Notes vs. Rentals – what fits your 2025 strategy?

Question

As the market keeps shifting, I’ve been thinking more about balancing property ownership with paper assets like mortgage notes. Both have their pros and cons, but notes seem to offer steady returns without the tenant headaches.

Curious how others are planning their 2025 investing mix — sticking with rentals, or starting to look at paper?

Chris Seveney · Answer

See: @Jamie BatemanNotes vs. Real Estate–Which One Wins?Note Fund vs Rental Property InvestmentNote Fund vs Rental Property Investment

David Krulac · Answer

Do both!

Elealeh Fulmaran · Answer

Both can work; match them to your goals. Rentals build long-term wealth through cash flow, appreciation, depreciation, and debt paydown, but require systems and team. Notes offer simpler, steadier payments with less headache, but limited upside and you’re not in control of the asset. For 2025, I like a barbell: keep buying solid, cash‑flowing rentals you’d hold through rate swings, and allocate a slice to well‑underwritten, collateral‑backed notes. Action today: define target returns and risk, then choose one rental market and one note source to pursue next quarter.

Jamie Bateman · Answer

@Charles Kennedy I like having a mix of both rentals and notes. There are many factors at play here including your experience level, your time/resources available, and your goals. Pros and cons to both strategies. A lot of note investors look down on rentals but I have found them to be a strong part of my investing foundation. Tax advantages not found with notes.

William Thompson · Answer

That’s a great question — and honestly, I’m seeing more investors thinking the same way right now.

Owning notes definitely gives you consistency and less operational stress — no tenants, no maintenance calls, and usually predictable returns. But on the flip side, rentals still give you the tax advantages (depreciation, cost seg, leverage) that paper assets just can’t match.

A lot of my clients are taking a hybrid approach for 2025 — holding core rental assets for appreciation and tax benefits while shifting some capital into notes for smoother cash flow and diversification.

If you blend them right, you can keep your tax position strong and your cash flow steady — best of both worlds.

What’s your main goal for 2025 — more cash flow or more long-term equity growth?

Notes vs. Rentals – what fits your 2025 strategy?

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