Replies to post #14570 on A.I.M. Users Bulletin Board (AIMUSERS)

[aptus]

Hello Jack,

My sense is that certain investment vehicles are not right for some people.

I know what you're saying. I know a few people who shouldn't be in the stock market because they worry about it too much.

With Real Estate I'm a bit more comfortable with it than most people because both my parents were realtors and I grew up in that environment since I was nine years old.

However I also like the liquidity of stocks so it doesn't hurt to diversify across different investment vehicles.

Long ago I remember someone saying that if you want to invest in real estate you should aim to buy 5 homes, over the years, that each rent for the equivalent of 1/5th of the average annual salary.

Eventually, say over 25 years, they'll be paid off (mostly by the renters) and you'll have 5 clear-title houses that give you cash flow equal to the average annual salary (regardless of what inflation does). So not only will you have equity built up, but you'll also have a steady stream of cash flowing into your pockets when you're ready to retire.

I always thought that was a good plan (of course you have the hassles of renting and maintenance if you don't go with a property management firm).

I assume your friend it quite busy. Even the handymen over here are very busy -- to say nothing about the builders. We had 4 different builders come over (each for a couple of hours), look at the house plans and then leave with the intention of providing an estimate only to call and say they couldn't do the work because they were too busy (I still don't know how they didn't know this before spending 2 hours with us).

We're currently on our 5th builder who promises an estimate next week (so there's still hope :-)

[AIMster]

For me, real estate investing would take a lot of effort, especially that I am not known for being very 'handy' around the house.

Hi, Jack,

Like you I'm repair-skill challenged. <g>. So for me the best way to do real estate without taking the physical properties have been REITs. EOP and EQR are among the bigger players in Office and Residential properties, respectively. Dividend yields are 7.16% and 5.1% respectively. Not in the stratopshere, maybe, but certainly repectible compared to bank CD's right now. There are others, of course, but I find AIMing these guys to be a lot less hassle with a decent dividend to keep it going along in the meantime.

Best,

AIMster