My First Little Duplex vs.
The Stock Market
"Never let your failures go to your heart or your successes go to your head" - Soichiro Honda
I was wondering how my very first little real estate investment compared with the stock market
so I crunched the numbers. and here they are.
- 131 Spring St Albany NY. A very simple duplex purchased for about $41,500 around 1986
- Cash invested for down payment and closing costs about $2350
- Other monies were invested for repairs but monthly rent collected paid for those repairs.
- Today's estimated value per Zillow: $119,000
Seeing as I bought it 30 years ago, the loan would be paid off now and similar apartments on
Craigslist rent for about $675 per unit.
So if I still lived there, I would be living for free, have an asset worth about $119,000 and be collecting
about $675 a month in rent from the other unit.
$2350 Invested in the Stock Market:
- Using a Dow Jones Industrial Average Calculator...$2350 invested in the stock market in 1986 with all dividends reinvested would give a return of 2078.672%.
- Using that rate of return my initial investment of $2350 would be worth $48,833 (instead of $119,000).
- If my stocks were worth $48,833 I would have to get 16.5% in dividends to equal the same income I would get on my little duplex from renting just one unit. Many professionals say that stocks with dividends over 8-10% are risky.
Albany NY is not an expensive city...today I live in Los Angeles. But if I did live in Albany I would be living for free and collecting rent. By now I would have purchased a number of other rentals to increase my cash flow as property is very reasonable there. Here in Los Angeles we get a much larger cash flow on apartments so you don't need as many units to generate a nice income for retirement.
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