Should I sell my apartment and invest the profit in stocks?

[DGI]

Hi guys! I have a dilemma I would like your opinion on. I currently own a small three bed room apartment in a European city which I currently live in and bought in 2010. I bought it for 300 000 $ and can now sell it for at least 500 000 $. The market in my city has gone through the roof the last years, and I find the prices for these small apartments ridiciluosly high. I am considering selling my apartment and renting instead. The reason is I want to to invest my profits from the apartment in my stock portfolio, which consists of dividend growth stocks. By doing this I would be able to build a substantial portfolio which will, by compound interest, almost guarantee to make me financially independent in 15-20 years(I am currently 32 years old). The cons are that I will be paying some landlord about 15 000$ a year instead of paying down my own mortgage (home ownership is extremely usual in my country, above 80% own their own home), and that I might have to buy into the market at a later stage at a much higher price. What would you do if you were in my shoes? Anyone who has done something similar? I would appreciate any input.

 

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[Guest34764]

Sell the apartment, move and find a cheap residence (preferably rent), and build a business.

 

[arfadugus]

You should probably read "The Millionaire Fastlane"

Your idea is Slowlane.

Seriously read the book or I don't even know why you are here.

 

[Michael Clark]

How would we know if you should sell or keep your house? I wouldn't gamble it on stocks, but neither would I sell it if i enjoyed living there and didn't desperately need the $200K.

Your home is important, probably too important a decision to leave to us strangers here on the forums - we don't know your full situation.

 

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[devine]

Here comes reframing:

Hi guys! I have a dilemma I would like your opinion on. I currently own a small three bed room apartment in a European city which I currently live in and bought in 2010. I bought it for 300 000 $ and can now sell it for at least 500 000 $.

And earn $200k without doing anything.

The market in my city has gone through the roof the last years, and I find the prices for these small apartments ridiciluosly high. I am considering selling my apartment and renting instead. The cons are that I will be paying some landlord about 15 000$ a year instead of paying down my own mortgage.

Right time to earn $200k and move to another city.

The reason is I want to to invest my profits from the apartment in my stock portfolio, which consists of dividend growth stocks. By doing this I would be able to build a substantial portfolio which will, by compound interest, almost guarantee to make me financially independent in 15-20 years(I am currently 32 years old).

Slowlane/10.
You're 32 years old, you will create multiple streams of income and will retire before you turn 40.

Home ownership is extremely usual in my country, above 80% own their own home. I might have to buy into the market at a later stage at a much higher price.

Home ownership is extremely overrated. Paying insane numbers to live inside 4 walls under a 3m. ceiling is a questionable luxury.

What would you do if you were in my shoes? Anyone who has done something similar? I would appreciate any input.

I did exactly that. I invested in my education (not formal form of) and created multiple streams of income over the past 4 years. I will retire before I turn 26.

You have one life. Do you think you have another 15-20 years to waste on waiting? Do you think that 4 walls and 3m ceiling is the most precious asset you have in life?

 

[OddJack]

I have been thinking about doing this for sometime, and probably will do it. But not for stocks.

I agree with the guy who said your idea is slowlane. But it's better than sitting in a 3 bed condo.

My ideas is buying a franchise that has enough space for me to live in. Do it couple of years and save. Then expand. To me this is better than stock. This way your money is working rather than simpluy slowly appreciating. Less risk. Still slowlane tho, but better than sitting.

 

[Mikkel]

I believe the average amount of money you need to be able to live off dividend stocks is about $3,000,000.

Risking your money on stocks, which you probably know very little about is quite risky and probably not worth it.

Mark Cuban has been known for saying that if you win the lottery, don't invest in stocks... you didn't become rich by investing stocks, so you will most likely lose the game.

Of course, if you know what you are doing, by all means.

If you don't know how the stock market works, like very well. Then I suggest not to.

 

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[AgainstAllOdds]

It all depends on the market.

Why not move out of your house into something cheaper while renting out your house?

That way you can take the cash difference and invest it risk-free into building a business. Entrepreneurship is a lot better bet than "dividend stocks". Start by reading the book (The Millionaire Fastlane).

 

[RHL]

Why not move out of you house into something cheaper while renting out your house?

When the student is ready, the teacher will appear.

 

[DGI]

Thanks for the input! I understand that Divididend growth stocks are considered to be the slowlane to wealth, but by having my cash in a portfolio the money is much more available if I get another business opportunity than if it is locked in an apartment. The stock market has on average gained 10% the last 100 years. I think I will be nowhere near that yield on my apartment. I don't know anybody that has become rich just by owning their own apartment. With investing in quality businesses I will put my money to work and have a income stream of dividends and share growth that will compound year after year. I see a much higher risk in owning a (probably) overpriced apartment than owning a piece of some of the worlds best companies.

 

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[Mikkel]

I see a much higher risk in owning a (probably) overpriced apartment than owning a piece of some of the worlds best companies.

You're not wrong. Owning a house can just as liking fall in price as stocks do. Unless you really like this house, I think it is a good idea to sell and move to an area that is less expensive. You can buy a new house/ rent(if you so prefer) and start a business with the left over money.

The problem I have with the stock market right now is that, at least in America, the stock market is due for another crash. Typically every 10 - 15 years, on average, the stock market crashes. With time, the prices will bounce back higher than before. Unfortunately, if you have all your money tied up in a stock that has crashed, then you don't want to pull out that money and therefore will have no money for your business.

In my opinion, wait for the stock market to crash. Whether it be in Europe or in the USA. It's bound to happen. Buy on the low and sell at the high sounds quite obvious... but not to many people, apparently.

In that time that you are waiting, if you want to start a business you will have the capital to do so. If you don't need all that money for your start up, then when the time comes that the stock market crashes well, you have some extra cash sitting around. Buy up a lot of those CHEAP stocks that you THINK you know will bounce back.

Sure, stocks are not Fastlane, you have to spend your time waiting for the right moment to strike. However, if you happen to have a good amount of money left over from your business and the market just happened to be tanking at the time, I say that you could make a good amount of money through your stocks.

However, a successful business will do you much better in the long term if you execute accordingly.

 

[Phones]

Is that house fully paid?

15.000$ rent for a 500.000$ apartment, 3% / year, sounds really really low.

I would sell it, place 200.000$ in P2P loans at 10% rate, that would fund your rent and help with expenses.

300.000$ left. Stash it.

Build a business (without touching the 300.000$)

 

[DGI]

As I said earlier almost all my friends own their own apartment but none of them are no where near financial freedom or being rich. Their apartments may rise in value, but they don't see any of this increase in value, its just paper profits until you sell the apartment. I remember that Robert Kiyosaki wrote in Rich Dad Poor Dad that your house is not an asset but a liability (the exception being houses you rent out and get cash flow in each month). I feel that to get different results I have to things differently than most people, which means realizing the profit on this apartment and placing the profit in assets that will work for me 24/7.

 

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[BellaPippin]

How about one of these

https://www.thefastlaneforum.com/community/threads/live-rent-free-in-multiple-countries.59964/

https://www.thefastlaneforum.com/community/threads/stop-paying-rent-live-for-free.51893/

 

[Torobaro]

Hi guys! I have a dilemma I would like your opinion on. I currently own a small three bed room apartment in a European city which I currently live in and bought in 2010. I bought it for 300 000 $ and can now sell it for at least 500 000 $. The market in my city has gone through the roof the last years, and I find the prices for these small apartments ridiciluosly high. I am considering selling my apartment and renting instead. The reason is I want to to invest my profits from the apartment in my stock portfolio, which consists of dividend growth stocks. By doing this I would be able to build a substantial portfolio which will, by compound interest, almost guarantee to make me financially independent in 15-20 years(I am currently 32 years old). The cons are that I will be paying some landlord about 15 000$ a year instead of paying down my own mortgage (home ownership is extremely usual in my country, above 80% own their own home), and that I might have to buy into the market at a later stage at a much higher price. What would you do if you were in my shoes? Anyone who has done something similar? I would appreciate any input.

In my view you just have to ask yourself, where do I want to be in 3-5 years?

If you want to be financially independent it makes no sense to invest in stocks. The only thing that makes senses is to go all in and start a business.

But if you are happy with your current job and how your life is unwinding then it is wise to invest in stocks and carry on as you are

 

[DGI]

In my view you just have to ask yourself, where do I want to be in 3-5 years?

If you want to be financially independent it makes no sense to invest in stocks. The only thing that makes senses is to go all in and start a business.

But if you are happy with your current job and how your life is unwinding then it is wise to invest in stocks and carry on as you are

That's actually it, I am not happy with where I am, but I feel by living in my apartment I will be doing what everybody else does. And they are not where I want to be. So even though maybe a business would be the fastest way to FI, I see selling the apartment and investing as the second best alternative.

 

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[zeitgeist]

The people who are suggesting he doesn't invest in stocks - How many of you actually run fastlane businesses that are successful?

 

[ChrisKyle]

Why not sell, and invest in another apartment complex... It seems like it worked the first time..

 

[DGI]

Found this link in another thread on the forum where Grant Cardone discusses this.

 

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[DGI]

Time for an update! I have decided to sell my apartment and it will be on the market in january. Can't wait to realize the profits and put the money to work. Once I have the profits I will be able to invest them in stocks, buy an apartment and rent it out (with zero money down) and pursue other business opportunities which I could not have done if the profits were locked in my apartment.

 

[21elnegocio]

Hi guys! I have a dilemma I would like your opinion on. I currently own a small three bed room apartment in a European city which I currently live in and bought in 2010. I bought it for 300 000 $ and can now sell it for at least 500 000 $. The market in my city has gone through the roof the last years, and I find the prices for these small apartments ridiciluosly high. I am considering selling my apartment and renting instead. The reason is I want to to invest my profits from the apartment in my stock portfolio, which consists of dividend growth stocks. By doing this I would be able to build a substantial portfolio which will, by compound interest, almost guarantee to make me financially independent in 15-20 years(I am currently 32 years old). The cons are that I will be paying some landlord about 15 000$ a year instead of paying down my own mortgage (home ownership is extremely usual in my country, above 80% own their own home), and that I might have to buy into the market at a later stage at a much higher price. What would you do if you were in my shoes? Anyone who has done something similar? I would appreciate any input.

Sell it, rent, then find local real estate investors that come across real estate deals. Remember this it is very important that you do not buy anything on the market at market price. Try finding off market units, they usually need some work and have equity. This way you already profit on the purchase. Be careful of those real estate investors, many are sharks and want to re-sell you off market units with their profit on it. Just run the numbers and make sure after repairs you still have profit. Buy 2-3 with that $200,000 that you will get and leverage it. Make sure you cashflow as well, I like multi units (Triplex & Fourplex) you usually cashflow the most out of these units.

Ex.

Buy a Triplex: $80,000
Market Value Is: $140,000

Get a hard money loan, banks usually dont lend you money for these units that need repair.
Hard money loan usually ask you for 15%-25% for a down payment.
Rates are high on these loans and are all interest (DONT LET THIS SCARE YOU)
The goal is to get a 2-5 year loan with them and try to pay it off, if you cant pay it off within those 2-5 years those same lenders give you the opportunity to refinance (With a fee of coarse) and have another 2-5 year loan. Or if you can refinance with a regular bank loan that would be your best bet.

The pros of doing this is
-You profited at the purchase
-You fix it up and refinance with a regular bank. (This might not work for everyone, depending on banks)
-You will cashflow every single month
-You will ride appreciation, if you ever run into any issues you can always sell it, and I guarantee you will not loose any money since you purchased it with equity. Worst case scenario is you will break even.


Network with real estate investors (Below is a link that will get you started)
https://www.meetup.com/topics/real-estate-investors/

Cashflow is king !!!!

 

[DGI]

New update: apartment just sold, 10% above the price I was hoping for! Now lets put the money to work!

Already got some ideas when it comes to new apartments with no money down as well as invest in dividend growth stocks. Only "problem" is that the stock market is at an all time high, even though there are still reasonably priced stocks available,

 

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[toxicrain]

short the stocks! :0