« First « Previous Comments 65 - 69 of 69 Search these comments
#3.) Is the decline in value worth the tax savings? 5% drop per year on a million dollar house is $50K the first year.....
I mentioned this so many times before. Even seasoned bulls do underestimate the compounding effect of that loss over the period of loan(probably 30 years) - in some cases,too much focused on positive cash flow. In this case a loss of $50K,how much would that money have made if you had that money in your hand and invested else where - over the period of 30 years :)
Why are people who can't afford a house so desperate to obtain 30 yrs of debt?
It's because there are a lot or really stupid people out there. Always have been and always will be.
#3.) Is the decline in value worth the tax savings? 5% drop per year on a million dollar house is $50K the first year.....
I mentioned this so many times before. Even seasoned bulls do underestimate the compounding effect of that loss over the period of loan(probably 30 years) - is some cases,too much focused on positive cash flow. In this case a loss of $50K,how much would that money have made if you had that money in your hand and invested else where. :)
Yep. Opportunity cost is a bitch when you're on the wrong side of the decision.
I also have a hard time understanding why people buy large houses to begin with. No one, and I mean not a single married couple without kids needs a 2,000+ square foot home. It's absolutely absurd why anyone needs that much space except to store stuff/junk that they've acquired throughout their life. Even with 2 young kids, you don't need a 2,000 square foot house. The only time you actually might need that kind of space is when the kids are 12-18 and young adults that need privacy, etc. But that is only 6-8 years. Once they are off in college, you don't need a big house. People let their STUFF determine how big a house they need to live in.
Yep. Opportunity cost is a bitch when you're on the wrong side of the decision.
I also have a hard time understanding why people buy large houses to begin with. No one, and I mean not a single married couple without kids needs a 2,000+ square foot home. It's absolutely absurd why anyone needs that much space except to store stuff/junk that they've acquired throughout their life. Even with 2 young kids, you don't need a 2,000 square foot house. The only time you actually might need that kind of space is when the kids are 12-18 and young adults that need privacy, etc. But that is only 6-8 years. Once they are off in college, you don't need a big house. People let their STUFF determine how big a house they need to live in.
You need to watch a few episodes of Hoarders.
Even now, almost everyone mortgaging a house in high priced coastal CA is doing so because they believe its a great investment. You might not get people to publicly admit it
I'm not sure how you know what almost everyone in high priced coastal CA thinks. Regardless, they are likely looking at the rent vs buy over a longer time period and not solely capital appreciation of the house vs. other investments.
We bought because we got sick of giving away thousands of dollars each year not only in rent but taxes as well. We have two six figure incomes and each year it's more brutal than the last.
Funny, I sold because I got tired of losing equity year over year and paying property taxes. Like you we have two six income figures and each year now is better than the last rather than worse when we owned. ;)
« First « Previous Comments 65 - 69 of 69 Search these comments
I notice many postings in online forums from people who are "frustrated" at being unable to mortgage a home in Southern California.
Inevitably, these are people with minimal savings using an FHA backed 3.5% down loan looking for homes at investor cash prices in the better neighborhoods in LA County.
So question....why havn't the outdated notions of "rent is like throwing money away" disapated? Why such a complete desperation to mortgage a home you can't really afford?
#housing