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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (27743)	4/27/1998 3:44:00 PM
From: MythMan	Read Replies (1) \| Respond to of 132070

>>One way to hedge yourself is to put little down and then if the property values plummet you can walk away.<< He better have a mobile home handy then. Whats with the deadbeat advice? <g> Real estate and stocks have held up over the long term. You need to get a new schitck mike <g>

To: Mike M2 who wrote (27743)	4/27/1998 11:45:00 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

mike, i'd say that one's mortgage, interest, taxes and insurance should ideally total what you could reasonably receive in rent - before an adjustment is made for tax deduction purposes. if you move out then you no longer get the interest deduction unless your rent doesn't cover these expenses. if it doesn't then you get the deduction b/c you lose money. you might be saying this, but i'm not sure. well, in most cases, this is hard to do w/o a large down payment. so if my m/i/t/i is 10-15% more than fair rental value and i plan to stay there for at least 3 years then i feel comfortable. the only problem is that rents tend to decrease in a bad economic environment - and that can be bad news. life is nothing if not risky. just some other thoughts. btw, once you factor in inflation (a $200k home in 1987 s/b $270k in 1998 with 3% inflation), most areas are nowhere close to that mania. in my area, a $200k home in 1987 is about $200k or a little higher. my dad said that in his day 20% of net income was a good mortgage payment. now 30%+ of gross is. the real estate get rich quick era is over as we are just about topped out as a reasonable % of gross income. there is little flex left.