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SVTPerformance's Chain of Restaurants
Road Side Pub
I just can’t convince myself to buy a house.
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<blockquote data-quote="Pribilof" data-source="post: 16198157" data-attributes="member: 155968"><p>If you're going to live in the house for over 5 years it generally makes sense to buy. Despite what realtors say, it's almost never an "investment" after factoring in carrying costs, inflation, and transaction costs. However, you have to live somewhere. It's more of a lifestyle investment. If you want an actual investment, buy stocks.</p><p></p><p>For instance:</p><p>$365k in 2009 is about $435k in 2019 dollars.</p><p>Seller's transaction costs on a $550,000 value are $33,000.</p><p>Net $517,000 after commissions.</p><p>Taxable gain of $185,000 equals a tax payment of $37,000.</p><p><u>Your $517,000 net just turned into $480,000, for an inflation adjusted gain of $45,000</u></p><p><u></u></p><p>What were your maintenance costs over 10 years?</p><p>What were your property taxes over 10 years?</p><p>What were your interest costs on the mortgage?</p><p>What were rental costs of a similar home?</p><p></p><p>Probably a wash on your gains but you got to live somewhere you owned and you had to live somewhere anyway</p><p></p><p>Edit:</p><p>Also if you had 20% down on your initial mortgage ($85,000) you lost the use of those funds for 10 years.</p><p>If you had put that $87,000 in the SP500 in January 2009 you would have roughly $300,000 today.</p></blockquote><p></p>
[QUOTE="Pribilof, post: 16198157, member: 155968"] If you're going to live in the house for over 5 years it generally makes sense to buy. Despite what realtors say, it's almost never an "investment" after factoring in carrying costs, inflation, and transaction costs. However, you have to live somewhere. It's more of a lifestyle investment. If you want an actual investment, buy stocks. For instance: $365k in 2009 is about $435k in 2019 dollars. Seller's transaction costs on a $550,000 value are $33,000. Net $517,000 after commissions. Taxable gain of $185,000 equals a tax payment of $37,000. [U]Your $517,000 net just turned into $480,000, for an inflation adjusted gain of $45,000 [/U] What were your maintenance costs over 10 years? What were your property taxes over 10 years? What were your interest costs on the mortgage? What were rental costs of a similar home? Probably a wash on your gains but you got to live somewhere you owned and you had to live somewhere anyway Edit: Also if you had 20% down on your initial mortgage ($85,000) you lost the use of those funds for 10 years. If you had put that $87,000 in the SP500 in January 2009 you would have roughly $300,000 today. [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
I just can’t convince myself to buy a house.
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