Why I Prefer Treasury ETFs over Real Estate Investment


*If this is your first time here, read this.

 

Yes, rental properties can provide monthly cashflow and potential capital gains if you are able to sell for a higher price in the future. Even in a bad market, you still can stay in that property for free. Seems like the perfect asset to invest in!

 

But there are many hidden costs that first time property owners do not realize.

  1. If you own the wrong property at the wrong time, it becomes a liability.

It’s not a guarantee that property prices will keep rising and in a down market, it is a drag because a bulk of your wealth is trapped in the property.

 

  1. It’s harder to sell quickly when you need cash compared to ETF/stock.

Unlike the stock market where you can sell your shares within minutes, selling a house takes a few weeks, if not a few months.

 

  1. Sign the wrong tenant, you’ve got headaches and losses waiting for you.

Whether it’s damages, late payments or property maintenance issues, we have all heard of horror stories.

 

  1. And not to forget all sorts of costs from maintenance to insurance to property taxes that takes a cut out of your money.

As the saying goes, only taxes and death is certain in life.

 

This is not to say no one should buy real estate. What doesn’t work out for me, might work out for you depending on your circumstances.

 

As with any kind of investments, make sure you have done all the requisite to find out the hidden costs before committing yourself to a financial investment.

 

Disclaimer:

Investing decisions are personal. Depending on your personal circumstances and preference, what works for others might not work for you. Be responsible for your own investments. Always invest according to your own needs and preference.