Re:Why a house is a terrible investment (2013)
by Simulacra on Sunday April 22, 2018 @10:05PM
(#16899992)
My leverage wasn’t that bad. To close I had to spend about $4,000. No down payment. It’s an FHA 30-year fixed at 3.85%, so I bought really at the bottom of the market. I’ve got a great tenant and about to renew them for another year with no increase in the rent. The income from that has been a god send and I’m net positive on expenditures. I’ve managed to get 3 months ahead on the mortgage payments to account in case I DO have a vacancy and need time to find soenone. I just got extremely lucky. I bought out of a fear of being homeless (for whatever reason) and to secure a foudnation for myself as I grow older. It’s become much more and I’ve learned a helluva lot.
Re:Why a house is a terrible investment (2013)
by asfasgasg on Sunday April 22, 2018 @11:35PM
(#16900335)
I'm sorry, but the numbers you're putting out there indicate that you might be a person who does not understand how to value their investment property. The typical baseline number to have is one of the expected or historical cap rate. The terms of your mortgage and down payment are almost wholly irrelevant. And leverage is often considered good in real estate investing.
Re:Why a house is a terrible investment (2013)
by 8nd9rfi on Sunday April 22, 2018 @09:32PM
(#16899861)
> I made a lucky financial decision
Also known as speculation
Re:Why a house is a terrible investment (2013)
by asfasgasg on Sunday April 22, 2018 @09:50PM
(#16899936)
At the time I didn't think of it as speculating. I thought of it as "buying a house because that is what people do at this age in these life circumstances." But I agree that there are some interpretations of your word choice under which my actions would fall.
However, that does not mean I made a wise financial decision. I made a lucky financial decision, which is very different. This article is about making wise decisions, and it's very hard to reason about this from results in a single investment.
I just want to add that a lot of people account very poorly for their real estate profits. Whether that number is good depends on how leveraged you are and the value of the property, and many other variables, like your costs and (unknowable) future vacancy rates. (If you have a lot of leverage and the property is only worth a little, that's great! It would not be very good in a scenario where the the property is paid off and worth $2M.)