My Reality Check: Be a Landlord or a SU Owner?A funny thing about interest rates. Last time I checked, TD is charging me 2.75%, to hold SU in my margin account if i put up 30% of my own money, but SU gives me a 4.8% dividend. So, it presently pays me around net 2% to own this stock, plus I get to keep the upside if it increases. I could sell in a keystroke. I can also sell and buy back a minute later to crystalize a capital gain bit by bit each year for tax planning, so I don't get hit all at once.
As a past landlord, I owned rental properties, that I bought with mortgages that maxed out my credit, with about 25% of my own money in equity. The rent helped pay the mortgage, and kicked a small profit if all went well. However, it took over 20 years for the properties to double in value, and I had to work my butt off to do it, putting up with vacancies, bad tenants, hoarders, paint, maintenance, going to court, evictions, tenants fighting, move outs, cleaning, move ins, being there to collect rent, fixing appliances, cutting lawns, snow removal, sewage backups, city fines for not shovelling sidewalks, etc.. I eventually sold them, and was hit with what I thought was a big capital gains tax bill as my 20 year reward. Brutal.
When I compare that with owning Suncor, I'm quite confident it will double much faster than any real estate holding I could own, and it pretty much already did these last 12 months. A regular dividend gets deposited without an argument, hassle, or complaint that it lost it's job, one Suncor share never fights with another Suncor share, and I have yet to be called in the middle of the night to go unplug any overflowing toilet.
Granted, the market has been exceptional this year for those that took advantage of the low levels during the Covid crash, but I regret I didn't do this years ago.
Today, I can live comfortably in sunny and warm Thailand in my shorts and sandals reading the great thoughts and posts here on the SU board.
I hope this might help everyone find their beach one day.