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Biggest Housing Boom In History

OldSchoolBoats

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I’m trapped in my small house, and I’m ok with it. Neighborhood and schools are great, house is cheap to own and maintain, monthly utilities are cheap.

I figure I could make worse compromises in life.
Less is more. We have thought about selling our house and getting back into a single story with a pool. 3200 sq feet, 5 bedrooms and 4.5 baths, is a bitch to keep up with. I hate stairs too.

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LargeOrangeFont

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If you don’t mind me asking, what was did you pay and what was your down payment? I’ll be putting my vette up for sale soon so I can stash some money away for a house, I figure a 450,000 house with 5% down should be under 3,000 a month? If not I guess I have until the next election to save some more lol

Welcome to adulthood.
 

attitude

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You don’t buy a house to sell it in 6 months. Being upside down on a home is a temporary condition. When exactly you buy it determines how long you might be under water.

I bought in 09 and The value sunk below what I paid in 11-12. I have $400k in equity now, but simply bought in 09 to control my monthly costs. My monthly all in is 1/3 less than what it would rent for today.
Tell me if I’m wrong but let’s say I buy a house now for 450,000 let’s say it drops 15% in value when the market “corrects” its self in 2 years. If I would have waited I would have payed 50,000 in rent in 2 years but the house that I want to buy would have lost 67,000 in value, I also would have a lot lower monthly payment. How is that worse than buying now?
 

LargeOrangeFont

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Less is more. We have thought about selling our house and getting back into a single story with a pool. 3200 sq feet, 5 bedrooms and 4.5 baths, is a bitch to keep up with. I hate stairs too.

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Honestly I like that that the small house keeps us living relatively light. If I had a 4 car garage here and a pool, I’d never need to leave :)
 

attitude

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Welcome to adulthood.
I could keep the vette if I wanted but I just drove it 5 miles to my parents house and that’s the first time I’ve driven it in 6 weeks lol. Since it got hit it’s now not scarred in my eyes. I’ll just buy a c6z carbon in a couple years.
 

LargeOrangeFont

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Tell me if I’m wrong but let’s say I buy a house now for 450,000 let’s say it drops 15% in value when the market “corrects” its self in 2 years. If I would have waited I would have payed 50,000 in rent in 2 years but the house that I want to buy would have lost 67,000 in value, I also would have a lot lower monthly payment. How is that worse than buying now?

What if it goes up another 10% before it drops 15%?

You aren’t factoring in your savings at tax time either. Your example is an absolute best case that you do everything at the exact right time, and time a sizable market dip perfectly, and you are still just basically breaking even.
 

OldSchoolBoats

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Tell me if I’m wrong but let’s say I buy a house now for 450,000 let’s say it drops 15% in value when the market “corrects” its self in 2 years. If I would have waited I would have payed 50,000 in rent in 2 years but the house that I want to buy would have lost 67,000 in value, I also would have a lot lower monthly payment. How is that worse than buying now?
Rents keep going up, that's why. Also, it is yours.



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Bobby V

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LOL or havasu. Thats what we did when we were 24. Average house 75k.
I was 26 when I bought in Havasu. 7500 for the lot and 39k for a new 2 bedroom. Right down the street from the house 2FF is trying to sell for over 500K..:D
 

LargeOrangeFont

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I could keep the vette if I wanted but I just drove it 5 miles to my parents house and that’s the first time I’ve driven it in 6 weeks lol. Since it got hit it’s now not scarred in my eyes. I’ll just buy a c6z carbon in a couple years.

Priorities are a bitch. :)
 

Cdog

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I’m trapped in my small house, and I’m ok with it. Neighborhood and schools are great, house is cheap to own and maintain, monthly utilities are cheap.

I figure I could make worse compromises in life.


Have you ever seen this is 40 ?
The bar scene with Green Day . Lol!

 

LargeOrangeFont

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I was 26 when I bought in Havasu. 7500 for the lot and 39k for a new 2 bedroom. Right down the street from the house 2FF is trying to sell for over 500K..:D

I was 31, $160k for a 15 year old 3 bedroom, down the street from another house 2FF built.
 

OldSchoolBoats

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I grew up in hemet and i turned out ok.... Havasu would have been an upgrade BABY
Lots of flip deals in Hemet still. That is a market that will gain 10% next year.

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attitude

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What if it goes up another 10% before it drops 15%?

You aren’t factoring in your savings at tax time either. Your example is an absolute best case that you do everything at the exact right time, and time a sizable market dip perfectly, and you are still just basically breaking even.
It’s already dropped 2.2% since August
 

attitude

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Rents keep going up, that's why. Also, it is yours.



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That’s not the problem, it’s none one wants to rent to me because I’m white lol. That’s what the realtor for this house told me when I told her home many houses I get denied from:rolleyes:
 

lbhsbz

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What if it goes up another 10% before it drops 15%?

You aren’t factoring in your savings at tax time either. Your example is an absolute best case that you do everything at the exact right time, and time a sizable market dip perfectly, and you are still just basically breaking even.

Nor the tax write offs either.
 

hallett21

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That’s not the problem, it’s none one wants to rent to me because I’m white lol. That’s what the realtor for this house told me when I told her home many houses I get denied from:rolleyes:

Pms sent


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LargeOrangeFont

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It’s already dropped 2.2% since August

It’s gone up 2% here since August. If your goal is to buy your first home as you are pissing away money on rent.. you are doing just that... pissing your money away. That said, owning is not for everyone.

Literally the only people in modern times that have been upside down on their home values in So Cal for more than a couple years are people that bought in 2005 and 2006.
 

LargeOrangeFont

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My drean is a massive view house in Calabasas

I cant afford it so Im going to whine that life isn't fair and maybe my dream will come true.

Just identify as another gender and your dreams will come true.
 

brgrcru

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That is my point.. 30 to 40 years ago you could move somewhere with the most opportunity and afford to live there. Now you are only buying where you can afford to live. I make more than my parents made at the same age, and they have noted the difference that has taken place in the last few decades.

bought our first house 30 years ago.
12% 30 year loan . could not live where I wanted too.
had to move way out. where I could afford a 126k house.
making 60k a year back then
not everyone could buy a house .
had to come up with 20% down.

the worst part that 1990 hit and a recession.
plus a drought and the gulf war. gas went from .99 a gallon to over 2.50 gallon overnight

the housing market collapsed. we lost our ass. 6 month later , the same house went for 85k at 4.5 %.
bank would not re-fi us, as were up side down.
so we stuck it out like a good human . until we payed enough off to re-fi and then sold it.

live was a bitch at 24
just married, baby on the way , started a new business, and bought a house, right before a recession .
who knew? was broke. breaking piggy bank open to buy milk as some AR checks have not came in , or bounced.

yes life sucked at that time. working 12/15 hours or all night to make it.

just saying it wasn't much easier back then.
 

jetur

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Most of the home builders I work for are publicly traded. When markets take dives projects seem to go on hold. As far as the millennials go we have been building a new product for them for several years. It's a townhouse on about an 1/8th of a acre. Really cheap starter homes.
 

77charger

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So housing maybe booming but Millennials can’t afford it. We have the same purchasing power as we did 40 years ago. Wages have not kept up with inflation. Couple that with student loans and 1000 car payments younger generations do not have the money to afford a house unless it’s in the Midwest. But here in so cal not so much and places like Chicago, LA, NYC, SF, ect... I see housing booming for gen x and baby boomers still
Callled sacrifice might not need that 80k truck or car,can skip the clubs,vacations or whatever else.We gave up some things when we bought our home at 27 years old had we not we would have been priced out in the next 6 months and now have good equity.
 

LargeOrangeFont

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bought our first house 30 years ago.
12% 30 year loan . could not live where I wanted too.
had to move way out. where I could afford a 126k house.
making 60k a year back then
not everyone could buy a house .
had to come up with 20% down.

the worst part that 1990 hit and a recession.
plus a drought and the gulf war. gas went from .99 a gallon to over 2.50 gallon overnight

the housing market collapsed. we lost our ass. 6 month later , the same house went for 85k at 4.5 %.
bank would not re-fi us, as were up side down.
so we stuck it out like a good human . until we payed enough off to re-fi and then sold it.

live was a bitch at 24
just married, baby on the way , started a new business, and bought a house, right before a recession .
who knew? was broke. breaking piggy bank open to buy milk as some AR checks have not came in , or bounced.

yes life sucked at that time. working 12/15 hours or all night to make it.

just saying it wasn't much easier back then.

No one is saying it was easy. You still have to live where you can afford. But show me where you can buy a house for 2x your yearly income in So Cal.. that is all I am saying here. The options are fewer for younger people just starting out.

Commuting from Barstow to OC is not an option :)
 
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OldSchoolBoats

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Most of the home builders I work for are publicly traded. When markets take dives projects seem to go on hold. As far as the millennials go we have been building a new product for them for several years. It's a townhouse on about an 1/8th of a acre. Really cheap starter homes.
A lot of that happening in the southeast. The builders are buying 5-10 acres and building small, attached and detached townhomes that share a common area. Not really a new idea, actually a lot of property in Huntington Beach that is designed the same way.

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DB / HAV

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Best advice I gave my kids (27 & 29 now), listen to Dave Ramsey! They both own homes in so cal with no debt except their mortgages. They don’t have a bunch of toys or fancy cars. It is doable. Listen to him for a week...
 

OldSchoolBoats

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Best advice I gave my kids (27 & 29 now), listen to Dave Ramsey! They both own homes in so cal with no debt except their mortgages. They don’t have a bunch of toys or fancy cars. It is doable. Listen to him for a week...
Although I don't agree much with Dave, I do believe in living payment free, that's why we sold our boat. Paid off a $710 / month SUV payment and all CC's. Just have my 2 house payments and a zero interest loan on my Fusion with 34 payments left.

Yes, I will probably buy a new boat and yes, I will finance part of it, but with the way we have set things up, I will only hold that loan for 3 years before it is paid off.

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jetur

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A lot of that happening in the southeast. The builders are buying 5-10 acres and building small, attached and detached townhomes that share a common area. Not really a new idea, actually a lot of property in Huntington Beach that is designed the same way.

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Yeah I know they have been around forever. I think it's funny how a lot of kids now think they are moving into their dream home right out of the gate. I even know some that refuse to leave their parents home because they can't afford one like it.
 

DB / HAV

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Although I don't agree much with Dave, I do believe in living payment free, that's why we sold our boat. Paid off a $710 / month SUV payment and all CC's. Just have my 2 house payments and a zero interest loan on my Fusion with 34 payments left.

Yes, I will probably buy a new boat and yes, I will finance part of it, but with the way we have set things up, I will only hold that loan for 3 years before it is paid off.

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It’s mostly about not allowing the banks or rents own you.
 

bowtiejunkie

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It’s gone up 2% here since August. If your goal is to buy your first home as you are pissing away money on rent.. you are doing just that... pissing your money away. That said, owning is not for everyone.

Literally the only people in modern times that have been upside down on their home values in So Cal for more than a couple years are people that bought in 2005 and 2006.

I bought in 2006. Wrong, time, wrong place, wrong city. F-in wrong everything. Bought for $312k, I’d be lucky to get $290k (we’ll know soon enough as we bought a house north of Dallas and will be selling soon). Add in taxes, insurance, maintenance, upgrades ($20k+), subtract effects of tax write-offs, I’m pretty sure I would have done better renting. Break even at best. It’s great that the wife and I were landlords so to speak, but it seriously sucks. I made a killing on stocks in the same period, but this house has been shit. Maybe something good will work out in Dallas. Where we are at is quicksand in terms of real estate location (at least for those who purchased in 2006).
 

brgrcru

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No one is saying it was easy. You still have to live where you can afford. But show me where you can buy a house for 2x your yearly income in So Cal.. that is all I am saying here. The options are fewer for younger people just starting out.

Commuting from Barstow to OC is not an option :)

Barstow is not bad if you work in Victorville. lol
Barstow has Newberry springs with many private waterski lakes. :)

I know what your saying. its never the right time to buy a house or have kids. but you do it and find away.

Funny, I was just telling my 29 year old daughter who is a Rn nurse. the same thing.
 

OldSchoolBoats

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Yeah I know they have been around forever. I think it's funny how a lot of kids now think they are moving into their dream home right out of the gate. I even know some that refuse to leave their parents home because they can't afford one like it.
What's crazy is that is why we moved to Temecula......lol. I could have bought a house in Costa Mesa back in 2012 but we wanted more space, upgrades, big backyard....yada yada. So I commuted to Orange County for 4 years.

Now I look back and if I would have bought that house in Costa Mesa then, I could have sold it now and not only paid cash for the house I live in now, but also could have put money in the bank........I dont regret it though, we love it here. Schools are amazing and it is a much better place to raise kids than Costa Mesa would have been.

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Your ad here

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Tell me if I’m wrong but let’s say I buy a house now for 450,000 let’s say it drops 15% in value when the market “corrects” its self in 2 years. If I would have waited I would have payed 50,000 in rent in 2 years but the house that I want to buy would have lost 67,000 in value, I also would have a lot lower monthly payment. How is that worse than buying now?
You are over thinking it. Figure out what you need and pursue it. There will be sacrifices. Just don't become a slave to the house. Also, don't rely on renting rooms to make the mortgage.
 

attitude

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You are over thinking it. Figure out what you need and pursue it. There will be sacrifices. Just don't become a slave to the house. Also, don't rely on renting rooms to make the mortgage.
I won’t rent rooms because of my son, I already had my friends try and do that when I originally moved out lol
 

shintoooo

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I won’t rent rooms because of my son, I already had my friends try and do that when I originally moved out lol

You’re young. Don’t worry about what anyone else is doing. Just do what you have to do, work hard, take care of your family and your time will come. Been there done that. I thought I could never buy a house when I was your age. Things change if you keep working hard and have a plan in place. Just keep chippin away.
 

attitude

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You’re young. Don’t worry about what anyone else is doing. Just do what you have to do, work hard, take care of your family and your time will come. Been there done that. I thought I could never buy a house when I was your age. Things change if you keep working hard and have a plan in place. Just keep chippin away.
Thanks for the kind words, I’m just happy I’m able to to support my family whether I own our house or not.:)
 

Deja_Vu

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Don’t try to time the market... you end up losing by sitting on the sidelines trying to pick an insertion point that may never materialize.

You have to have a place to live so it makes sense to own. Mostly for the rent control and stability for the kids. Find a single story place on a quiet street in a good school district and you’re golden.

For me the Tax advantages aren’t as big as they once were post Trump. I couldn’t even itemize last year. The biggest reason to own a home is the build up of equity over time.
 

HB2Havasu

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I’m not going off the internet, I’m going off of two people in our glamis group who make they’re living off real estate. I’m not waiting for 750k houses to be worth 350k but I am waiting for a 10-20% correction.

Your not going to start seeing any corrections until the 2024 Presidential election approaches. Homes may be another 30% by then, so you would be out of pocket 10%-20%, lol. If you need a roof over your head the next 30 years then buy a home and stop paying somebody else’s mortgage payment. Your paying one way or another!!!
 

JM21

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I bought in 2006. Wrong, time, wrong place, wrong city. F-in wrong everything. Bought for $312k, I’d be lucky to get $290k (we’ll know soon enough as we bought a house north of Dallas and will be selling soon). Add in taxes, insurance, maintenance, upgrades ($20k+), subtract effects of tax write-offs, I’m pretty sure I would have done better renting. Break even at best. It’s great that the wife and I were landlords so to speak, but it seriously sucks. I made a killing on stocks in the same period, but this house has been shit. Maybe something good will work out in Dallas. Where we are at is quicksand in terms of real estate location (at least for those who purchased in 2006).

Where do you live currently?


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Cole Trickle

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I bought in 2006. Wrong, time, wrong place, wrong city. F-in wrong everything. Bought for $312k, I’d be lucky to get $290k (we’ll know soon enough as we bought a house north of Dallas and will be selling soon). Add in taxes, insurance, maintenance, upgrades ($20k+), subtract effects of tax write-offs, I’m pretty sure I would have done better renting. Break even at best. It’s great that the wife and I were landlords so to speak, but it seriously sucks. I made a killing on stocks in the same period, but this house has been shit. Maybe something good will work out in Dallas. Where we are at is quicksand in terms of real estate location (at least for those who purchased in 2006).

Right there with you....

Bought my house in Corona in may 06...540K and I would be lucky to sell it for 525K after dumping a bunch of $$$ into it 13.5 years later.

It is what it is but I would probably be way ahead had I rented the whole time as my mortgage is over market value.

I hope to have it payed off in less than 11 years.....Like the house and love the area and I could only imagine if timing worked out where I could have bought that same house for 275K in 2011 with the 80K I put down...lol
 

bentprops

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Right there with you....

Bought my house in Corona in may 06...540K and I would be lucky to sell it for 525K after dumping a bunch of $$$ into it 13.5 years later.

It is what it is but I would probably be way ahead had I rented the whole time as my mortgage is over market value.

I hope to have it payed off in less than 11 years.....Like the house and love the area and I could only imagine if timing worked out where I could have bought that same house for 275K in 2011 with the 80K I put down...lol

Very interesting thread,
As you can see from the above your house is not an asset, a asset puts money in your pocket liabilities take it out. When you live in your home the only way you can make money is when you sell it and most likely cause of the expense of owning you will just break even. When you live in your house you can only make money on the appreciation of the house. If you own and rent it you make it 4 ways appreciation, deprecation, amortization and cash flow.

There is nothing wrong with owning or renting or even owning and renting. They both have advantages and disadvantages. from a wealth building stand point you are better renting than owning. If the house is under about 175k your good owning, above that your better renting. Here is why. (RTV) Rent to value the more expensive the house the cheaper the rent. Example you can rent a 1ml home for 4 to 5k per month. The RTV is .4 to .5% I buy homes all day that rent @RTV 1% im in escrow on one right now rents for 1275. on a 132k purchase price. example lets say you have 1ml, instead of buying a 1 million house you buy 10 100k house that rent for (1%) 1k per month so that's 10k per month income. Now you rent the 1ml house for 5k and pocket the other 5k and when the water heater, AC, roof or 100 other things fail that's the owners problem.

Where the market is heading, this one is more complicated than in times past. I also owned personal home in Corona but sold in July 2005 expecting a drastic correction. After I sold I rented and waited, was one of the lucky few. I give 100% credit to God on that, being just another punk kid at that time I didn't have a clue about markets but knew something was not right. Since then I have made it a personal goal to educate myself on things financial. To make it simple there are 2 main drivers of the economy energy and debit. If you understand these 2 you can kinda predict the direction. Right now the expansion of debit is stalling.
That is why Trump is screaming at the fed to reduce rates. You reduce rates and more money will get borrowed. They have also reduced the borrowing standards
unless your a multi millionaire and want to buy assets than they have made it hard as fuk, otherwise no money no credit no problem. Can the market keeping going up? Sure but I think its 20% 80% risk ratio. Baby boomers are down sizing, gen x is busy buying boats and trucks, millennial's are maxed out with student loans. So where is the driver? 2 things control housing prices, income and interest rates. Do you suspect income to rise? Real inflation is 8% you will have to rise faster than that. Do you expect rates do go down further? They will have to go down further than in the past.
I predict 25% correction. I suspect another great depression.

Why I suspect a another Great Depression.
I recommend you do your own research on this but for the last 10 years we have followed the same pattern of the last great depression.
Ever heard of the depression of 1920? Google it. in 1920 commodity prices crashed. The government stepped in with a easy money policy to reflate commodity prices. Instead the money flowed into financial assets like stocks and real estate. (sound familiar?) then the crash of oct 1929. Great depression followed.
I hope im wrong.

To all you that keep bringing up interest rates. todays 4% is the same as the 1980's 15% it all based on inflation
4% rate with 8% inflation is a real rate of 4
15% rate with 19% inflation is a real rate of 4

Replace the word want with need in your personal vocabulary
Focus on your needs,
Use debit to buy income.
Don't save toilet paper with ink on it. Trade that toilet paper for real assets.

OH did you know the fed just stared QE again? More toilet paper coming to a bank near you're.

Give a man a gun and he will rob a bank, give a man a bank and he will rob the world.
 

pronstar

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Very interesting thread,
As you can see from the above your house is not an asset, a asset puts money in your pocket liabilities take it out. When you live in your home the only way you can make money is when you sell it and most likely cause of the expense of owning you will just break even. When you live in your house you can only make money on the appreciation of the house. If you own and rent it you make it 4 ways appreciation, deprecation, amortization and cash flow.

There is nothing wrong with owning or renting or even owning and renting. They both have advantages and disadvantages. from a wealth building stand point you are better renting than owning. If the house is under about 175k your good owning, above that your better renting. Here is why. (RTV) Rent to value the more expensive the house the cheaper the rent. Example you can rent a 1ml home for 4 to 5k per month. The RTV is .4 to .5% I buy homes all day that rent @RTV 1% im in escrow on one right now rents for 1275. on a 132k purchase price. example lets say you have 1ml, instead of buying a 1 million house you buy 10 100k house that rent for (1%) 1k per month so that's 10k per month income. Now you rent the 1ml house for 5k and pocket the other 5k and when the water heater, AC, roof or 100 other things fail that's the owners problem.


So true...most people think their house is an asset.

And it is, the mortgage is listed as an asset on the bank's balance sheet.
For the howmeoner, it's a liability.

There are good reasons to buy, and also good reasons to rent.
It all depends on a ton of different factors.
 

RCDave

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So true...most people think their house is an asset.

And it is, the mortgage is listed as an asset on the bank's balance sheet.
For the howmeoner, it's a liability.

There are good reasons to buy, and also good reasons to rent.
It all depends on a ton of different factors.

Yup. Just ignore realtors and mortgage bankers, lol . Their perspectives can be tainted by conflicts of interest
 
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