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Originally Posted by iDumb
that is a poor argument and doesn't factor in leverage. That is important in market like NYC/California.
If you put in 100K downpayment for a let's say 800k house. The percentage appreciation of the house is on the 800K not your 100k giving you a significan't leverage.
if house prices goes up 3% in one year (which is historically the rate at which it apprecaites annually for some market ). that's 24K apprecaition. But if you invest outside you would need to have 24% appreciation else where to get to that 24K.
That is called leverage and all the calculations never count that.
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the queens house in my example... the house only doubled in value. But my initiall investment for that house would be 150K or so...I would need to have 500% return to catch up to waht I would have made with the house in 4 years vs only slightly less than 100% gain..
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After reading this post properly (you could've put all that in one paragraph), it makes even less sense now.
Min down payment is 20%, or are rules diff in NYC?
3% of 700k is 21k, not 24k.
I'm here talking about a 100k condo, and you're mentioning 800k properties lol. 3% of 80k is $2400. Big diff from 24k.
12% is a good return but you could get similar returns with other investments with less risk and without tying up your money monthly.