Wednesday, May 13, 2009

a key to retirement

A Key to Retirement
Buying a second home as rental property makes a great centerpiece to your retirement plan.

It forces you to make regular savings in the form of mortgage payments that become your equity.

You only need cash for the down payment, and you should make sure that your monthly rental payments will cover the mortgage and any additional expenses. This is a real possibility if you buy the right house at the right price, because a good single-family house should always stay rented.

Your investment money is subject to less income tax, and the interest and property taxes may be deductible. Housing has appreciated in value over the recent years, making a second home an important hedge against inflation.

Most experts predict that interest rates for fixed-rate and adjustable mortgages should remain in single digits for the foreseeable future, so it should be easy to acquire financing with a small down payment.

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