An extension of this converstation, I thought it needed it’s own space.
Nathan commented about how…well you might as well just read it.
<blockquote>there’s no point. you buy a house, pay into your mortgage, your family grows, you buy another house, and what you get from the first makes a nice down payment on the second. your mortgage stays the same, but now you’re in it for another 30 years. but in less time than that, your kids are gone and you don’t need the room. you down size, get a new mortgage. by the time you actually own the home (not the bank) you’re about 10 years from death. woo! you wasted your whole life making bankers rich, just to finally own a small junker. when you go your kids will sell it off and buy a nice car. maybe renting from private parties is the way to go.</blockquote>
While I disagree with the notion I do agree with some of it because while you buy a 500k house now it will appreciate so you can later upgrade, yes you will be paying the same losing the money you accrued because you invested it into another bigger house but there are better ways.
If you could afford it rent it. The renters will pay for the old mortgage and maybe even a little more for your new house because of inflation. Then after 10-15 years you own another house straight up. Then that rent money will pay for your new mortgage, helping you along. when you are ready to retire or move into a smaller house you sell the newer house and live off of the money or even better you rent it and sell it later when you are retired. Maybe a tuff plan to do here in VC since two mortgages, even supplemented by rent, is very hard to do for that 10-15 years.
Housing equity is the best financial stability you can have. It appreciates solidly, it’s almost guaranteed. The best retirement plan ever. Better yet it’s the only thin you can use as investment and use, you can’t sleep in the bank.
This is something, hopefully, we intend to do. And if we have to move to a cheaper housing market to do so then so be it. Especially since this could be a job, sitting around watching your houses appreciate while your tenants screw them up.
