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San Diego Rental Property Investing Versus the Stock Market

Small, white house with well-maintained front yardWhen it comes to San Diego rental property investing, many people resist because they think that it will consume a chunk of their time, and thus will lead to lower net returns compared to stock investments. But, why do so many smart investors continue to invest in rental properties? San Diego rental property investing has four key benefits, while stocks only give some of those benefits.


For income generation, real estate investments are more advantageous than stock investments are. Income is recognized as the remaining profit when all other debts and expenses are paid. Rental properties provide income or “cash flow” on a monthly basis, while stocks often do not.


San Diego rental property investing uses leverage, or a loan, for the initial property purchase. If you own your own house, then this will be familiar territory. Yet with a rental property investment, the mortgage payment does not come from your own pocket, but instead from the monthly rent. When you consider it this way, then it seems like a great deal. After all, when was the last time someone offered to purchase stock for you?

Tax Benefits

A key advantage with a real estate investment is the tax benefits you can enjoy. One of the most powerful tax benefits you can receive is owning a rental. Even if you are seeing a profit, property depreciation allows you to claim a loss. Although this benefit will fade with time, there is another option to help you with your taxes. With a 1031 exchange, you can sell the rental property and then buy a different one without paying any capital gains tax. You can then resume the process from the start. Now, of course, we do not recommend you do this on your own but instead with the proper guidance and accountant.


Appreciation is when an asset’s value has increased beyond what you initially paid for it. This is the key reason people invest in the stock market, and real estate will appreciate as well. You will need to keep an eye on the economy, but savvy investors can profit from this type of buying and selling.

Does real estate require more work than stocks?

If you choose to do property management on your own, then real estate will be more work than stocks. You must do all the maintenance and answer every tenant phone call. However, you don’t need to do all that. You can hire a professional property manager to work on those tasks for you. This will not only save you time and hassle but also help you make more money because a good property management company will endeavor to reduce vacancy periods, resolve issues quickly, keep your tenants satisfied, and strive to obtain the best maintenance costs.

Would you like to learn more about the San Diego property management services offered by Realevate Specialists? Please contact us online or call our Mission Valley office at 858-997-2100 or our Temecula office at 951-461-0100 for more information.

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