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re: So all I need to do to afford a $750,000 house
Posted on 3/20/25 at 3:08 pm to SDVTiger
Posted on 3/20/25 at 3:08 pm to SDVTiger
quote:Absolutely because you had to live somewhere. You might have an argument if talking about a second home (since you already have a place to live). If you pay 1000 in rent a month or pay 1000 a house payment+ins+taxes, you're paying 1000 a month.
So in the example presented if you paid principal down and the value stayed at 150k are building equity?
Over 4 years, if you rent you've spent 48K and its gone. If you purchase, you will pay down on the mortgage some amount. Let's say 10K. You have 10K in equity even if the home did not increase in value.
2
Posted on 3/20/25 at 3:08 pm to SDVTiger
quote:
So paying down the loan didnt build equity
We needn't talk in hypotheticals here.
We used an interest-only loan within one of our portfolios on a second home using an interbank lending lending rate float for years. Later we transferred to a 5yr fixed arrangement in the high 2%'s. All of which qualified as a portfolio expense from a tax standpoint (those laws recently changed btw). Our real estate equity built nicely. Meanwhile, we invested the money, which we would have used to payoff the home, in the market. That built nicely as well.
Posted on 3/20/25 at 3:12 pm to goldennugget
move to the country and find a more affordable lifestyle.
Posted on 3/20/25 at 3:32 pm to RollTide4547
quote:
Absolutely because you had to live somewhere
Incredible
quote:
You have 10K in equity
No you have 10k of your own money that you paid interest to park into the wall paper of your home
But yes of course you built equity
Posted on 3/20/25 at 3:34 pm to RollTide4547
You must enjoy arguing with idiots.
Of course, you are correct but the third rate mortgage broker can’t see it.
Of course, you are correct but the third rate mortgage broker can’t see it.
Posted on 3/20/25 at 3:46 pm to SDVTiger
quote:Renting, you have all 48K of your money in the wall paper of someone elses home. Perhaps you like that better. Me, I'd rather own. Who knows, the home may appreciate. Renting, if a 200K home appreciates at 5% a year, you're going to have to save 10K a year just to stay even. Saving 10K a year and paying 12K in rent is quite a feat.
No you have 10k of your own money that you paid interest to park into the wall paper of your home
Posted on 3/20/25 at 3:50 pm to RollTide4547
quote:
Renting, you have all 48K of your money in the wall paper of someone elses home
So if you buy a home for 150k and pay principal and the value goes to 100k but you paid in 10k did you build equity?
Posted on 3/20/25 at 4:19 pm to SDVTiger
quote:No.
So if you buy a home for 150k and pay principal and the value goes to 100k but you paid in 10k did you build equity?
Further as most homes are a levered purchase, and somewhat at the bounds of buyer affordability, a drop in value on that scale would be crippling for most owners. Risk-reward at play.
By that token, if folks who could have purchased in 2021 are now on the outside of ownership looking in, they miscalculated risk-reward. It happens.
That is no one's fault. Granted, it is risk intolerance at an age where risk tolerance should be maximized. But no one knows the future. So?
The problem is when blame transference by risk averse folks holds others responsible for ramifications of their own risk averse decisions.
This post was edited on 3/20/25 at 4:21 pm
Posted on 3/20/25 at 4:22 pm to NC_Tigah
quote:
No
Thank you. Paying principal doesnt build equity
wow this was a drawn out process to just say im right Posted on 3/20/25 at 4:25 pm to SDVTiger
quote:
Paying principal doesnt build equity
It does if the property is not a shithole.
You know, like the ones that were linked to earlier.
Posted on 3/20/25 at 4:33 pm to goldennugget
quote:
Is to cancel my Netflix subscription and stop buying lattes and avocado toast?
Then I will be able to afford a house?
Yes, do this for 15-20 years, invest wisely, and you'll be in great shape. Also get rid of the expensive phone, multiple gym memberships, expensive clothes and shoes, etc. Invest, max out Roth IRA (while you can) and 401k. I could go on. But yes, that is the way.
Posted on 3/20/25 at 4:53 pm to SDVTiger
quote:Good Lord.
Thank you. Paying principal doesnt build equity
OF COURSE PAYING PRINCIPAL INCREASES EQUITY
If one makes a terrible purchase decision, initiates with a -35% valuation, and subsequently improves valuation to -10% through personal investment and improved valuation, has one added equity to his original terrible position?
This post was edited on 3/20/25 at 4:55 pm
Posted on 3/20/25 at 4:58 pm to NC_Tigah
quote:
OF COURSE PAYING PRINCIPAL INCREASES EQUITY
Posted on 3/20/25 at 5:00 pm to SDVTiger
quote:
SDVTiger
Posted on 3/20/25 at 5:01 pm to NC_Tigah
You also must enjoy arguing with idiots.
Posted on 3/20/25 at 5:08 pm to roadGator
quote:I'm trying to help him
You also must enjoy arguing with idiots.
Posted on 3/20/25 at 5:20 pm to NC_Tigah
You dont need to help me. We just went through this exercise
Im right about everything. You plus the Alabama/Florida inbreds are wrong
The stupid in this thread has given me a headache
Im right about everything. You plus the Alabama/Florida inbreds are wrong
The stupid in this thread has given me a headache
Posted on 3/20/25 at 5:22 pm to NC_Tigah
Good luck
Posted on 3/20/25 at 5:33 pm to roadGator
quote:
Good luck
Apparently "luck" wont do it
Posted on 3/20/25 at 6:10 pm to NC_Tigah
quote:
By that token, if folks who could have purchased in 2021 are now on the outside of ownership looking in, they miscalculated risk-reward. It happens. That is no one's fault. Granted, it is risk intolerance at an age where risk tolerance should be maximized.
Probably followed the advice spouted by nearly everyone over 50. “Make sure you wait until you can put down 20%. You don’t want to throw money away paying pmi!”
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