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This is very rarely true. The only case where I can think of where you may be right is when real estate is purchased at the top of the market and sold at the bo
by prklmn 10y ago
This is very rarely true. The only case where I can think of where you may be right is when real estate is purchased at the top of the market and sold at the bottom. When you go to sell real estate, it doesn't matter how much equity you have in the property, you will fully collect the gain or absorb the loss resulting from the sale. Equity is usually only relevant when looking at creditworthiness.
- sanswork 10y agoIt isn't that rare actually in major western cities. So you are betting on large increases in property value to offset the loss from front loaded interest payments to make your investment better? That's a gamble.
- prklmn 10y agoThe interest is part of the investment. It gives you control of the property and ability to collect all appreciation. It takes a very minor increase in value to turn a profit if your time horizon is short term. A renter doesn't have anything to show for his or her rent payment and cannot collect any appreciation.
- forgetsusername 10y ago>It takes a very minor increase in value to turn a profit if your time horizon is short term. It's hard to believe that amateurs on this board actually believe house-flipping is a sure thing.