My idea would be for investors to own 49% of a house while the owner occupants own 51%. The owner occupants would have a mortgage covering their 51% share of the purchase price. Since they own 51% of the house ,they could remodel or do whatever they wanted with it, because they would be the majority owners.
I’ve heard of similar plans in which you would have to pay rent to the owner who owns the 49% ,and if you had to do that that would defeat the purpose of trying to reduce the mortgage payment. We would need to change the tax laws to implement something like this.
I know we all have heard stories from parents and grandparents how they bought their first house for $20,000, and it was easily affordable with dad’s paycheck , and Mom could be a stay-at-home mom.
Everyone has their opinion about why housing has become so unaffordable! but we cannot deny that for many families, the mother works because her paycheck is needed to pay the mortgage
A large home used to be 1,600 sf. Now it is much larger.
A large home used to be 1,600 sf. Now it is much larger.
Because all the women in the workforce, increases the labor supply and puts downward pressure on wages, to the point where you have to have both spouses working.
My parents bought their home in 1956 for $11,000. The mortgage was something like $150 a month. Which is pocket money today. But there were months when I was the very youngest of four children when the phone was ringing midway through the month looking for the check.
I think everyone “struggles” at first.
When I was going through my parent’s “papers” I was stunned at their annual salaries. My mom was a teacher and my Dad was a pretty high level manager at the Post Office. I think he topped out in the $40k range and my mom never made more than $22k. I was making their combined salaries when I was 25—almost 40 years ago.
My wife and I had some tight months with our first home...so its ALL relative.
This is a very interesting idea.
“My idea would be for investors to own 49% of a house while the owner occupants own 51%. The owner occupants would have a mortgage covering their 51% share of the purchase price”
Meanwhile, until the house is sold again, what is the 49% investor getting back on their investment? Nothing? A true “investor” would not wait for something, regularly, back on their investment.
And in reality, what you describe is not totally different than a 30 year mortgage itself. For a long period of a mortgage the “owner” holds less of a share (equity) in the house than does the bank/mortgage company. Each earlier mortgage payment is paying more interest and less principle. It takes about 12 years before you start paying off as much or more principle than interest.
A bank/mortgage holder, willing to hold a mortgage for 30 years, to give the buyer “affordable” montly payments, has somewhat made housing more “affordable”. It has also made bigger homes more “affordable” but at the cost of upping home prices generally. That game may have begun to run its course.
That sounds like hell to me!