.
I Started With REITs & Will Continue To Purchase More Each Month. But I Plan To Own Real Estate As Well.
Our country is having our first REIT listing ever. Happy that this asset class will be made available for more people in the Philippines.
Which country?
You're talking about Ayala? What about SM? Isn't that kind of a Reit too? Vista Land too? And a few others.
invest in real estate locally, invest in reits globally
Could you explain? I'm at that crossroad now
This advice is absolutely spot on, this is also my strategy. What he means is, do a bit of both, especially in your home town, do invest in physical property, but still put money into bigger real estate projects nationally/globally through investing in REITs👌🏾
REIT have a much lower barrier to entry and are very liquid and easy. You can invest in them until you have enough for a down payment for some physical real estate.
Another great video Andrei, As a 30 year investor in real estate and other alternative investments. I would agree these are two completely different paths for investing as you say. One is what we as a family wealth office say a pure play (real estate) the other is a third party play (Reits). We use both one as a pure tax right off on our profits over all and the other to boost are dividends returns in our stock market portfolio. We own our pure properties through two vehicles, Individually thru some type of LLC or LLP or Family partnership or through our two Crowd funding plate forums. One is for short term holds and the other is very long term holds. The cleaner less stressful way is owning the Reits. This decision really comes down to how a person or family wants to build their legacy, for us it made sense to own both. The other reason for us to own pure real estate is because we also own a residential, commercial building company, a real estate brokerage firm and a demolition and rehab company. Hope this helped! I appreciate all the time and effort you put in to your work. Keep it going!
Reits are underrated in my opinion. But if you can deal with the headaches, rental property has excellent potential 🤷♂️🏡
Agreed! Real Estate has more up side but with a BIG asterisk 😂
which reits have you been looking at lately
is bgs stock good?
@@TheDreamGreenShow I like the Vanguard REIT fund VNQ
@@ChrisInvests or VNQI for international exposure
I like you. You're very helpful. Thanks bro. Subbed.
This video by far is my fav educational video about REITs vs Real Estate, thank you!!
REITs have a much lower entrance point (cost wise) - I'd start with REITs first, then do real estate when I have enough money 🤑
Yep! Great way of going about it! :)
@@AndreiJikh Personally, as a property manager for the last 15 years I can say it really depends on many factors and personal choice. Depends on where and when you bought the real estate in the past, the capital appreciation, if you want to manage the real estate yourself. Taxes are a big factor. REIT's are taxed at a higher rate then regular stocks. Real Estate has many tax dedications. I believe age plays a factor as well. I bought real estate when I was 30 years old but now that I'm 50 years old I prefer REIT's.
@Cherry "...much lower entrance [entry] point..."
They're pretty comparable when you look at 7.05% vs 6.85% in the last 140 years. Take your pick.
@@luxushauseragency your not accounting for leverage / equity growth an potential cashflow through rent
Great video. I am investing in REITS because it allows me to go as hard as I can. Sometimes the cash to invest isn't there.
I always give a thumbs up to the videos but hardly comment. So I comment now to say the videos are getting awesomer and better. Thanks for your work, research, study and openness about finance.
Thanks Moorish, really appreciate the comment. Usually I'm a lurker too, unless I REALLY like a video, then I'll comment, so thank you! 👍
Leveraged REITs with Margin at 2.5% is the best!
The advantage of real estate is a tenant will pay off your investment. With reits you have to have the cash to purchase a share and only get paid interest on what you already own. I want both though :)
Well dividend are like rent though. The difference is leveraging your money. Getting 100s of thousands of dollars at 3-4% interest and making 7-12% returns. Subtract the difference you make 4-8% on all that borrowef money.
@@antmydude236 can do the same thing with a margin loan and buying reits. m1 finance offers 2% interest rate on borrowed money
@@Fastrap87 yeah but margin is alot riskier then a mortgage because if the value of your stock goes below a certain amount the stocks will be sold off to cover the loan. That doesn't happen with a mortgage
Mr Andrei is a excellent communicate and I enjoy all. His videos. Ty!
I have both and I use my REIT dividends to pay extra on my mortgage principal, that way I pay off my house faster, lessens my monthly interest payment and more goes on my principal and makes my equity bigger as time goes by 😏
which reits do u own
Taxes!!!
Love my REITs! Started out with monthly distributors like LTC, O, and EPR because of the psychological factors you mentioned. It's also come in handy a few times when unexpected expenses like major car repairs came up, pretty easy to turn off reinvestment for the month and cash out those dividends. One thing you sort of touch on but definitely bears re-emphasis is that with REITs you can tap into the expertise of people in very different fields. Anyone can learn how to run a rental house but it's not so easy to develop your own data center (COR), retirement home (LTC), driving range (EPR), or college student housing (ACC). Big help diversification-wise and you can improve your returns by investing in REITs that specialize in fields with a solid macro outlook for the long term.
You can leverage in real estate with little to no risk. Also, if you are not able to pay then mostly they cannot get money from you just the house. You can put $25K down to buy $500K house. With 5% growth in 10 years you make $500K. If you buy $25K REIT stock with say even double of the return - 10%, you make only $25K in 10 years. $500 / $25 equals you make 20 times less money in REITs as opposed to Real Estate. In addition, if you buy one house, keep paying mortgage, rent it out, then you can buy another one, then another. Yes, housing crash can happen, but they are much more quick and less severe than stock market crashes, plus tenants are paying anyway. If you want to achieve similar results with stocks, then you have to learn to trade on options and leverage, and those are more risky and require more knowledge than just leveraging on real estate. Don't forget the leverage in real estate. 3.5% is only 2% from official inflation, but unofficial inflation is much more, and we even expect hyperinflation because of all this printed money. If you get 1 million mortgage by putting 5% down and then hyperinflation happens, it will mean bank will just pay you for huge leveraged property to own. Nobody does it in stocks.
Both are great. Reits are good for starting out without much capital. Ultimately everyone needs to eventually graduate to physical real estate
REITs and Real Estate are different investments
Reits - dividend income and price fluxuation
Real Estate - Rent Income and price fluxuation
With Real Estate, in addition, you get tax advantage such a depreciation, deduction of expenses, 1031 exchange,
With Real Estate, you can leverage at very low rates for long periods of time, also you get access to cash from refinance, also you can increase the value with upgrades
With Real Estate, you can search an area to learn values better and always buy at below market, maybe 10 to 15%.
With Real Estate, you can either hire out work and responsibility or pay yourself to keep it.
With Real Estate, you increase management skills, people network, ability to handle issues
Reits are a place to make money and Real Estate is a place to get wealthy.
It’s easier to cost average with REITs. In my experience, the best returns are made when you use big market dips to load up on the REITs or REIT ETFs that you like.
Your videos are changing my life everyday
Man. Your videos are great. So humble. So charismatic. So professional. Humorous. Very entertaining
With real estate an beginner can only start with real estate in residential areas because those kinds of properties are cheaper but they are much riskier then commercial or industrial properties... I mean when the economy gets rough the first kind of real estate who get hit are the residential real estate. With reits you can invest in a reit who only invest in commercial real estate (which are more expensive to aqquire)....
I'm an old sick man who has owned fair amounts of both. Reits allow small investors to own prestige investment quality property that might be otherwise unobtainable. Reits also assume the responsibility for ALL of the burdens of management. Reits are more easily (perhaps too easily) bought and sold. On the other hand real estate gives the owner more opportunity to invest creatively, (i.e.) buy run down property, upgrade it, and sell it at a profit. However, It has been my experience that investors in real estate often become little more than bookkeepers , maintenance workers, and night watchmen for their mortgagees. In my mind reits are much more desirable.
Yes. Which did you do better on?
REITs are what comes closest to real passive income. Real estate comes with terrible headaches if you are a beginner. And at least half of the property managers are unreliable.
Agreed, I don't think I'd ever trust a property manager unless they were someone I was personally really close with. Just not worth it
Can you make a vid on top 10 most stable long term dividend bluechip stocks
take a look at the S&P 500 aristocrat stocks
I've made a top 7 video. But I can make top 10 for sure, there's a lot I can mention
I love seeing others view points companies
@@TheDreamGreenShow I'm creating a portfolio of just aristocrats
@@mindsinmotion2825 would love to see that!
Actually love these videos. I’m learning so much 😃
Thanks Gali :)
Right they expand how we think in regards to investing
I think when people first want to invest they think real estate and that they're 'ready' to get into lots of good debt. But most of the successful investors and particularly the ones that Andrei's listed all receive their income from another business and have all been very savvy about financing. As a landlord and shareholder to a few companies, I can definitely say that I have less headaches when my shares go down $900 then when I have to deal with a fix in the property that costs $900 of extra money, not just money I've invested. I'm rather simple so I put more money into shares now, more peace of mind and liquidity :)
Thanks for sharing that perspective. I have to agree with you about the mental aspect. I imagine having a $900 house repair isn't as fun but really doesn't feel like a big deal when a stock drops. Some people panic! I just figure it's time to bargain shopping :D
@@AndreiJikh All i see are discounts when its red $.$ haha
I prefer to spend my time working and invest completely passively. Lower risk and lower stress. I love my job as a music teacher so prefer to spend my time doing that even if I get a slightly lower return. Index funds all the way!
I say “no thank you’ to real-estate.,, far too much work... I much prefer to rent a minimalist place and enjoy income from my dividend portfolio, which does include a couple REITs
Yea I've avoided real estate for a long time, just never knew much about it! I do think it's a good thing to invest in if you can make it work but it's definitely not passive
Any good monthly dividend reits???
@@FreshKicks4545 yes, Stag Industrial, and Realty Income are both monthly dividend stocks.
Doing REITs now, studying up on Real Estate on the side/in my free time so I can invest in RE when I have more capital 😎😂 Your vids are so informative and aesthetically pleasing, thanks!! 😁
Thanks Horace! Real estate is definitely lucrative, I'm still learning as well, Vegas market is expensive at the moment
@@AndreiJikh Whenever I think about Vegas all I can think about is dollar signs and how expensive RE there would be... 😂😂
Nice break down between the 2 Andrei! REITs by far the easiest to get for sure. But as income grow diversify into Real Estate. Great Tips Stay Inspired Man!
Thank you! I agree, REITs have WAY less barrier of entry and require almost no work, I love that
@@AndreiJikh The feeling is mutual lol
With reits, from living in the UK, if you buy through an Isa, you can right off any gains if you invest less than 20k per year from April the 6th till April 5th which makes reits pretty attractive. Also you can learn how to pick the best companies to invest in and purchase those when it's a good time to get in and you can sell when a better opportunity presents itself and or if your current position gets over valued at a certain time period with no hassle to find buyers.
Better to diversify though if owning real estate is something that you particularly enjoy 😉
I wish my school and college professors explained like you do
REITS all day. Who wants to put up with lousy tenants, maintenance and repairs, market volatility, lawsuits, and all of the personal time needed to deal with all that. Your time is money. REITs give you more time with better returns.
Unless you have enough money to hire people to handle all of that. But that takes a lot of capital
many reputable REITs dropped 50-90% during the last recession, far greater volatility than physical real estate
Overall I like the concept of REIT's for the same reasons as Andrei. Buying rental property becomes your own business, definitely not a passive investment. I would like to invest some money in REIT's. Unfortunately many REIT's have hotels, shopping malls, and commercial office space. I expect poor performance in those sectors for the next few years.
Very solid video. Take $125,000 that you would buy a house with. Invest it into LTC for example at $44.24 with a $0.19 monthly dividend. By my math gives $6,441 a year not subtracting taxes. Take that same number and throw it into $SRET at $15.51 with a $0.10 monthly and you get $9,670.80 a year. REIT's make more sense over a long run if you are an investor and not a house flipper. That also assume you can get a house that cheap anywhere and flip it for more then you put in. REIT's also avoid managing a property, repairs after someone leaves the property, hell legal expenses in some cases and property taxes.
Real estate any day…real property can also be mortgaged for equity releases to acquire additional properties to expand wealth. I think the problem with REITs is since they distribute a huge chunk of their income to retain tax status, they have to continually raise capital from shareholders or seek debt to expand properties diluting shareholder value…maybe it is better to hold other kinds of dividend stocks.
Real estate for sure but any money coming in that you don’t have to work for is great. Absolutely great job at this andrei. Also outro is awesome
I bought a bunch of condos for cheap when the real estate market crashed. Now these units have doubled in value and positive cash flow monthly... Theres minimal maintenance, majority of issues the condo association takes care of... now reits NRZ,REML,MFA,TWO,GPMT are all bargains right now... The dividends have been reduced however this time next year you will get growth and a nice quarterly dividend. Easy money is the best money good luck
Great video. You didn’t have a bias and you directed us to real estate guys to learn from.
REITS are better for me because i dont have to deal with anyone just sit and earn !
Totally agree! I'm greedy with my time haha
Yup
@@AndreiJikh How do the numbers work out for overseas investors buying properties and leaving them empty for 3-5 years for appreciation
Dejan how is that going? Any tips? Any good monthly dividend payouts?
I am also a lover of all things Graham and Kevin *thumbs up*
I'm long on a few REITs :D I have about 45% of my portfolio in REIT. Loving it so far. No stress of property management, lol
Sal Baldovinos do you mind sharing what they are? I’ve been looking into a few hospitality reits especially now that they are heavily discounted assuming the economy and travel industry bounces back in a year or so
@@privatejr2702 O , SKT and a few others
This is actually so interesting to watch! I love love love the editing and formatting it makes it so easy to follow thank you so much
Thanks Jeremy :)
His content is defiantly created with love and dedication
Absolutely the GOAT comparison! I am lucky enough to be in a market that far outperforms REITS but MOST people should just stick to REITs for the simplicity.
Agreed! Where do you live?
I live in ALASKA! Institutional investors are too cold to get this bread at -40C
still cold
Man you really cover the whole investing course! and with magic tricks!
For me REITs are the goal .. I like them no Headaches just buy them and sleep and wait for dividends. No maintenance no deal with people who are late with there payment.. its a gold in a plater. I don’t know why people don’t invest to it
Other thing I don’t need to get into debt I can buy REITs whatever I can the cash no commitment
Thanks a lot 💙
Love it, I can agree 100%
Agreed
Great video bro! Real estate guy here. It really just boils down to the tax benefits, write offs, opportunity for building equity with the purchase/reno. You can leverage a house with the bank but you cant with a stock or REIT. Of the three types of income - passive, ordinary and active, you will pay more taxes on REITs vs Real estate. In summation, you will not pay any taxes really on real estate and you will on REITS. Its all a trade off. I just stack cash, look for an opportunity that gives the best ROI, then repeat.
You have to pay property taxes on real estate... Every year
@@breakitdownbarneystyle508 every month
@@halloween7275 Property taxes are collected by most counties twice per year. With an escrow account, the lender collects a prorated amount toward the annual tax and insurance bills every month preventing borrowers from getting socked with a big lump sum tax bill that is harder to pay. However, property taxes are an annual tax.
I heard if you put REITs in your Roth IRA it won't be taxed there so you get to enjoy compound interest on top of your high dividends in REITs even if you max out the 6k annual
You can leverage stocks, especially low-volatility ones, like VOO or SPY.
The highest potential is with real estate (in my opinion) simply because of the fact that you can leverage your money!
But REITs will truly produce passive income without any work involved.
REITs don’t pay true dividends, they pay cash redistribution’s which appear as dividends but are taxed very differently. Just wanted to point that out for those interested in purchasing REITs.
Thanks, good distinction to be aware of, I should have mentioned it
So hold them in tax advantaged accounts
Are you talking about Qualified vs. Unqualified dividends?
Solution...don't hold REITS in taxable accounts.
Could you explain more on the tax advantage and disadvantage please? Thanks.
With shopping centers closing left and right and e-commerce growth over these past months definitely looking for REITS in industrial sector I think Stag Industrial would be a good option
thanks for this tip just bought some shares wanted to invest in a reit with only industrial properties!
Like many others here, just commenting for the TH-cam algorithm. Love your videos and insights towards investing!
Thanks Wai! Appreciate it!
By the way, how about starting another channel for magic tricks tutorials??? Lol. Keep up the excellent work!
Love the outro!!
Personally I'd really love to own real estate properties as well as REITs, I've been informed of people making as much as $30,000 from these investments and If anyone could be lenient enough to share, I'd really love clue and tips on how to maximize profit.
My strategy is to start with Reits and then move to Real time real estate investing.
Focus on REITs
I began investing in REITs made enough profit in a year to buy rental units and parking lots and I'm still investing in Reits and my real estate properties which brings in roughly $480,000 annually, and I was able to generate this figures basically because I got in touch with an investment adviser/broker who guided me make the right investment decision.
@@thomasritchie384 Yes, investment coaches can be really helpful.
@@thomasritchie384 please who is the financial adviser that assist you with your investment and if you dont mind, how do i get in touch with your advisor?
Also:
- Real Estate = full time job
- REITs = completely passive, which means that your time can be invested in something else, like running a business and making way more money instead, for your time, which is what I do. Managing your own properties (if you were in Real Estate) is paid way less for your time than if you were invested in REITs and spending your free time way more productively. This principle is called "the cost of opportunity".
Gotta say....love that sound and visual for the outro. Watched the full minute and was really well done! Also, awesome video in general. This has been a major conversation the past few months while reflecting on the investment strategy.
Great video Andrei! Excited to add some REITs to my portfolio for the first time this October!
You summed it up pretty well at the end there. Each has its advantages. Reits are a truly passive investment, while real estate is basically investing meets side hustle. Real estate has much higher returns if you’re good at it, but it’s also a part time job so it obviously should. That part time job now far surpasses my $40,000 a year day job so it is definitely worth it, but does require a little bit of work and a lot of expertise as you mentioned or things can come crashing down in a heartbeat. Enjoy your content, best of luck in 2020.
interesting! From the UK here, new tax laws are considerably against property investors, for example you can no longer claim back mortgage interest as an expense and wear and tear allowance (unless in a company but mortgages are way more expensive this way). Whereas stocks and REITs etc can be held in a tax free ISA account, and you can contribute up to £20k per year with all the growth and dividends tax free. Say you bought a property and you net 10% ROI after costs on the cash you put in (which is about normal), if you earn over £50k that is taxed at 40%, so your net yield is actually 6%. If I could get 3-5% tax free annual yield on a REIT with none of the issues that come with being a landlord, that wins for me
10 Thumbs up on this one! Could not agree more!
Real estate gains rents and appreciation, and REITs gain only rents in the form of dividends distribution. Therefore, real estate does better but there is more work and responsibility involved
I would choose REITs over Real Estate because of the passiveness of it! Great video Andrei as always
That's my priority as well :)
Reits and dividend stock overall allows us to buy passive income
bgs stock?
@@TheProudSocialist whats that?
All RE is local and property returns largely depend on financing terms. REITs usually run 50% debt to equity whereas property is usually purchased with 20%, but changes over the course of the mortgage.
Andrei great channel. Reitz for now but in the long term, Real Estate for sure
Yeetz! 😂
Technically,, I can say that I own multiple properties if I own REITs 👍
Technically you absolutely can! I love saying it too hehe
Randy Ly Agreed. Same mindset here.
Randy Ly with none of the benefits of homeownership
and I'm a soldier on COD
Recent subscriber here. Really enjoy your videos and content. Keep it coming.
Appreciate it! I'll keep 'em coming :D
I have mortgage and equity REITs (mutifamily, private prisons, medical offices, assisted living and senior housing), a couple rental properties (with a management company), and also crowd funded equity REITs Fundrise (multifamily and commercial) and Rich Uncles (student housing). Tend to like outright ownership with rental properties but am not complaining about the REITs and eREITs either.
In my opinion the real difference is the work required for personal real estate investments. If you take into account the time it takes to learn your market, plus all the expertise required to buy, own and manage real estate - then assign a dollar value per hour for your time spent on that work, the returns may be much closer (alluding to efficient markets here). Since we normally just look at the total return without taking any of our own time and effort into account, it appears that buying real estate is the higher return. With REITS you are essentially paying for someone else's expertise along with substantially less risk than a single real estate investment. I do agree with Andrei's point that diversification into both is a good idea along with the broader stock market. Thank you for sharing
You are like my husband. Quiet allergic to debts. But you make so much sense. 😊
Love your videos Andrei, keep it up. Simple, fun and great learning for new people learning how to invest!
Thank you Jonathan! :D
very insightful and concise presentation great job
I do both to be honest. I buy a lot of REIT's but I also bought a condo as a investment property. REIT's are fire and forget for the most part. My condo requires me to keep up with my tenant, pay bills, deal with repairs and upgrades ect ect but its value is unparalleled with rent coming in my mortgage getting paid off and equity sky rocking further raising rents it is great. I should be able to pay off my first investment property in 5 years and then it will cash flow over 1300 dollars a month after my taxes, insurance and hoa payment come out. That is one hell of a return on a $118,000 dollar property. Plus I save money by owning my house because I live here right now and it is cheaper to own than it is to rent in salt lake city and with my roommates I live pretty much for free.
That's an amazing return for sure! I need to find something like that here in Vegas!
So much great information jammed packed into one video💪
Great vid...REITS are dividend titans and are a massive boost to a stock portfolio. It is about preference. I am in a passive position regarding real estate. I don’t have the interest to deal with property.
I do both. But if you have little money get into REITS until you can get into a real estate deal.
Top notch content keep going on providing us with your best thank you !!!
next vid REITs VS Mutual Funds VS crowdfunding real estate would be a-w-e-s-o-m-e!
REITs right now.. own 4 units plus my own house.. but I work full time also so it's hard to manage the properties especially since I just had a kid as well.. I'm putting most of my extra cash flow from my rentals into REITs
I’ve never seen anyone do it better
At Amica, we know that what happens to your home also happens to you.
Song at the end was on point 👌🏽
One important factor you forgot is price volatility (principal risk) - over the last week some mortgage REITs actually went under due to margin calls. Equity REITs were less volatile, but still dropped enough to wipe out years of dividends. Physical RE is less volatile, but also less liquid. There are clearly trade offs in all these classes. Research and understand the risks in whatever category you are interested in before investing.
Yes REITs dropped to possibly wipe out years of dividends (although making a good buying opp), RE lags the market and also seeing the same issue with the dividends... many aren't paying their rent right now. Also, RE values lag behind the market. RE values are pretty much untouched today, buy will drop in the next year or two.
Your channel is growing at an awesome rate and your videos are helping me a lot, thanks Andrei! Cheers from Mexico
Thanks Jam! Hello back from Vegas :)
I firmly believe real estate performs better, but REITS are lazier and far easier to invest in.
If you are good with real estate and have a passion for it, you can make so much more money.
I do not have the passion, but may try my hand at it someday.
For now, REITS are my real estate vehicle.
Awesome video Andrei! Thank you for the info!
If your into that I would say reits simply because they are easy to get (no credit check). And reits cost WAY less than real estate and my personal favorite REITS don't create debt.
You are my inspiration Andrei!! Wanna get to the position you are at, You’ve been so helpful in everything
Well said, thanks for sharing your analysis!
Thanks Charles! :)
Waiting for correction in market prior to a foray into REITs. VNQ via tax free and tax deferred accounts. Realty Income (O) also. CBRE in taxable, no dividends. Making these moves ONLY after big market correction downward. Then DCA in. Starting training to get RE agents license soon to learn more. Just my two cents to this vid. Best wishes.
Great content!
"If you don't smash that like button, I won't live in a reit". - Andrei
lmao i felt that, youtube is a hard life to live
Haha well...technically.. I can't live in a REIT anyway but... you know what I mean 😅
😂🤣
@@AndreiJikh No exactly, ik, that was the funniest part. I love the humor!! Keep it up dood
That's a pretty strong case for REITs, probably the strongest I've seen.
Makes me want to put my money in some REITS until I have enough to invest in Airbnb honestly. I've seen the strongest returns there for the least amount of wedge work.
REITs! 👍🏻 And once again, the way you create your videos is really really good! Much appreciate you effort! Great stuff! Greeting from Melbourne
Thanks Michael! I'm a REIT guy as well. Hello back from Vegas! I'll have to visit Melbourne someday, looks really cool
Both are good. I’m an assistant manager at an apartment complex now and I do all the dirty work, evictions etc and I don’t own the building. I might as well get a rental property and do all this hard work for something I own as well. I’m already doing for someone elses asset anyways.
Real estate is a great investment but it has lot of down side including property value, maintenance and managing property
A lot more time commitment for sure! I wouldn't say real estate is for everyone but REITs really do compete with real estate in a lot of other ways
Yes and can end up costing lots of money and time for the average investor
What is the best reit in canada
Solid Louis CK impression... of course REITs, but maybe...
I’m the impersonation of the monopoly man got you a follow lol