A 30-year-old man from China has decided to stop investing in rental properties and move his money into dividend funds and high-dividend stocks after achieving financial independence through property rentals, according to the South China Morning Post.

Fan Junjie, originally from Jilin in northeastern China, spent more than 2 million yuan (around Rs 2 crore) buying old flats in Changsha. However, managing the properties became more difficult than he had expected, leading him to change his investment plan.

Fan moved to Changsha for work, where he worked in internet healthcare sales and often spent 18 hours a day at work, according to mainland media outlet Sanlian Life Laboratory.

After becoming familiar with the high property prices in major Chinese cities, he saw an opportunity in older flats in downtown Changsha. Some of these properties cost as little as 300,000 yuan (around Rs 42 lakh), including renovation expenses.

Starting in 2023, Fan bought 14 old flats over two years, spending more than 2 million yuan in total. These properties, known as "laopoxiao", are small flats with old facilities and limited space.

He mainly purchased properties near Xiangya Hospital. To make their maintenance easier, he followed similar renovation plans for the flats and kept spare parts ready for repairs.

Out of the 14 flats, 11 are currently rented out. They generate an estimated annual income of 210,000 yuan (around Rs 29 lakh).

His cheapest flat cost 150,000 yuan and earns him 1,700 yuan (around Rs 23,931) in monthly rent. His most expensive property cost nearly 310,000 yuan (around Rs 43 lakh), including taxes, agency fees and renovation expenses. It brings in 2,200 yuan in monthly rent.

By the age of 30, Fan had reached his goal of financial independence and early retirement, also known as FIRE.

However, managing rental properties turned out to require more effort than Fan had expected. Agency fees, taxes, repair costs and tenant-related responsibilities gradually reduced the benefits of earning rental income. Falling property prices also created a risk for the money he had invested.

On October 26, Fan announced that he would stop buying properties, stating that the best period for such investments had passed.

He now plans to move his money into dividend funds and high-dividend stocks instead of purchasing more flats. This would allow him to receive investment payouts rather than monthly rent.

Fan believes that rental income and dividends work in a similar way because both provide regular earnings from assets. However, he also recognises that both types of investment involve the risk of losing money.

He pointed out that the biggest difference between the two is how quickly the money can be accessed. Dividend funds can be sold within a few days, while renting out a flat can take several weeks from listing the property to receiving the first rental payment.