Capital Gains

Chris owns some property that he's thinking of selling, in order to help pay off his mortgage. Dave thinks this is a no-brainer.

QUESTION: Chris owns a piece of property and he is considering selling it to pay off his own mortgage.  He would have a capital gain of about $120,000 and he owes $140,000 on his own house.  Should he sell the property?

ANSWER:
You should not go into debt to invest, which is essentially what you’re doing here.  Sell the property.  You’ll pay some taxes, but you will be debt-free.  Then, take the house payment you used to have and invest it in good growth stock mutual funds or in real estate if you want to go that route again.
 

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