To invest or not?

[K W]

We are still trying to determine what is the best route for us. We have a huge amount of equity in our home and can be debt free in less than 8 years. Then we can put all that money into savings and have a net worth of at least $700,000 at retirement. (not counting retirememt savings).

We thought we wanted to take advantage of this great buyers market, but the more properties we investigate, the more we wonder if we should go that route. For example, we would have to pull $$ out of our home (at less than 5% interest) to buy into a multifamliy property.

We have found a great triplex in a decent area that has great cash flow. However when I compare the numbers for where we'll be in 12 years - (stay with what we're doing now, or invest) - the numbers for total net worth are very close. So what's the point in having all the hassle of dealing with a rental?

If we buy this triplex, we could have it paid off in 10 years and have steady cash flow, but we would still owe on our home at retirement. I'm not sure how much debt I want to have when we retire.

How much does appreciation factor into your decision? I see it was brought up in another topic recently. We are in Southern California, and as an example, our home was purchased in 2001 for $220,000, then soared to a vaule of $550,000 at the height of the market, and now we'd probably get about $350-400,000 out of it.

If we could buy this triplex and I could count on more appreciation, then I might be tempted to go ahead and take the plunge. But you can't guarantee a thing in this economy. Crystal Ball, anyone?

Any comments, suggestions, etc would be really helpful!! Thanks!
Kathy