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Old 11-24-2010, 04:55 PM  
TidalWave
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Join Date: Sep 2007
Location: Los Angeles
Posts: 2,706
Quote:
Originally Posted by DaddyHalbucks View Post
A house is a necessity --but it is not an investment.

Investments kick off cash, they don't consume it.

Appreciation = cash
Equity = Cash

Equity in a house allows you to have both the asset of the house itself, as well as borrow against it for currently low interest rates.
When you sell your house, you get all the money back you paid into it. When you rent, you move to a new place, you don't get jack shit.


So lets see... spend $2000/month renting and leave in 2 years with $0.
Or buy a house for $2000/month and in 2 years get $48,000 back (minimum)


Or buy a house cash for $350K.
Sit on it, pay no rent, get appreciation all on its own in the backend.
Take out a HELOC at 3% and use the cash to invest in further opportunities that return more than 3%.
Guess what?
That house is now a 2-pronged investment. You make money on the house it self, and the equity makes you money else where as well.

So that original $350K is now making you money (a large amount of it) in 2 different places at the same time.
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Last edited by TidalWave; 11-24-2010 at 04:58 PM..
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