So be sure to use the correct Rental type (Single Family Residence) for comparison.  

The potential for returns in our market and indeed the cash on cash I have achieved in my portfolio suggests that REI can have more upside; albeit, I am not a passive investor so this is not an apples to apples comparison. 

It is too costly to renovate and move the structure in comparison to a new build on site.My plan is now to buy land in northern MI, where I've done market research on short-term rentals, and build an A-frame vacation home.

@Lucas Miller I loved your comparison of buying an 800k apt complex myself vs investing in a syndication.

There is no comparison between an apartment and a house when it comes to the amount of physical work and costs.I've been in real estate 55+ years and I love dealing with tenants both good and bad.

Below is a comparison of property tax and insurance costs for three states that do not have a personal state income tax.

Since mortgage interest rates compound on a daily computation, your actual basis for comparison is actually between 5.5-5.6%, which most real estate investments will outperform (you make money in 3 ways from real estate: appreciation, depreciation on a 30 year schedule, and cash flows).

This is not appropriate comparison.

Regarding my time, I conservatively estimate about 60 hours per year spent on the home, and value my time at $150/hr (what I can make spending my time elsewhere).Here's my financials spreadsheet I maintain for this property:Costs/Expenses/Equity ContributionsAnnual ExpensesTaxes3700Insurance1000Maintenance/Repairs2500Interest Expense (3.875% rate at current loan balance of $168k)6510Total Costs13710Rental Income21000Net Income7290Annual Appreciation (assuming 4%)12000Net Gain Including Annual Appreciation19290Annual Time spent on home -maintenance, finding tenants, dealing with city, etc. (60 hours x $150/hr)-9000Net Gain Less Value of Time10290Equity in Home (Approximate market value of $350k less loan balance of $162k less realtor selling fees of $15k, less seller's side transfer tax of $7k166,000ROI Analysis - Includes Opportunity Cost of Selling HomeNet Gain compared to Equity in Home11.62%Apples-to-apples comparison with passive investment (factoring in value of my time above)6.20%

the difference is a world apart with proper A class tenants and C D section 8.. no comparison..