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Even if your house ends up being less than you bought it for you still have a house. Assuming you want to live in the same area long term it seems wiser to fini

Even if your house ends up being less than you bought it for you still have a house. Assuming you want to live in the same area long term it seems wiser to finish a mortgage and be left with a house that's worth less than you paid for it versus paying rent for the same amount of time and ending up with nothing.

astura 8y ago
I think you're ignoring the significant carrying costs of a house. My house last year had over $11,000 in carrying costs in just taxes, insurance,and interest. Never minding the upkeep and repairs (which are significant yet difficult to estimate). There's other hidden costs like opportunity cost, the return on investment you'd be getting if you didn't have that money tied up in your house.
- toomuchtodo 8y ago
  Houses have almost always kept ahead of inflation, and carrying expenses replace rent.
  - astura 8y ago
    Read the post I'm replying to, we're talking about a house that went DOWN in value.
    - toomuchtodo 8y ago
      I did. It’s extremely rare for real estate to decline in value, and walking away from the property is always an option if it has (or a short sale, which is must less detrimental on your credit).
      - TheCoelacanth 8y ago
        > It’s extremely rare for real estate to decline in value You and I must have very different ideas of what the word "extremely" means. > walking away from the property is always an option That is only true in twelve states. In the other 38, the lender can sue you to recover the difference between the house's value and what you owe even after they foreclose.
        toomuchtodo 8y ago
        As I mention above, you need to do your due diligence. Investing without knowing the rules is fraught with peril. I only use non-recourse mortgages when investing in real estate. YMMV.
        TheCoelacanth 8y ago
        The mere fact that you are looking at real estate as an investment rather than as a place to live indicates that you have far more financial resources than a typical person. For a typical person it is not a realistic option to discard their entire social network and move halfway across the country just to get some more favorable mortgage laws.
        toomuchtodo 8y ago
        You don't have to live somewhere with non-recourse mortgages. To get started, you only need 3% down, an FHA mortgage, and a 4-plex that cashflows slightly. You then eventually refi that with something more conventional and move on to your next property. Real estate is only one investment vehicle where you don't need a large amount of capital to realize substantial cash flows. Whenever possible, seek out leverage opportunities.
        TheCoelacanth 8y ago
        You don't get to choose where you are born or grow up. You are effectively suggesting that people move a thousand miles away from every single person that they know just to get more favorable mortgage laws. That is not doable without starting from a position of privilege.
        JoeAltmaier 8y ago
        As investment, you don't actually have to live where you are buying. I have a relative 2000 miles away that buys condos in my city as investments. My wife researches them, reports back and they make a buying decision. There's a favorable situation here and they're taking advantage of it. Not by 'privilege'; by smart investing.
      - astura 8y ago
        Even if it were true (and it's not[1]), the topic at hand is a hypothetical case where "your house ends up being less than you bought it" and that's what I was directly replying to. If you lose money on the sale price is (almost certainly) not even close to the amount of money you have to spend just to own the house. [1] I personally know at least three people who sold houses for less than the bought them 7-10 years later. My parents have owned their house for 25 years and while the dollar value went up it hasn't kept pace with inflation (recently got three appraisals) even though they have cared for it and even added an extra bathroom.
shoo 8y ago
It depends. On parameters like interest rates and rates of return on other asset classes and rental prices and inflation. There is opportunity cost - in some circumstances paying cheap rent and investing the difference into other investment asset classes might leave you better off in the long run. See the New York Times rent vs buy thing.

astura 8y ago

I think you're ignoring the significant carrying costs of a house. My house last year had over $11,000 in carrying costs in just taxes, insurance,and interest. Never minding the upkeep and repairs (which are significant yet difficult to estimate). There's other hidden costs like opportunity cost, the return on investment you'd be getting if you didn't have that money tied up in your house.

toomuchtodo 8y ago
Houses have almost always kept ahead of inflation, and carrying expenses replace rent.
- astura 8y ago
  Read the post I'm replying to, we're talking about a house that went DOWN in value.
  - toomuchtodo 8y ago
    I did. It’s extremely rare for real estate to decline in value, and walking away from the property is always an option if it has (or a short sale, which is must less detrimental on your credit).
    - TheCoelacanth 8y ago
      > It’s extremely rare for real estate to decline in value You and I must have very different ideas of what the word "extremely" means. > walking away from the property is always an option That is only true in twelve states. In the other 38, the lender can sue you to recover the difference between the house's value and what you owe even after they foreclose.
      - toomuchtodo 8y ago
        As I mention above, you need to do your due diligence. Investing without knowing the rules is fraught with peril. I only use non-recourse mortgages when investing in real estate. YMMV.
        TheCoelacanth 8y ago
        The mere fact that you are looking at real estate as an investment rather than as a place to live indicates that you have far more financial resources than a typical person. For a typical person it is not a realistic option to discard their entire social network and move halfway across the country just to get some more favorable mortgage laws.
        toomuchtodo 8y ago
        You don't have to live somewhere with non-recourse mortgages. To get started, you only need 3% down, an FHA mortgage, and a 4-plex that cashflows slightly. You then eventually refi that with something more conventional and move on to your next property. Real estate is only one investment vehicle where you don't need a large amount of capital to realize substantial cash flows. Whenever possible, seek out leverage opportunities.
        TheCoelacanth 8y ago
        You don't get to choose where you are born or grow up. You are effectively suggesting that people move a thousand miles away from every single person that they know just to get more favorable mortgage laws. That is not doable without starting from a position of privilege.
        JoeAltmaier 8y ago
        As investment, you don't actually have to live where you are buying. I have a relative 2000 miles away that buys condos in my city as investments. My wife researches them, reports back and they make a buying decision. There's a favorable situation here and they're taking advantage of it. Not by 'privilege'; by smart investing.
    - astura 8y ago
      Even if it were true (and it's not[1]), the topic at hand is a hypothetical case where "your house ends up being less than you bought it" and that's what I was directly replying to. If you lose money on the sale price is (almost certainly) not even close to the amount of money you have to spend just to own the house. [1] I personally know at least three people who sold houses for less than the bought them 7-10 years later. My parents have owned their house for 25 years and while the dollar value went up it hasn't kept pace with inflation (recently got three appraisals) even though they have cared for it and even added an extra bathroom.

shoo 8y ago

It depends. On parameters like interest rates and rates of return on other asset classes and rental prices and inflation. There is opportunity cost - in some circumstances paying cheap rent and investing the difference into other investment asset classes might leave you better off in the long run. See the New York Times rent vs buy thing.