Quote:
Originally Posted by zx10guy
In your list, you've neglected to offset the list with the equity gained in the property and any appreciation. Depending on the house you buy, you don't have to worry about the above issues. I've been in my house for 18 years. Bought it as new construction. I'm only now looking at having to replace the roof. I haven't had to do anything with the HVAC nor the hot water heater. I would say from the time I bought the house till now, the house has appreciated around $200k. And if you bring in interest payments, some of it along with property taxes have been offset by my ability to deduct these from my taxes. You can't deduct anything renting.
|
DC and California are atypical of national market trends. Nationally, houses from 1963-2008 earned, on average about 4% per annum. Obviously that means some markets gained and some have lost.
And again, although your house gained in value $200k, you’ve probably paid double at this point of what the original sale price was just with interest included. Tax deductibility on mortgage interest only maybe gives you a third of what you paid back. Again, not saying you won’t make money, but it will be far less than you think. And I am providing a rule of thumb. There’s clearly variability in all of that.
The other thing to consider is that for most people, a home is a major investment. You are putting a lot of trust into one instrument that it will gain value, when typically you invest in your 401k or stock market, you will diversify whatever you put in across several different markets and investment types. A house is a singular market and opens you up to wider market ups and downs.
I’m not here to tell anyone what to do, just sharing my experiences. I will say that while your home in DC May have gained $200k, my navy friend in Hampton Roads has lost $70k in value from the original purchase price.