Andrew Cotner, Realtor - Your San Diego Real Estate Agent

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MPI Real Estate
5353 Mission Center Rd
Suite 212,
San Diego, CA 92108
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San Diego Real Estate - The Best Investment?

The Best Investment?

Historically, homes in the United States have appreciated about five percent a year. Some years it's more and some years it's less. The figure will vary from neighborhood to neighborhood, and region to region.

However, in San Diego and most parts of Southern California the appreciation is traditionally much higher than the rest of the country.

Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could likely earn a similar return with any number of very safe investments.

Lets take a closer look at Real Estate…

Presumably, if you bought a $400,000 home, you did not pay cash for the home. You got a mortgage, too. Suppose you put ten percent down - that would be an investment of $40,000.

At an appreciation rate of 5% annually, a $400,000 home would increase in value $20,000 during the first year. That means you earned $20,000 with an investment of $40,000. Your annual "return on investment" would be a whopping fifty percent. This isn't even taking into consideration the home owners who choose to buy with 100% financing!

Your initial down payment could be as little as zero (or as much as you want) but one fact stays the same, you will receive all the financial benefits of the home. Not the bank, not a landlord...all of the financial gain goes directly to you!

Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.

Your rate of return when buying a home is higher than most any other investment you could make. And besides, how much equity have you earned from renting?

It is estimated that 90% of all millionaires in the United States made their fortune in Real Estate. Certainly, I am not saying you will become a millionaire by buying a home, but it certainly provides some insight into the value of home ownership as a personal investment.

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