Korean Job Discussion Forums

[Bryan]

[Thunndarr]

There are times when it makes more financial sense to invest in stocks, and times when it makes more financial sense to invest in real estate.

The way I look at it is this...Let's say I've got a spare 500 dollars/month and $15,000 in the bank living my current lifestyle. I can invest that $15,000 won in the stock market and get maybe 10% every year and use my extra $500/month to rent an apartment.

OR, I put that $15,000 won down on a house and the $500/month into house payments. If the house goes up by 4-5% a year I'll have done better (with raw numbers) than having my money in the stock market due to leverage. (I haven't calculated all the additional expenses, so obviously the numbers aren't completely cut and dry. In any case, it is POSSIBLE, that having a house, in this case, is financially a better solution.)

Now, for a real life example. Earlier this year, I decided to purchase a house in the U.S. to rent out so I sold all my stock (well before the crash, thank god!) I got a relatively modern house in a slightly rural area for $30,000 which I paid for without any financing. I am currently renting it out for $600/month or $7200/year. Not a bad ROI on that property at all.

(Clearly, this is not a normal scenario, and I looked long and hard before I found a combination of conditions like this before I decided to invest there.)

In any case, in this situation, I believe investing in real estate, even with all the headaches involved (and there are quite a few) is still worthwhile.

[friendoken]

[Bryan]