Why I’d dump buy-to-let property and buy this investment instead

first_img Michael Taylor | Friday, 31st January, 2020 | More on: RMV I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Michael Taylor has no position in Rightmove. The Motley Fool UK has recommended Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. Why I’d dump buy-to-let property and buy this investment instead See all posts by Michael Taylor Image source: Getty Images center_img Our 6 ‘Best Buys Now’ Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address “This Stock Could Be Like Buying Amazon in 1997” Buy-to-let investing has certain advantages over equities. It’s tangible, and you can see exactly what you own.People are always going to need somewhere to live. And there’ll always be people who can’t afford or choose not to jump on the first rung of the property ladder and pay rent instead. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…That’s why some people feel a lot more comfortable owning property than stocks. But those who focus solely on buy-to-let investing miss out on the many benefits of the stock market, including (but not limited to) diversification, tax-free profits, and exposure to some of the world’s best companies. Unlike buy-to-let, where we have to do all of the work, with stock market investing, we can simply buy shares in a company, and the directors of that company and all of the employees then work for us. While I’m not shy of hard work, I certainly prefer others to do it for me if I don’t have to get stuck in myself!That’s why I’d dump buy-to-let and buy this stock instead.Rightmove is a cash generative machineRightmove (LSE: RMV) came to the stock market in 2006 and since that period the board and employees have worked their socks off for shareholders. Anyone who decided to take the IPO 14 years ago has seen their investment increase well over 15 times. That’s a fantastic return for shareholders, and while the low hanging fruit may have been gathered already, the sheer amount of cash that Rightmove produces means that this stock may have further left to run.Of the £87.45m in after-tax profit generated, the company produced cash flows from operations of £90.73m. This is not a business that turns a profit and fails to convert any of those profits into cash – it’s a business that churns out more cash than it makes in profit. This is most likely due to positive relationships with suppliers. For example, if a company pays its suppliers on a 60-day term but is paid by its debtors on a 30-day term, it means the company collects its cash sooner than it has to pay cash out. Rightmove’s moatWhile many companies have tried to challenge Rightmove, so far no other competitor has been able to dislodge the company from top spot. The beauty of the business is that it has a scalable online platform, and estate agents pay the business to list properties. This in turn kicks in a positive self-reinforcing network effect; the more estate agents that list properties on the platform, the more potential house buyers will check the site out and drive traffic to the platform. More house buyers means more estate agents signing up!Rental yieldsOne of the things we look for in buy-to-let is the rental yield and also what yield we are getting on our capital employed. Well, that metric also exists in investing too, with return on capital employed (ROCE) being used to measure a company’s return on the capital that it uses to invest in itself.Rightmove has a three-digit percentage ROCE, and is clearly more effective than owning buy-to-let properties, in my view.  Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!last_img

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