The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Michael Sphar who wrote (6272)	10/27/2002 2:31:46 AM
From: fatty	Read Replies (4) of 306849

>May, 1989, signed a purchase agreement for $289,950. I put down something north of $100K, mortgaged the rest. Back in may 1989, S&P 500 was ~300. Now, it's ~900. So your $100K is worth $300K if you invested in S&P 500. You can net $200k. Let say you had a 30 year mortgage and your're already paid off 1/3 and your house is worth $550k now. If you sell, you net $450K. But you still owe the real estate agent $30k and the bank 2/3 of $180 or $120. So $450k - $120 - $30= $290k, which is $90k better than S&P 500. But investing in S&P 500 is hassle free and you don't have to pay taxes and maintanences. Spread the $90K over the past 12 years, you kind of make $7.5k more per year or $625 per month for all the extras you have done/paid as an owner as opposed to a renter. Well, can you say if that was worth it?

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