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3 Mar

What’s the Better Investment?

Mortgage Tips

Posted by: Kim Banting

I’m not a financial advisor, nor am I an expert in investing, but in these turbulent economic times it’s more important than ever to discuss this important and controversial topic…

Even today, both mutual funds and real estate still offer investment potential.

Wondering which is better?

Here are a few things to consider….

When you borrow to make either investment, the interest is tax deductible. But revenue property delivers further benefits: maintenance expenses and building depreciation are also deductible.

If liquidity is important, mutual funds offer faster access to cash than real estate.

In both cases, buying low is important – but with a revenue property you can buy even lower with a fixer-upper, do the work yourself, and create even higher profits.

Real estate offers leverage opportunities. Let’s say you make a 20% down payment on a $500K house and in two years it’s worth 10% more ($550K). The return on your actual investment is 50%!

Leveraging equities can be riskier because values change more rapidly. Plus, the bank won’t loan you $400K to buy a $500K stock.

Both real estate and mutual funds gain value over the long term. But revenue properties also yield monthly income which can cover mortgage payments. As you build equity, you have more funds to purchase a second property.

If you’re interested in investing in Real Estate, send me a message and we can book a free call today.