I have been contributing to a few retirement investment plans and I think that I'm on the right track. I do not own any property and I am currently renting.I'm thinking of purchasing property either as an investment or primary home by taking out a loan against my retirement funds for down payment.I'm not sure if this is a good move.Should I just keep investing in my retirement or should I go down the real estate route? What are the pros and cons? Isn't retirement a worthwhile and valid investment compared to property?
i think you should figure out how to do both. certainly put as much as you can in retirement planning. but it make sense to me to own your home if you can instead of renting it
Real estate is a good investment but all it would take is a market crash to kill you. Don't put all your eggs in one basket. Have a well funded retirement fund, I recommend a long term fixed income bond at 10%+.
You may want to consider the risk of job loss or a debilitating illness or injury where there is no income to repay the loan against the retirement plan and also triggering income taxes and penalties, hence a double whammy. In addition with an illiquid investment like real estate, if your rental income does not cover your mortgage payment, this will put you further behind. Also there is the risk of natural disasters. Also there is no guarantee of capital appreciation at the time you want to sell because of market forces.
