He can always move in if he wants

Never really got this part - you don't just move in if you want, you have to unhouse a family first.

Maybe it's just because I've been on the wrong side of that...

ETFs by a mile, like I see others said, being a good landlord means it being a whole job.

Way easier to just plop some money across some ETF diversification.

Only thing I'd say is I'd assume landlording is more a "you get what you put in" kind or situation where you can work harder to do better, etfs/investing is much less in your control.

Being a landlord is a job, not an investment, unless you'd plan on being a slumlord. Costs are unpredictable, and you'd need to learn about your legal obligations to your tenants to ensure that you didn't open yourself up to a lawsuit.

Depends.

The old thinking was that owning residential property was your best performing investment, but large amounts of Wall Street capital with nothing better to do has spiralled housing costs out of control, so good if you got in early, not so good now.

Unless you're in a specific market that seems to push constantly upwards with flavor-of-the-year capital flows like AI/crypto/social media/databases such as San Francisco, but money flows so freely, that there's always the risk that the big money could move out of town and never come back.

So how do you reduce risk? Diversification.

The S&P 500 is diversified, both in terms of different industries, and internationally.

But large capital (American) stocks are only one sector of investment and may not actually be that diverse: There are also small and middle sized companies, corporate and tax free bonds.

(and American investments may be subject to high risk from a tyrannical government that doesn't respect laws and precedent)

A solitary residential house as an investment is a very specific market: Real estate value and rental income in a very specific location.

I would treat buying a house like buying milk: Buy it only when you need it.

If the house is in a community that you have solid plans to move into eventually, and you want the rent to help with the payment, and the means to pay the mortgage off quickly that's fine.

If you want to buy it as an investment, forget it: There are entities out there who will outbid you and have already inflated the market leaving you with no return; Natural disasters, leaks, fires, and bad renters who will destroy the structure without warning; As others have said, you need to spend your own valuable attention, time and money into maintaining the property.

If you own a property to rent you have to maintain it. If you get enjoyment or satisfaction from taking care of property then go ahead.

If you'd rather be fishing or something instead then invest. If you're unsure invest, because it's easier to sell investments and buy a rental than the other way around if you change your mind

ETFs distribute risk. Any one sub investment failing will not be a problem.

A property investment is "all your eggs in one basket" the risk of poor returns is higher.

Also liquidity, need some cash? Sell a small amount of your ETFs vs sell the entire property.

I've invested in both. Don't expect rent to be a good income, but if the housing market is on the way up it might be a good asset.

We bought the house for living in, but moved cities after a few years. The market value has doubled in the last ten years for our house. Being a landlord sucks, but it's borrowed money that doubled its value while tenants cover the mortgage. That down payment would've turned into ~10x if we sold the house today. Still, it's hard to find and predict a market like that just for investing.

Be prepared to lawyer up when that rent doesn't get paid. Have enough saved up to repair/replace that boiler when it fails. I spent my two-week Christmas holiday painting walls and repairing/replacing all the things last year. I'd rather have things fixed as they break, but this tenant decided to save everything for handover day.

For ETFs I spread my funds over a dozen high-risk ones, I guess they perform on average some 15% YOY. If I math that right it's a 3.5x increase over the same ten years. I'd still consider it to be less risky.

If you want a quiet life, don’t become a landlord. You can anyway invest in real estate through listed financial instruments

I'll share my personal experience.

I have an apartment rented for over 10 years, which I'm renting at way below "market price", whatever that may mean. In the area, the rent for a single bedroom apartment is in the €1200/€1600 range; I'm renting a three bedroom for roughly ¼ of that and I do not intend to hike it. I kept the rent frozen for nearly 10 years, during a period when my country was in the shit after the 2008 market crash. I started raising the rent some five years ago, roughly 2% every year, by the national rent actualization index published by the government, which is calculated taking into consideration the year's inflation rate. Fuck scalpers.

Parallel to that, I managed to put and still put some every month towards an investment fund and a special saivings product my country has, where a percentage of what you put aside is deductibke towards your income return; these products, upon maturity, are more fiscally advantageous than investing in stocks or ETFs. Regardless, I also keep an ETF on a broker but haven't had the capital to reinforce for some time now.

....you do know that if you're a landlord you're gonna have to deal with tenants who don't wanna pay right? Do you really wanna deal with that stress? God help you if your tenants just choose to abandon the property.

In my area people are selling off their rental properties these days, as the return isn't worth it any more. I'm sure there are markets where you can still earn a lot that way, but if you're not interested in being a landlord, don't become one. If you want a quiet life, keep investing in a diversified portfolio. It's ok to have other values and goals.

Depends on your life and what works for you. I invest in shares, and as long as the ETFs you invest in are climbers, then go for it.

Shares over property is attractive for me because if i ever need money in an emergency i can simply sell however many i want/need to and have the money quickly.

With a property id have to sell the whole thing and thats a nightmare in itself that takes ages - not good if i need emergency cash quickly.

Plus i dont need to maintain my shares or do anything but check em (dont have to worry about tenants, property value, maintainence etc). Way more hands off, and if you have a good hunch and research well, you can grow it way better than a property.

where are you?

Generally said, it is a lifestyle decision. One is not necessarily better than the other.

Depends a lot on where you live. We tried renting out our home after we emigrated. We missed the boat on the commodification of house prices in our previous country. They're still rising, but nothing like the amount the previous generation experienced. The primary limiting forces are loan interest rates (lower rates = higher house prices) and average salaries (rents usually reflect how much can be scalped from people in a given area while leaving them just enough for food). Unless that country does something dystopian, like introduce multi a generational mortgages (like Japan has), prices have more or less stagnated. Wages certainly don't seem to be going up.

The money you make on the house will also depend upon your own income, i.e. what tax rate you will be on for your rental income. You may not be taking home that much of your rent. The good old days (where you could dump all the rent into a mortgage and claim zero income) are long gone for a lot of countries. This might not be the case if you run all this as a company, but I decided against that, because getting money out was arse.

I currently have a few ETFs, but what you might want to consider is the ETFs your pension is invested into (if you have a defined contribution / 401k style pension). Mine are currently all invested in European ETFs in the vain hope that it may mitigate some of the losses when the AI bubble crashes, and takes the US stock market with it. Your pension will be pre-tax income, so it's a much more efficient way to save. Some countries will allow you to take out a lump sum before you retire, so this isn't necessarily just playing the long game.

Anyhow... it all really depends on where you live & your personal circumstances.

ETFs are the better decision. That said, I would just save for the next few years and wait until the AI bubble has popped. Then you can get into stocks at a low instead of at the highest they have ever been