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Err, the first question we should be asking you is "why don't you have a mortgage". Unless you were given a house and have a chest full of gold bars, you are p

by runT1ME 17y ago

Err, the first question we should be asking you is "why don't you have a mortgage". Unless you were given a house and have a chest full of gold bars, you are probably living off the income of interest, so you're still paying income taxes. Get a mortgage. Its a tax write-off, along with the fact that RE is a pretty good overall investment, and very 'cheap' money. Hell, if you have to, HELOC your place and put that money into a higher yield investment.

CWuestefeld 17y ago
Get a mortgage. Its a tax write-off Not so much, if you're in AMT-land (and it seems like the poster is). But even so, I don't understand why people (you're far from the only one) say this. For every dollar you save in taxes, you're paying two dollars to the bank. How can that possibly be smart? Whether to invest in Real Estate is an entirely separate question. And one that I also think is a poor choice in this age. I base that on the current price of homes relative to their historic levels. They're still expensive.
- shpxnvz 17y ago
  But even so, I don't understand why people (you're far from the only one) say this. For every dollar you save in taxes, you're paying two dollars to the bank. How can that possibly be smart? That plan is to take the money you have invested in your personal dwelling, and leverage a government subsidized low-interest loan (mortgage with deductible interest) to re-invest for a higher return. Obviously it doesn't make sense for everyone - it requires that you have a low enough paper income that you aren't in AMT territory (and can thus deduct your interest) and that you are comfortable investing that money in something higher-return and presumably higher-risk, though the last few years have shown that your personal dwelling isn't necessarily a low-risk investment either. The short answer is that for every two dollars you pay to the bank in interest, you should be making more than two dollars in return on your subsequent investment.

by runT1ME 17y ago

CWuestefeld 17y ago

Get a mortgage. Its a tax write-off Not so much, if you're in AMT-land (and it seems like the poster is). But even so, I don't understand why people (you're far from the only one) say this. For every dollar you save in taxes, you're paying two dollars to the bank. How can that possibly be smart? Whether to invest in Real Estate is an entirely separate question. And one that I also think is a poor choice in this age. I base that on the current price of homes relative to their historic levels. They're still expensive.

shpxnvz 17y ago
But even so, I don't understand why people (you're far from the only one) say this. For every dollar you save in taxes, you're paying two dollars to the bank. How can that possibly be smart? That plan is to take the money you have invested in your personal dwelling, and leverage a government subsidized low-interest loan (mortgage with deductible interest) to re-invest for a higher return. Obviously it doesn't make sense for everyone - it requires that you have a low enough paper income that you aren't in AMT territory (and can thus deduct your interest) and that you are comfortable investing that money in something higher-return and presumably higher-risk, though the last few years have shown that your personal dwelling isn't necessarily a low-risk investment either. The short answer is that for every two dollars you pay to the bank in interest, you should be making more than two dollars in return on your subsequent investment.