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To: tortoise

' You would think, but this is not the case in many parts of the country. The culprit is primarily property taxes ...blah, blah, blah"

Except for that ol' resale thingy! I bought my house earlier this year. I pay twice what I was renting for... however, since I bought my house, it's appreciated in value about $30K. I paid just under $200K and 8 months later the same EXACT floorplan house sold up the block for $230K. If I chose to sell I would get nearly the same if not more. How would a rental have done that for me?


330 posted on 11/28/2004 4:48:26 PM PST by AngryPatriot87
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To: AngryPatriot87
I bought my house earlier this year. I pay twice what I was renting for... however, since I bought my house, it's appreciated in value about $30K. I paid just under $200K and 8 months later the same EXACT floorplan house sold up the block for $230K. If I chose to sell I would get nearly the same if not more. How would a rental have done that for me?

Atypical, short-sighted, and not exactly a stunning return on investment in any case. Above average for real estate maybe, but that is not saying much. Also, how much of that $30k is left after you deduct interest payments, property taxes, etc?

As I said in my original post, do the math. A $30k pre-loss return on $200k capital is not huge, but you are paying a premium for the privilege by your own admission (twice rent). And be careful of leveraged positions, you can lose more money than you put in -- it is not all that uncommon among homeowners. Beside the wealth inhibiting aspects of highly leveraged home ownership, it is also risky and hence why I do not generally recommend it. Weakly leveraged or unleveraged home ownership is a favorable shelter on the other hand.

It is great that you have a house and I am happy for you, but don't become blinded to the financial reality of it just because you want it. Houses are generally classified as "shelters" rather than "investments" for a reason, and they are not risk free for most people.

348 posted on 11/28/2004 5:32:43 PM PST by tortoise (All these moments lost in time, like tears in the rain.)
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