4 ms·

Home price appreciation depends on location, so it's hard to generalize. Also unlike stock investments, a mortgage gives you massive leverage.

• lewisl9029 10y ago
  The massive leverage is precisely why I would never buy a house on a mortgage. With the 10x+ leverage most mortgages give you these days, it's absolutely terrifying how quickly you can accumulate losses of multiple times your principal. Definitely not what I'm looking for in a long term investment.
  • bk_geek 10y ago
    Not saying it's risk free, but smart real estate investments can crush stock market returns precisely due to that massive leverage
    • lewisl9029 10y ago
      Yes absolutely. Everybody has a different appetite for risk. If you understand the risks involved and can tolerate the downside potential, a 10x+ leveraged mortgage has the potential to be one of the most lucrative investments opportunities available, due to the massive leverage it offers at dirt cheap interest rates. What I'm fearful about is that the large majority of mortgage buyers don't see it as a 10x leveraged investment, nor do they understand how badly the amplified price fluctuations of a 10x leveraged investment could hit them if there was even a tiny dip in the price of their homes, let alone another housing crisis like 2007.