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>My return on the property is driven from the $1 million basis, and I get to keep all of it despite not having much of an equity stake in the property And if t
by forgetsusername 10y ago
>My return on the property is driven from the $1 million basis, and I get to keep all of it despite not having much of an equity stake in the property
And if that property falls to $900,000? Now you owe $1 million on a home worth less; literally throwing away $100,000.
- JoeAltmaier 10y agoYou don't actually lose anything until you sell. A paper loss is a different thing. It has plusses and minuses.
- webmaven 10y agoIf you're willing to employ a "buy and hold" strategy for property to ride out the bottom of the RE market, you should be able to do it just as well with a diversified investment portfolio.
- forgetsusername 10y ago>You don't actually lose anything until you sell. If the value of your asset falls, you've lost net worth. It's preposterous to claim that, even though the price of your home has fallen by half, and you are servicing the mortgage on the old value, that you haven't lost anything. Or that the fact that you can offset capital gains with capital losses somehow makes a plunge in value "worth it". "Paper losses" are losses. The value of the asset isn't based on the price you paid.
- prklmn 10y agoIf you think of it in these terms, that's about two years worth of rent. But as a renter, you have no chance at benefitting from future appreciation. If you think the housing market is going to be in decline from your move in time, then it might be a good idea to rent depending on your time horizon. Over the long term, it has proven to generally not be a good idea.