Real Estate vs ETF: Long-Term Comparison
Real estate provides two return streams — property appreciation and rental income — but involves high upfront costs (closing costs, agent fees), low liquidity, and ongoing maintenance. ETFs offer instant liquidity, ultra-low expense ratios, and easy diversification. This calculator compares both on an equal-capital, no-leverage basis.
Real estate final value assumes net invested capital (after upfront costs) grows at the combined rate of appreciation plus rental yield. ETF final value assumes the full investment grows at net annual return (gross return minus expense ratio). Real-world results also depend on mortgage leverage, capital gains tax, vacancy rates, and maintenance costs.
Frequently Asked Questions
Yes significantly. Mortgage leverage can amplify real estate returns dramatically. This calculator uses unleveraged, equity-only capital for a fair comparison.
No — this shows pre-tax returns. Use a separate capital gains calculator to estimate your after-tax outcome for each investment type.