Should I buy an investment property or invest in ETFs?

Investing in Real Estate

• The OP's situation involves owning multiple properties and managing tenants with various backgrounds, highlighting the challenges of dealing with rental properties.
• It's emphasized that the return on investment in rental properties can be heavily impacted by tenant behavior.
• Dealing with non-paying tenants, potential legal matters, and property upkeep are common challenges faced by landlords.
• The tenancy agreement laws may favor tenants, making it difficult for owners to take action against non-paying tenants.
• Wear and tear costs, potential unpaid utility bills, and the time and money required to handle tenant issues are additional challenges to consider.
• Background checks, strict deposit requirements, and neighborhood communication are suggested strategies for managing tenants effectively.
• Pros: Potential for steady rental income, property appreciation over time, diversification of investment portfolio, possible tax benefits.
• Cons: High initial costs, ongoing maintenance expenses, legal issues with tenants, potential income loss during vacancies.

Investing in ETFs

• ETFs are recommended for passive investing and are seen as a way to avoid the challenges of being a landlord.
• They are viewed as a lower maintenance option compared to owning rental properties.
• Pros: Diversified portfolio, relatively passive investment strategy, potential for long-term growth.
• Cons: Market volatility, lack of control over individual investments, no tangible property ownership.

General Advice and Considerations

• The decision to invest in real estate or ETFs should consider personal preferences, financial situation, risk tolerance, and long-term goals.
• Emotional factors, lifestyle considerations, and future plans should also guide the decision-making process.
• It's important to weigh the financial benefits, risks, and responsibilities associated with each investment option.
• Real estate investments can provide stability, a sense of ownership, and potential for rental income, but they come with various challenges and requirements.
• ETFs offer diversification, ease of management, and potential for long-term growth but lack the tangible benefits of property ownership.

In conclusion, the decision between investing in an investment property or ETFs depends on individual circumstances, financial goals, risk tolerance, and long-term plans. It's crucial to conduct thorough research, consider all factors, and align the investment choice with personal preferences and objectives.