Thread: Buy or Rent?
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Old July 30, 2018, 12:17 PM
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epitaph epitaph is offline
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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.


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..
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.
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