🏠 Should I invest my savings in rental property or index funds?
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You've hit a major milestone: $60k in savings. Now you're wondering if you should keep funneling it into index funds like VOO and VTI, or use it as a down payment on a rental property. Let's compare the wealth-building potential of both paths over time.
🏡 Property & Mortgage Details
Let's look at buying a rental property. Your $60k savings will serve as the down payment. We'll estimate the property value you can afford and the resulting mortgage.
Monthly Mortgage (P&I)
Monthly Mortgage Total
🔑 Rent Scenario
A rental property generates monthly income but also comes with expenses like management, maintenance, and vacancies. We'll project your cash flow and property appreciation.
📈 Index Fund Scenario
Alternatively, you could invest your $60k directly into a diversified portfolio of index funds (like VOO, VTI, VXUS). This is the 'set it and forget it' approach.
💭 Food for Thought
Real estate isn't just an investment; it's a part-time job. Dealing with tenants, maintenance, and accounting takes time. Here's what your 'hourly wage' looks like for that extra effort compared to passive index funds.
Landlording Hourly Pay
With real estate, your tenants pay down your mortgage over time, building your equity. Here is how your ownership stake grows.
Current Ownership %
Current Ownership Value
Future Ownership %
Future Ownership Value
See Also
📊 Results
Real Estate: Monthly Cash Flow
Real Estate: Total Value
Index Funds: Total Value
Net Advantage of Real Estate
Calculator updated by heyfinfam (v26.8.0) · View history
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