Vanguard Real Estate Index Fund vs Buying a Rental Property: Which Is the Better Investment Choice?
Thinking About Buying a Rental Property?
A common form of passive income is buying a rental property. But investors may be keen to learn that there are less risky options in the real estate market. There are many ways to build an investment portfolio. Of course, stocks and bonds are two of the more commonly chosen vehicles for beginner investors.
Alternative Assets and Risks
But alternative assets including artwork, collectibles, or crypto also garner significant interest. A drawback of alternative investments is that these assets can carry higher risk compared to the capital markets given their speculative nature.
Owning a Rental Property vs Vanguard ETF
One category of alternative investing that may be viewed as less risky than other areas while also providing lucrative returns is owning a rental property. Although rental properties are a proven source of passive income, investors should understand the entire picture before blindly entering the real estate market.
Conclusion
While acquiring a rental property may seem appealing, investing in the Vanguard Real Estate Index Fund offers a potentially safer and more reliable option for passive real estate income. With its diversified holdings and reliable dividend yield, the Vanguard ETF could be a better choice for investors looking for lower risk and decent long-term performance.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.