Investing in stocks or buying property?

Question

My mother who is 65 years old has been widowed and sold their home and is living at their 2nd home, which is paid for. She is thinking about buying property to rent out, maybe with a rent to buy for whoever rents it from her. She could probably buy a decent house for around $80,000 cash and rent it for around 800.00 a month and sell it for a profit in a few years. Is this a good option for her instead of stocks or other investing. She is not looking for long term because of her age. She is concerned about capital gains though.

Answer 1

I think, I  would go for the property rental, but again i am no expert...

Answer 2

What subprime borrowers are left to drive home prices up again? None, zero, zip. She may be left at a loss with real estate so have her stick with stocks. Although stocks may crash in a few years too, she can get out instantly, whereas houses can take months or years to sell.

Answer 3

Stock

or buy property here in MOROCCO

they Increase every year 15%

yeah !! is the Most better Property

If you need more help add me

Answer 4

It all comes down to what the real estate market and its potential growth. Are there any big contracts coming to town which would encourage capital growth? What is the vacancy rate in town for rentals - and is your property competitive with what it offers at the $800 tag?

Lets play it this way:

Assuming that you have the property rented 80% of the time for 5 years at $800 / month; that would put gross revenues at $38,400 for the said period.

Now, obviously there will be insurance costs, taxation issues and general upkeep - so for arguments sake lets cut that figure in half, giving us a net profit of $400 per month, or $19,200 for the 5 year period -  (This works out to about a 4.8% return on the $80,000 each year). Remember, these figures were calculated at an 80% occupancy rate and costs of $400 / month.

Don't forget to be prepared for the unexpected, like plumbing problems that spring up, roof issues, etc.

Most people make the most money at the sale of the house and take profit in the form of capital gains... so it really depends on the nature of the market you are in. If it is pretty slow to move, then opt out and leave the rental properties to hand men... if it is red hot, then consider a further move. National average growth was about 5% last year, so that still only puts you at about 9% growth on investment per year.

If I were you, I would look to meet with a stock broker and take a look at putting together a portfolio of stocks that not only have good growth potential, but also have a good track record and pay good dividends. The last thing I would do is speculate.