[nerdawson]

> That’s huge upside.

That’s a big gamble. I thought this was about asymmetric upsides but here there’s a pretty huge downside.

Firstly, how do you realise the gain when you need somewhere to live? Primary residence != investment.

Secondly, 20x leverage shouldn’t be a selling point. A tiny dip in prices leaves you in negative equity and unable to move home. Less of an investment and more of a prison.

95% LTV mortgages tend to come with well above average rates to match the level of risk too. The gamble isn’t cheap.

Property can be a great investment but people are confusing buying a home with investing in property. They aren’t the same thing.

[overrun11]

Short sales, in the United States at least, limit downside. You can generally sell a house underwater and not owe anything, so the risk to you is only whatever you put in plus some harm to your credit worthiness over the next 5-7 years.

[dionidium]

Your own argument is that you need a roof over your head, either way, so if the value doesn't increase, then you simply live there. If it does, then you keep all the profit, tax free.

[nerdawson]

No, if the value doesn’t increase, you have to live there. You no longer have the option.

Find yourself at a peak and you could be stuck for years to come.

Again, this was all about asymmetric upside. Being unable to move even as life circumstances change seems like a pretty sharp downside.

[dionidium]

Yes, you probably shouldn't buy a house if you imagine you'll want or need to move in the next 7-10 years. And, yes, it's also not the case that there is zero risk. It's just lots of leverage with favorable tax treatment. But it's not a magic money machine.