Rental Property as an Investment
With the stock markets nearing all-time highs, another potential investment idea is purchasing a rental property here in San Diego. There are several reasons why this idea is worth exploring. First of all, when considering investing additional funds in the markets, the stock market is currently quite high after a long run-up. It may be a good time to pull some funds out of the market to diversify your portfolio. Second, with typically only a 25% down-payment requirement needed for those with good credit, an investor can experience excellent leverage. So for example, $100,000 invested in a stock, that eventually doubles, will make you $100,000 in gross capital gain. But that same $100,000 invested in a $400,000 rental property that eventually doubles in value could make you a gain of $400,000 before expenses. Additionally, mortgage interest rates are still historically low. Finally, rental property investment typically has tax advantages such as interest and depreciation deductions. Of course, meet with myself and your tax or financial advisor before investing. For additional questions on rental property investment, call me to schedule an informative appointment.
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