681–690 of 704 posts
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Bob, with a net worth $1M lower than Alice, would probably disagree that she has not profited.
Only if you do fraudulent accounting. Mark-to-market is limited to assets held for trading, as far as I can tell, and for a good reason.
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Anecdotally, I live in rapidly growing, tech-friendly metro and track housing data in the area. The county assessor's office exposes homeowner's names and you can easily spot the "private equity" owners. They are very few and far between. > The amount of private equity in housing I think this issue is, at least at the moment, overstated. Could be a problem in the future though.
I think nationally it just approached 1% of all purchases being done by "e-buyers", with much heavier concentrations in certain areas they're targeting.
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True. Renting has other risks though. The Landlord can increase the price dramatically at least as often as you renew your contract (usually a year in the US), or force you to move out because they sold the property, or really almost any reason. And because moving has such a high transaction cost, landlords can often get away with treating tenants pretty badly, because putting up with a bad landlord is often less bad…
It's almost as if playing in the rat race isn't easy or fair. Moving to a rural area or living on social welfare is usually also an option but you have to quit the rat-race to do that and miss out on all the wealth and social status.
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Yes, you can get a shorter term loan and have a lower interest rate- 15 years is also reasonably common, and fixed rate products exist at 20 and 10 years respectively. Adjustable rate and 5/1 or 7/1 products exist as well, but they aren’t as popular or encouraged by regulators, as they played a role in the 2008 financial crisis. As to why go for a 30 year loan instead of a lower interest rate 15 year the answer is ba…
> Even people who can easily afford a 15 year loan will choose a 30 year because the 0.5-1% interest rate is lower than the expected returns of something like stocks, so it makes sense to stay leveraged. There are also tax benefits to paying interest (but not principal) on loans, but these are way less important since the trump tax reforms. On the other hand, it probably reduces risk to take the 15 year loan if you c…
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Rate and yield are the same thing. Whenever I’m paying a rate, somebody else is earning a yield. Whenever I’m earning a yield, someone else is paying a rate.
They are related but they are certainly not the same thing.
Anyway, the thing is if the spot rate is x% you will certainly be able to find bonds in the market that pay x% interest (=yield), regardless of the fact that a bond's yield and price are negatively correlated (an irrelevant fact, for the purposes of this discussion).
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Only if you do fraudulent accounting. Mark-to-market is limited to assets held for trading, as far as I can tell, and for a good reason.
If you sell your home for $1M more than you bought it, it would be fraud if you didn't consider it a gain.
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Yes, you're absolutely right. People with big piles of capital have a great time during times of low rates, whereas the cash poor working class (even those on high incomes) still get squeezed out by lending criteria and price inflation. > That does not equate to 10 years of savings from responsible people. I don't agree with this. If you're putting 40% of your take home in to rent and property taxes then saving only…
Only homeowners pay property taxes. Depending on your income and where you live, saving 50% is totally doable. And since you’re into fanatical scenarios where home prices go up 50-70%, you should also apply the appreciation of the stock market to your savings (usually double or triple real estate).
> Only homeowners pay property taxes.
I pay almost $300 USD/mo in local taxes (for local services) here in the UK. This amount is linked directly to the value and occupancy of the home that I rent from my landlord.
> since you’re into fanatical scenarios where home prices go up 50-70%
The fantasy that just happened?
The national average house price index in the UK is currently at 450. In 2013 it was ~280. That's a 60% increase over 8 years, which is exactly what I said.
Regionally it's worse. London property prices have essentially matched the total return of the global stock market over the last 20 years.
And the UK is NOT special. Property is up 150% over the last 10 years in the US as well:
https://www.thisismoney.co.uk/money/mortgageshome/article-10...
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"better start finding and implementing real solutions to housing prices right now" They can't. Providing supply will suffer the wrath of BANANA/CAVE/NIMBY anywhere you dream of living. Constraining demand will either get you voted out of office or devastate your political network or both, depending on which policy you attempt. You're competing with a whole planet full of people that want to live here and have more me…
> For 99% of you that means living far away from your preferred locale among people you probably loath. Parent comment is vitriolic but not actually wrong. Myself, I take great comfort in the idea of huge swaths of liberal, well-educated millennials and xennials migrating out of coastal cities and into small towns across the South and Midwest. Can you work remotely? Want to own your own home on a multi-acre lot for $…
(Src: https://www.theatlantic.com/technology/archive/2019/02/singl...)
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Raw land is cheap. Housing codes are what keep people like myself out of the housing market. If I could just dump a yurt on the land, or a cabin like our forefathers, then housing prices would be a total non issue. But a bunch of selfish NIMBYs are so scared of the poors building a yurt instead of a 2000 sq ft brick house for two people and a dog, they'll never allow it.
There are plenty of trailer parks all over the country that will let you plop your yurt down and even plumb it in to local utilities. You may not enjoy your neighbors very much.
Definitely don't get a mortgage to buy a home in a trailer park. Its the worst abuses of both the mortgage and rental markets. No matter what your at the mercy of the landlord raising prices (and selling to someone who raises prices to drive everyone off), while frequently ending up underwater in the trailer itself. For people who are this low on the income ladder the ability to _move_ the trailer is mostly non-existent since it generally starts at a few thousand $$, and goes from there. So, people lose the trailers, and their investment when they can't pay the rent. Then there is the problem that even the worst built house is better quality than what you find from any of the mobile home builders which have to basically use plastic/vinyl/particleboard glued together to keep weight down with the occasional staple to hold things together while the glue is drying. Most of the homes cannot be moved after a couple years because they would fall apart when presented with road speed winds and vibration. So, often not only to they lose the home, they end up owning the trailer park mgmt for removing the trailer.
So, its bad. When people put mobile homes on land they own, they tend to build houses around them over time by adding covered decks, screen rooms, additions, new roofs, etc. Basically turning them into prefab cores of frequently reasonably nice houses/cabins after they rip out the crummy plastic bathrooms and put in actual porcelain toilets, real stoves, fridges, tile, countertops, etc. None of that really happens in your average mobile home community because people maintain the fiction that they can move the trailer even when its rotting in place.
Bottom line, I would live in a car/truck before I considered living in a trailer in a trailer park. People with children are probably better just finding another family to share a rental with and packing bunk beds in.