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Well, a few years ago having the bank lend you a house and then let you pay it back for the next 30 years, but not worrying about that burden because you knew real estate markets always went up was the way to be cool. Consider also that people doing this generally rinse/repeat, rather than using the first couple of good trade-ups to set them selves up financially. Lots of people with big fat expensive homes got there this way and now can't afford to live there, or to sell them. I know a whole bunch of people who bought houses 10 years ago and, today, if they sold their homes, would have lost several times what I've paid in rent during that same period. If they can hold out until the market returns they'll be okay, if not, who knows.... but now they're stuck with them. The key is to just put some clarity around what mortgaging, or even buying a home outright, really is - and why you are doing it. If you are doing it because you WANT to own a home and you think it's a magic, foolproof investment - that's foolish. Those are two different things. If you're doing it because you WANT to own that particular home and raise your family there for the next 30 years, then some day retire to a smaller apartment, or even stay there until it's time for the funny-farm, and you are doing it on terms you can afford over that time, that's fine - but your primary reason in this case is not as an investment. You will have expenses along the way that are more or less the same as renting. and while it seems unlikely over a 30 years span, it's always possible that the home won't be worth much in terms of equity 30 years later when you want to sell it. (the dollar value may have gone way up, but the cost of living will have risen as well. I'm not saying there will be no equity, but it may not be the best investment you could have made, and it could easily turn out to be a bad one) If you are into the real-estate business for investment purposes, then you should be studying various real-estate markets and looking for the best opportunities to buy/fix/hold/sell strategically. THese are typically not the types of houses you want to live in. |