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Updated almost 14 years ago, 03/08/2011
What has more risk? RE Investment or New Car Purchase?
After reading a post on hear about "Do you tell your friends you invest in RE", I remember a comment someone made to me concerning RE investing a few years back.
This person found out I purchased a home as a buy and hold for rental income and made the comment, "Thats just too risky". Meanwhile this same person just purchased a new car at 42K.
Granted RE does have its risks, especially if you were caught up purchasing in overvalued markets the past few years. But what has more risk, purchasing a vehicle at 42K costing you $700/month for the next 5 or 6 years or purchasing a rental unit with 42K down netting you $400 month positive cashflow after expenses, plus the possibility of appreciation?
Granted your risks are limited with the car purchase, where the RE purchase has the potential of unlimited risks, but over the long haul I'm betting on the RE investment as a low risk investment.