Originally Posted by mathjak107
its all about having a retirement income to pay for your lifestyle. it dosnt matter how you fund housing costs whether you buy or rent...
if instead of buying a home you bought a rental property instead that gave you enough to pay your rent every year and maybe even a little extra each month are you at a disadvantage to a homeowner by renting? of course not... and if it wasnt a rental property but your investment portfolio that you saved instead of buying a house that was generating that income is it any different?.
here in nyc my first home in 1987 was 169,000... today its 440,000.... that same 169,000 invested in the fidelity insight newsletter i have been using since then is worth 1.8 million.
Thank you. What percentage of return is that? I've read that it's not wise to expect to be able to get more than 6-8% a year in t4he market, and look out for the down side...
Did you get a loan for the 169K ormost of it? How does that change the picture?
im not sure what the percentage is i never worked it out.... the above was no loan and we are just talking pure appreciation so it wouldnt matter in either case.... just tracking a dollar for a dollar.
no one knows how any of the markets will do in the future and thats my point.. you cant compare renting to buying very easy because of that wild card. in the past depending on the area of the country renting and investing in other asset classes blew away buying a home on a sheer appreciation gauge ..
the problem is for the renter its all about having the discipline to invest the down payment money and to invest that difference saved each month where renting is cheaper then buying for as much as a decade before the lines cross.
how many will have that discipline? not many im sure and so they would be ahead with the house.
all i was trying to bring out here was that things like the famous "tax deduction" are really not a good thing... people tend to think of it like its giving them something back from their paycheck. they dont see it as an expense ,its like spending 3 bucks at a carnaval to win a 1 buck prize...
homeowners tend to only thing in terms of they have a house at the end , the renter dosnt but as you see the real deal is what did the renter invest in,,, you may have the house, he may have a big pile of money that can support his lifestyle of renting and have enough to buy 2 houses left over.
if you can afford a house then buy the house for all those things a house provides you with but dont count financially as one of those benefits as no one knows how that may work out.
there are so many failed retirements because folks are house rich and cash poor. they have so much wrapped up in their home and it was at the expense of investing in faster growing assets that they are now miserable.
while you can reverse mortgage a home those crazy fees and the limited credit line can leave you very early on with no equity and no more payments coming in...