Quote:
Originally Posted by Alex from Montreal
To make a profit, you got to trade down (i.e. buy the next house less than the one you sold). Unfortunately people tend do the opposite.
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Who says you have to trade at all?
What if you buy a house and live there until you die?
Say your mortgage is $1500 a month, and you pay it off by the time you retire. That's the equivalent of $1500 a month in your pocket. You would need roughly $350K in treasury bills to earn that kind of interest income.
Plus if you rent for $1500 a month today, in 30 years rent on a comparable property will be more like $3000-4500 per month.
There are so many other advantages I can't even begin to list them here. The most basic of them is you're going to have to pay a monthly nut to live anywhere, and you have to live somewhere. Why would you pay rent instead of paying a mortgage that gives you tax benefits, builds equity, and allows you to realize the appreciation of the property?