Market Presets:
Executive Reality Check
Rental Cash Flow vs Passive Dividends
Initial Capital
$100,000
Time Horizon
15 Years
Real estate achieves higher total wealth growth via 4x leverage if property appreciation matches 3.5%, but stocks yield virtually identical passive net annual cash flow in Year 1 with zero landlord time requirements.
Rental Net Cash Flow (Yr 1)
$3,624
3.62% CoC
After debt, tax, ins, maint & mgmt
Equities Dividend Yield
$2,800
9.25% Net Total
100% passive, zero operational labor
Liquid REIT Benchmark
$4,200
4.20% Yield
Real estate yield without direct title
Effective Landlord Wage
$50.33/hr
$38.50/hr B/E
At 6 hrs/mo active oversight
Annual Cash Flow Waterfall Decomposition
Where does gross rental income actually go before reaching your pocket?
| Line Item Component | Annual Impact | Monthly Impact | % Gross Rent |
|---|
Total Net Equity Compounding
Real Estate (Leveraged Equity) vs Stocks vs REITs
Year 15 Real Estate Net Equity:
$0
Year 15 Equities Portfolio (Compounded):
$0
Year 15 REIT Portfolio:
$0
Diligence Parameters & Sensitivity Sliders
Stress-test real estate friction, interest rates, vacancy spikes, and active landlord hours.
Real Estate Financing
Property Purchase Price
$400,000
Down Payment %
25% ($100,000)
Mortgage Interest Rate
6.5%
Gross Monthly Rent
$2,800/mo
Operating Frictions & Drag
Vacancy Rate
5.0%
Property Management Fee
8.0%
Property Tax Rate (% value)
1.2%
Landlord Labor (Hours / Mo)
6 hrs/mo
Equities & Long-Term Drivers
Stock Dividend Yield
2.8%
Stock Capital Growth Rate
6.5%
Real Estate Appreciation Rate
3.5%
Analysis Horizon (Years)
15 Years
Structured Due Diligence Framework: When to Choose Which
🏆 Real Estate Wins When:
- You acquire in growing tier cities with rapid population & job expansion.
- You can lock in sustainable fixed-rate mortgage leverage (3x-4x).
- Depreciation & 1031 exchanges shield taxable ordinary income.
- You have local operational bandwidth for turnover & repairs.
⚡ Equities / ETFs Win When:
- Your primary job or life values 100% passive, zero-friction capital.
- Immediate liquidity is essential (instant settlement vs 60-day sale).
- You avoid geographical concentration risk and municipal tax hikes.
- Tenant dispute, eviction moratoria, and property liability are unacceptable.
🏢 Public REITs Win When:
- You demand institutional-grade commercial property exposure.
- High upfront dividend yield (4.0% - 6.0%) is required immediately.
- Professional management is baked into share prices without active hours.
- Zero personal loan guarantees or foreclosure exposure.