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Ask Dave

Which Makes More Money?

What are Dave's 2 big ifs when it comes to making good money in real estate investing?

QUESTION: Dan is maxing out his investments, and wants to get into real estate investing. Where could he make the most money? Dave knows that real estate investing is the more lucrative, but it involves 2 big “ifs” and a lot of work.

ANSWER: In real estate rental, if you manage it well and you buy it right, which can be a couple of very big “ifs”, your rate of return should be well in excess of what you’d make on a mutual fund. However, you’ve also got your hassle and effort involved. If you average 12% on a mutual fund, you should average 15% to 25% on a rental, all things included.

To get a good deal in real estate, you have to have patience and know the market. You can find good deals through realtors. When I’m buying investment property, I never pay more than 80 cents on the dollar for it. If I’m going to, I just don’t buy it because I’m looking for a deal. In real estate, money is made at the buy. Take your time, be out of debt and have an emergency fund in place. Keep lots of cash around.