Quote:
Originally Posted by Mike33
Moral of the story: if you're making real money in real estate, you're not doing it using the house that you live in. You're doing it with rental properties, developing, or fixing & flipping houses frequently, or a combination thereof. The house you live in is for your own satisfaction and you're not banking on it to make you any money.
However, I think most people would benefit from home ownership because as somebody said, it's a forced savings account. Most people will not save money or invest successfully. In the US, it's a paycheck-to-paycheck and credit card debt lifestyle so very few will save or invest. Being able to sell one's house after 25 years or live in it with the mortage all paid off, is ideal for most people.
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true but it is a LOONG term savings account with the "payoff" only happening several years down the road. Go look at your amortization schedule, say you have a 1000K a month note. Your first year you might pay 10K to interest and 2K to principle (equity). If you had repairs on the house (no value building repairs), by the time you pay property tax, insurance, etc... i doubt you really saving much if anything. If you do a 30 year loan you really need to stay in that house 20+ years before you would really start saving an significant amount of money. And you know how most people are, buy a house, stay in it for 5 years, sell it buy bigger house, etc... they are NEVER getting to the sweet spot in the amortization schedule, they are always on the front end of it where they pay like 90% interest....
something to take into consideration.