I’m 28 yo and I have been dabbling in ETFs. Right now I have $60k in fidelity in a combination of QQQI, SCHD, VOO, VXUS, VGT. I make $185k annually and normally only add when there’s a dip (couple hundred a week at this point). A family friend of mine offered to sell me an 3 bed 1 bath property for $75k which I would use as a rental since I own (finance) my home. They offered to self finance the property at 5.5% with an 10 year amortization schedule which we would have a signed contract complete at the local abstract office. Current tenants pay $1600/month. If I did a down payment of $35000 to finance $40k the monthly would be about $440/month so I’d profit $1000 after insurance I would expect. It would take about 3 years to break even from the $35000 I’d put down. I had also planned to purchase the property through an LLC I created preemptively due to my interest. The $35k would come from my brokerage as I just purchased my home 2 months ago and used all my savings for that.
TLDR: would a rental property be worth it if it takes 3 years to break even and the down payment is coming from my brokerage or would I be better off just throwing more money into the stock market?
A thought I had was to put part of the profit into QQQI, SGOV or SCHD so it grows further and I reach my break even quicker.
Invest more in brokerage or buy rental property?
byu/Only-Journalist8773 inpersonalfinance
Posted by Only-Journalist8773
3 Comments
What is your career so I can guide my son or daughter in a few years?
if you got $75,000 gift free and clear. would you buy a house to be a landlord at 28 or would you just dump all that cash into your brokerage account and watch money make more money while you sleep, go about your normal day?
dont create extra work for yourself. investing is the easiest job out there.
On paper this looks like a great deal, but I think the risk isn’t in the numbers you listed — it’s in the ones you didn’t.
$1,000/month “profit” before vacancies, repairs, capex, taxes, and management can shrink pretty quickly. One bad tenant or a major repair and your 3-year break-even turns into 5+.
Also, you’d be pulling $35k from a diversified portfolio into a single, illiquid asset right after buying your own home — that’s a pretty big concentration risk.
Not saying it’s a bad deal, but I’d stress test it:
* What if rent drops or there’s 1–2 months vacancy?
* What if you need a $5–10k repair?
If it still looks good after that, then it’s probably solid.
Otherwise, continuing to DCA into ETFs is the “boring but reliable” path.
This feels like a classic “great deal vs. good system” decision.