I am Jay Bru, and this topic is near and dear to my heart because I am an investor, and I’m always looking at returns to see where your money best fits you. Of course, I’m mostly in real estate and luckily got in over 15 years ago. I own and managed 16 units, and Airbnb. I do Fix and Flips, and then I’m involved in two real estate syndications on Multi-Family. I have IRAs, lend out hard money, and do other small things. I had to make this blog because I didn’t know whether real estate or stocks were a better investment. I guess you could say RE back then it was a great investment, but you have to be able to borrow money. The less you can put down on a real estate investment, the higher the rewards on your return, but in today’s expensive environment, Arizona, Canada, California, and Washington are all very expensive places to live, and it’s very hard to make money in real estate. The stock market is at an all-time high, and it’s hard to see it keep climbing with great rates of return, so I wanted to put everything down on this blog. I hope you enjoy it.
When it comes to growing your wealth, finding an investment that offers a solid 10% return is the dream but yet the S&P just did 13.73% in the past decade. But with so many options out there, how do you decide where to put your hard-earned money? Two of the most popular choices are stocks and real estate, each offering unique advantages and potential drawbacks. Whether you’re looking for a hands-off approach or prefer a more active investment, understanding the key differences can help you make the right choice for your financial future. Let’s dive into the pros, cons, and what makes the most sense for you! And then I also added some other investments at the end like real estate syndication, money market funds, T-bills and more. I like stock and real estate so that’s where we’ll start.
Investing for a 10% Return: Dividend Stocks vs. Real Estate
If you’re looking to grow your money with a solid 10% return, you might be wondering: Should I invest in dividend stocks or real estate? Let’s break it down in a way that makes it easy to understand.
Option 1: Dividend Stocks (The Simple Choice)
How it works:
- You buy shares of a stock that pays a 10% annual dividend or a stock that goes up in value.
- If you invest $100,000, you’ll receive $10,000 per year in passive income.
- No effort required—just sit back and collect dividends.
Pros of Dividend Stocks:
✔️ Easy to manage—buy and forget.
✔️ Passive income with no extra work.
✔️ Highly liquid—you can sell anytime.
Cons of Dividend Stocks:
❌ Stock market ups and downs can impact your investment.
❌ No tax benefits.
❌ No ability to leverage your investment (your $100K is your $100K).
Option 2: Real Estate (More Work, Bigger Rewards)
Example Investment:
- Buy a $500,000 rental property
- Put 20% down ($100,000)
- Get a loan for $400,000 at a 7% interest rate
- Rent it out for $4,500/month
Your income breakdown:
- Rental Income: $4,500/month = $54,000 per year
- Expenses (mortgage, taxes, insurance): ~$3,700/month = $44,000 per year
- Profit (Cash Flow): ~$10,000 per year 💰
Extra Bonuses:
- Your loan balance goes down by about $6,000/year (equity build-up)
- Your home value could increase by 3% a year (another ~$15,000 in equity)
Total Potential Return:
💰 Cash Flow: $10,000/year (10% return like stocks!)
🏡 Equity Growth: $6,000/year (bonus!)
📈 Appreciation: $15,000/year (long-term wealth)
Pros of Real Estate:
✔️ Cash flow + equity build-up + appreciation = BIG potential returns. And you its tangible, you can see and visit it.
✔️ Tax benefits (write-offs for mortgage interest, depreciation, and more).
✔️ You can use leverage—investing $100K controls a $500K asset.
Cons of Real Estate:
❌ Requires effort to find and manage a property.
❌ Not as liquid—you can’t sell overnight like stocks.
❌ Upfront costs and ongoing maintenance.
Which One Is Right for You?
Choose Dividend Stocks if:
- You want a hands-off, stress-free investment.
- You like the idea of easy buying/selling.
- You prefer consistent, predictable income.
Choose Real Estate if:
- You want higher returns over time through appreciation and loan paydown.
- You’re okay with a little work (or hiring a property manager).
- You like tangible assets and potential tax savings.
Final Thoughts:
Both options can provide a 10% return, but real estate offers extra benefits like equity growth and appreciation—if you’re willing to put in the effort.
Want to explore real estate investments in Scottsdale? Let’s chat!
📲 480-466-4917 or visit www.jaybrugroup.com
Real Estate Investing compared with some alternatives
Investing is a crucial step towards achieving financial stability and growth. With various options available, it can be overwhelming to decide where to allocate your resources. Let’s explore some popular investment avenues, including real estate, real estate syndication, Airbnb investing, stocks, dividends, T-bills, money markets, and peer-to-peer lending.
Real Estate Investment
Real estate has long been a preferred investment choice due to its potential for steady cash flow and appreciation. Here are some ways to invest in real estate:
- Residential Properties: Purchase homes, condos, or apartments to rent out. This provides a regular income stream and potential for property value appreciation.
- Commercial Properties: Invest in office buildings, retail spaces, or industrial properties. These typically offer higher returns but come with greater risks and higher investment requirements.
- REITs (Real Estate Investment Trusts): These are companies that own, operate, or finance income-generating real estate. Investing in REITs allows you to earn dividends without directly owning properties.
Real Estate Syndication
Real estate syndication involves pooling resources from multiple investors to purchase larger properties or projects that are typically out of reach for individual investors. Here’s how it works:
- Pooling Funds: Investors collectively contribute capital to buy properties such as apartment complexes, commercial buildings, or development projects.
- Professional Management: The syndication is usually managed by experienced sponsors or syndicators who handle the property’s day-to-day operations, making it a passive investment for the contributors.
- Profit Sharing: Profits from the investment are distributed among the investors based on their contribution and the syndication agreement.
Airbnb Investing
Airbnb investing involves purchasing properties specifically to rent them out on short-term rental platforms like Airbnb. Here are some benefits and considerations:
- Higher Income Potential: Short-term rentals can generate higher income compared to traditional long-term rentals, especially in high-demand tourist locations. I own one and its more work, but you make more, so its a trade off.
- Flexibility: Owners can use the property for personal use when it’s not rented out.
- Regulations and Management: Be aware of local regulations regarding short-term rentals and be prepared for the extra management effort involved in maintaining a successful Airbnb property.
Stock Market Investment
Investing in stocks allows you to buy shares of publicly traded companies. Here’s why it’s a popular choice:
- Potential for High Returns: Stocks have historically offered higher returns compared to other asset classes, though they come with higher risks.
- Dividend Income: Some stocks pay dividends, providing a regular income stream in addition to potential capital gains.
- Diversification: By investing in a variety of stocks across different sectors, you can spread risk and increase potential returns.
Dividend Stocks
Dividend investing involves buying stocks that pay regular dividends. This strategy is popular for those seeking steady income. Key points include:
- Regular Income: Dividends provide a reliable income source, which can be reinvested to purchase more shares or used as cash flow. ROI is low, they say 8% dividends for a company is hard to sustain.
- Stability: Companies that pay dividends are often well-established and financially stable, making them less volatile.
Treasury Bills (T-Bills) and interest income:
T-Bills are short-term government securities with maturities ranging from a few days to a year. They are considered one of the safest investments. Benefits include:
- Low Risk: Backed by the U.S. government, T-Bills are virtually risk-free.
- Liquidity: They can be easily bought and sold in the secondary market.
- Fixed Returns: T-Bills provide a fixed return, making them predictable and stable.
- Watch this video for 6 different types of interest incomes, click here.
Money Market Funds
Money market funds are mutual funds that invest in short-term, high-quality securities. They offer:
- Low Risk: Money market funds are considered low risk and aim to maintain a stable net asset value.
- Liquidity: They provide easy access to your money, similar to a savings account.
- Moderate Returns: While not as high-yielding as stocks, they offer better returns than traditional savings accounts. Very low around 3-5%. Its basically like a high interest savings account.
Peer-to-Peer Lending
Peer-to-peer (P2P) lending platforms connect borrowers with individual investors. Investors can earn interest by lending money directly to borrowers. Key advantages and risks:
- Higher Returns: P2P lending can offer higher returns compared to traditional savings accounts and bonds. But still only in that 8% range, its still not enough. The magic number in my head is 10%+
- Diversification: By lending to multiple borrowers, you can spread risk across your portfolio.
- Default Risk: There is a risk of borrowers defaulting on their loans, which can impact your returns.
Buying the S&P over the last 10 years has paid out 13.72% ( This was the move :(. )
Over the past decade, the S&P 500 has demonstrated remarkable growth. If you had invested $100 in the S&P 500 at the beginning of 2015 and reinvested all dividends, your investment would have grown to approximately $354.05 by the end of 2024. This represents a cumulative return of 254.05%, or an average annual return of 13.72%.
Here’s a breakdown of the annual returns during this period:
Year | Annual Return |
---|---|
2015 | 1.38% |
2016 | 11.96% |
2017 | 21.83% |
2018 | -4.38% |
2019 | 31.49% |
2020 | 18.40% |
2021 | 28.71% |
2022 | -18.11% |
2023 | 26.29% |
2024 | 25.02% |
These figures highlight the S&P 500’s resilience and growth potential, even amid market fluctuations.
Conclusion
Each investment option comes with its unique set of risks and rewards. Diversifying your investment portfolio across different asset classes can help manage risk and optimize returns. Whether you’re interested in the stability of real estate, the growth potential of stocks, or the income from dividends and P2P lending, there are numerous opportunities to grow your wealth and achieve your financial goals.
By exploring and understanding these diverse investment avenues, you can make informed decisions that align with your financial objectives and risk tolerance. Happy investing!
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Real Estate Analytical Review
Returns in the real estate investing market have been healthy over time as well. Twenty-year returns for commercial real estate outperform the S&P 500 index, although marginally, at 9.5%. Investors have seen even better returns on residential and diversified real estate investments, which average a 10.6% return. Of course, attractive returns lie ahead for intelligent investments, but significant cash flow, rising rents, and maybe most importantly, leverage are all major advantages for taking the real estate route.
Leverage, in real estate, is the investor’s option to easily obtain funding for investments, whereas, with other non-leverage type investments, an investor would put up 100% of the money for the investment. Leveraged investments allow you to pay a modest amount for the full investment. This separates real estate from most other investments, but as any investor knows, leverage carries the risk of a future inability to pay back the leveraged amount.
It should also be noted that investments in real estate carry certain tax benefits that stock market investing does not. Certain expenses may be deductible, and properties can, at times, be traded into other real estates to avoid capital gains taxes.
When investing in real estate directly, the investor has direct control over the asset that has been invested in. When investing in stocks, rarely does the investor have any control over the running of the individual business. With stocks, the investor is a silent partner, relying on the management of the company to increase the value of the investment. With real estate, while the returns may be slightly better over time, the more direct involvement of the investor is required.
Other investments may include:
- Real estate syndication:A real estate syndication is a partnership between a group of investors pooling their resources into a single investment.
- Hard money lending: Hard money loans, unlike traditional loans, are based on the collateral that secures the loan. Typically are paid in full in 12-18 months or as short as 6 months. They include points at the start and can involve penalties if not paid back at a given time.
- ETF’s, bonds, money market funds, and mutual funds are typically low yielding but can be safe.
- Credit card debt and loans. If you have credit card debt where you are paying 20%, that is the best investment you can make.

Which Investment is Right for You?
As mentioned earlier, it cannot be said with conviction which strategy is best for you. Of course, do your homework on the investment you are considering. Research on the decision to choose the path that is right for you. While one strategy may work for one investor, it may not work for another. We are all different with separate skillsets, so invest, but invest in what you are most interested in.
I invest in real estate and sell it. Call me for a conversation
Jay Bru
480-466-4917
Real Estate Sales Scottsdale Arizona