Been a Property Investor. Thinking about investing in STOCKS.

Been a Property Investor. Thinking about investing in STOCKS.

Member since 2023 · 13 posts · 3 votes

Copying and pasting here  the message I sent to David Greene . Hoping to get some thoughts/ideas here that would help me resolve my dilemma on how/where to invest the $300k cash we have  - Whether to buy a 2 bedroom  property in UK at £200k ($244k), with monthly rent of £1200 ($1470) .  I can't get a mortgage, so I need to pay it in cash. OR should I invest in STOCKS.  
Here's more details of my situation/dilemma

I've investing in properties since 2000. I am American who has been living in UK since 1999 because I have a good job working at U.S. Military base here.

I own 9 rental properties here in UK and in 2021 and 2022, I bought 2 properties  in Florida.

I have dilemma right now and am hoping you can give me your thoughts on it.

I have about 300k cash in my bank account. I don't want to buy a property in the States at the moment.

I want to buy another one here in UK where I leave because I get a good/guaranteed rental income with U.S. military members being stationed here. The U.S. military base pays for their housing here.

And there's less rental expenses here because it is the tenant who pays the property tax here, insurance is $200-$250/year, and the labor cost (to hire a plumber, handyman, builder, etc.) is much cheaper than in the States.

Recently I talked to someone who owned 14 rental properties and she decided to sell all properties back in 2014 because she doesn't want to deal with all the time/effort of managing them. She has been investing in stocks then and doing well.

So this got me thinking, may be I should start investing in stocks. I have a few mutual funds (not much, may be a total of $30k) and 403B plan with my work and have about 530k invested in growth funds.

Back to the 300k that we have at the moment. I got an offer accepted on a 2 bedroom property in UK for £200k ($244,000) . We'll get a rent of £1200 ($1470)/month. I'd buy this property but if we get a mortgage with the high interest, we won't make any income and we'll paying expenses out of pocket.  But even, if we want to  mortgage the property, I can't get a mortgage right now because of my credit score here in UK being adversely affected from £245( $300)utility bill that went into default. This does not affect my U.S. credit score, which is excellent. 

My question is, should I buy this £200k ($244k) 2 bedroom house, that would rent for £1200 ($1470)/month and use up most of my cash OR should I just invest in stocks over a period of 6 months (buying carefully selected stocks using dollar -cost averaging). OR should I just invest in stocks. I already started doing my reading and search on it and have someone I trust who has been investing in stocks for over 20 years now and is doing well.

Hope to get co-investors thoughts on these before making a decision... which is today or at the latest tomorrow

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Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
3y

I would buy first trust deeds currently paying 9%. Steady income secured by real estate. 

See this reply in the discussion

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  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
    3y

    It depends on how long you want to stay in the stock market and your comfort level with volatility.  What are your options in other countries in the EU to cashflow that would not use all your cash? Italy, Greece etc... 

  • Member since 2023 · 13 posts · 3 votes
    3y

    I intend to buy and hold. I am venturing in stocks from this point on. I have enough passive income from our 12 rental properties (including the one in the Philippines), so I will be investing stocks moving forward. But at the same time, I know this £200k ($244) 2 bedroom property is a good buy.  I don't know if it's just worth it to tie up the $244k, if I can make more returns in stocks in 20 years time. In 20 years this 200k property (UK property appreciation is not as fast as in the States) may be 400k worth then. I know I'm still getting monthly rent and rent appreciates too. But so do stocks. 

  • Adrian StamerPro Member
    Real Estate Investor & Agent · Richmond, VA · Member since 2013 · 319 posts · 167 votes
    3y

    Diversify, do both 

  • Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
    3y

    I would buy first trust deeds currently paying 9%. Steady income secured by real estate. 

  • Member since 2023 · 13 posts · 3 votes
    3y
    Quote from @Adrian Stamer:

    Diversify, do both 


     Yes, I agree.  We are already  heavily invested on properties with the 12 we own, plus the one we live in. We own a little bit of mutual funds and 403B plan (like 401K) through my employer. But we don't own stocks, so I'm thinking, we should start investing and start with this 207k cash we have; but we won't buy as one time purchase but buy over a period of  6 months (following dollar-cost averaging). I just hate to give up on this £200k property cuz I know we are getting it at slightly below market price because we are paying in cash. So before I give up this property, I just need to know that I'm giving it up for a better investment that would give a better/higher return. 

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    3y
    Quote from @ButchLisa Wofford:

    I intend to buy and hold. I am venturing in stocks from this point on. I have enough passive income from our 12 rental properties (including the one in the Philippines), so I will be investing stocks moving forward. But at the same time, I know this £200k ($244) 2 bedroom property is a good buy.  

    Tax benfits to owning UK RE? Are the RE tax benefits like depreciation and no self-employment in the UK similar to the US?  That needs to be a factor.

    Looks like this property is completely dependent on the base.  Ever see the affect on rents and RE values when we pull out or reduce force in one? Immediate and devastating.  Factor in all-in one basket and the livelihood of that basket being decided by suits and silver hair in Washington.  

    $1200 rents on $200k to me is a yawn.  Unless I had significant equity going in, I'd be earning my 5+% effort and risk-free in HYSAs.  At least until the stock market loses some froth or I had a much closer to 1%/mo gross - $2k+ rents per $244k. 

    And why message David Greene on this?  He reference buying in the UK?  

  • Investor · Hoboken, NJ · Member since 2022 · 50 posts · 19 votes
    2y

    Hi there - It will depend on your goals for the funds and the profitability of the real estate deal. The stock market can be a lot more passive than owning a rental property, so if the numbers aren't great on the deal, investing in stocks or taking advantage of the high rate environment could make more sense. 

  • Chris BlackburnPro Member
    Developer · Salem, OR · Member since 2014 · 193 posts · 111 votes
    2y

    NFA, (Not financial Advice). But this is what/who I have been following.  Pretty simple, not very diversified, if you want more security, just put it in an index fund (good luck outperforming inflation).   The person I have a lot of respect for is a taking youtube head. James with Invest Answers.  He has a patreon.  He is essentially all in on Telsa, BTC (Bitcoin), Solana.   He is retired from the financial world and I like his process (Does not work for most people).   I do believe technology is the only thing that can move faster than inflation.  (Commodities and RE just keep up with it, if you are not raising rents 6%+ every year, there is an argument that your spending power is going down every year.   I have a 4 legged stool, not excited about our government spending.   BTC as an option gives a lot more freedom from the chains of fiat currency than most other options.  

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