Where to put your cash? A house or a stock

Where to put your cash? A house or a stock

homes VS stock

 

A new article came out today trying to indicate whether to put your money in a home or stock.

They try to go back to the late 1890’s to give their advice but looking since the 1980’s it seems to me that that there are conflicting reports. The home values have gone up and taking into account you can live in your investment and receive a tax deduction for your interest paid on your home; and after 2 years you can declare a tax free gain of $250,000 per person ($500,000 per couple) this is a much better investment return than putting your money into stocks.

That being said, you never want to place all your eggs in one basket, less you drop that basket and break your eggs.

If you kept your home investment, even though you received a paper loss, you will end up with a true capital gain. Real estate always goes up, but you cannot say that about all stocks if you hold on to them.

The government is pushing home ownership as an investment. Which is good, interest rates are low, and home owners get a tax deduction which is not received if you are a renter.

 

Also if you live in Orange County, your values have really returned strongly and had you held onto your home, you would have a nice equity growth, much better that the stock market.

 

A house can also offer greater returns if the owner chooses to rent it out and not to live in it; and if you sell it within 3 years of renting it you can still receive your tax free capital gains.

It’s a riskier choice, given the current volatility in home prices, but it may be the best way to build wealth.

Before doing anything you should check with your Professional for advice, your tax accountant for taxes and your Real Estate Agent for Real Estate

MarleneDietrich@Realtor.com

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