Stocks vs Real Estate

[Russell Brazil]

So I put one of my rental properties under contract to sell today. I calculated these numbers last night...and actually when we put it under contract, we had a last minute bump in price by $10k that pushed the IRR up to 25.72% from the 25.49% shown in the graphic and for the calculations. This is a pretty good estimate, and not exact.

I was curious to see where this would land against stocks, as stocks have obviously been on fire the last few years.

Ultimately though this property returned an IRR of 25.72% versus the S&P 500 with dividends reinvested at 15.31%. Both, extremely good returns and nothing to sneeze at, but that extra 10% per year, over the course of 5.5 years lead to a lot more money.

This property originally had about $90,000 invested into it. $83,000 down payment and $7,000 closing costs.

Original investment $90,000

Real Estate IRR Profit $221,981 - Profit plus original investment $311,981

Stocks IRR Profit $102,447 - Profit plus original investment $192,447

This property gave me an extra $119,534 versus what the S&P returned.