Why take the risk? Florida.

[John Peter]

I just moved 460k into an account with 4.75 % interest. It will provide over $2k a month of income, risk free until I decide what to do with the cash. For the past year, I had been looking to invest in multi families somewhere around Tampa area. After factoring in the insurance nonsense, skyrocketing taxes and double digit increases in utilities and I'd be lucky to cash flow a couple of hundred a door. That's IF nothing needs maintenance or repair. So, my question to you more seasoned investors is.. when you can park your cash in a CD or high yield savings at 5.5%, why bother taking the risk, especially in Florida? Any ideas that I'm not considering?

[Jorge Vazquez]

Firstly, kudos on that fantastic interest rate – it's like having a super-charged bank account! Now, comparing that to Tampa real estate:

1. Consistent vs. Potential Growth: Your bank account offers steady growth, while real estate can potentially appreciate, giving you a nice bump in value.
2. Safety vs. Leverage: While your bank account is pretty much risk-free, real estate allows you to leverage, which can magnify your returns.
3. Steady Returns vs. Tax Benefits: The interest is a guaranteed income, but real estate provides tax deductions that can be quite advantageous.
4. Hands-off vs. Control: Your bank account needs no managing, while real estate gives you more direct control, letting you influence outcomes.
5. Intangibility vs. Tangibility: Money in the bank is digital, whereas real estate is a physical asset you can see and touch.
6. Stable Income vs. Passive Income: Interest is consistent, but properties, even with their ups and downs, can offer a long-term passive income stream.