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Sep 9 Real Estate Investments Vs. Mutual Funds

Posted by: MonsterMortgage.ca

Investing In Real Estate versus Mutual Funds

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 of investing in real estate.

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

Here’s a comparison between Real Estate and Mutual Fund Investments:

  • In the current downturn, real estate investments haven’t dropped as dramatically as mutual funds.

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

  • If liquidity of your investment is important, mutual funds offer faster access to cash than real estate investments.

  • In both cases, buying low is a major benefit. But with a real estate investment, you can buy even lower with a fixer-upper, do the work yourself, and create even higher profits.

  • A Real estate investment offers leverage opportunities. Let’s say you make a 20% down payment on a $500,000 house, and in two years it’s worth 10% more ($550,000). The return on your actual real estate investment is 50%! Leveraging mutual funds and stock investments can be riskier because values change more rapidly. Plus, the bank won’t loan you $400,000 to buy $500,000 in stocks!

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

Chances are we can access the equity in your current home to help you generate new wealth!

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