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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (1324)	1/10/2002 4:57:08 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

I have a different perspective coming from the landlord end. At best, my properties provide nice tax losses and the rent payments do wind up in equity that I can borrow against....but sell it without rolling that cap gains (which is nothing more than inflation and don't forget to add back the depreciation) into another property and uncle gets a nice chunk, what is left doesn't even cover aggravation expense. Nothing like sitting down for a nice romantic dinner with your husband and the phone rings with a tenant telling you that when it rained water came in, soaked the dining room ceiling which made it half of it collapse on their table. Do you have any idea how heavy wet plaster board is? -g- Never once did my stock broker ever call me up to tell me something was leaking and I needed to get over there and fix it. Of course, then there are those investments like @Home which shortened my life by at least five years, at least that ceiling could be fixed.

To: Tradelite who wrote (1324)	1/10/2002 5:16:06 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

You know you are making a classic mistake which is that you are using your mortgage payment from a house you bought years ago and comparing it to rent you'd be paying today and in the future. Say you paid $100,000 20 years ago with a 30 year mortgage at the rates then which I think were quite high 1982 (hard to find higher ones). Ouch on the total interest paid for that mortgage it almost triples the cost of the house over thirty years. Your rent would have been lower than your mortgage payment for almost five years because the rate of inflation dropped if I remember correctly, severely in fact. Lets assume the house appreciation and the rent were subject to the same rate of inflation and with the renting scenario there would have been no down payment or transaction cost and no maintenance or improvement costs, no opportunity cost on that money (picture the down payment and transaction costs put in an index fund 1982 and left for 20 years!). To make your scenario accurate take the rental cost and mortgage cost from the date you bought your house and factor in everything you spent on your house and the difference between your standard and itemized deduction. You didn't make out nearly as well as you think.