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  1. #11
    Lallygag Moderator Geoff's Avatar
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    Quote Originally Posted by Lateralus View Post
    A house is not an asset if you are living in it, it's a liability. It's only an asset if it is generating income.
    What about capital growth? Surely a non income generating, but rapidly rising capital base is an asset

    Which is difficult to achieve right now, for sure, but still should be kept in mind when deciding if something is an asset or liability.

  2. #12
    Senior Member WoodsWoman's Avatar
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    Building equity is an asset.

  3. #13
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Geoff View Post
    What about capital growth? Surely a non income generating, but rapidly rising capital base is an asset

    Which is difficult to achieve right now, for sure, but still should be kept in mind when deciding if something is an asset or liability.
    Owning real estate is not like owning stock. You have property taxes and maintenance even if you don't have a mortgage.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  4. #14
    Senior Member Feops's Avatar
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    Quote Originally Posted by Lateralus View Post
    Anyone who tells you that "renting is just throwing away your money" is full of shit (or trying to sell you something). If you own a home, you're often spending more on mortgage interest, taxes, insurance, and maintenance than you would on rent. Plus, if you have to move, it's much more of a hassle (and expensive) to own than rent.
    This is my concern. Some friends of mine have recently purchased homes, but they are in long mortgages of which I am certain they are being gouged in the long run. I'm very much aware of the penalty for compounding, so sitting in a 30 year mortgage looks terrible.

    Rent is fairly simple to tabulate. I pay $x per month. I suppose the question would then become if those taxes, interest, and maintenance would exceed my current rent. If so, then I'm essentially paying money to build equity, when I could have put the money in the bank or invested it instead. Though property does tend to appreciate, so it's not a complete loss. I think this part of the equation was more simple some 20-30 years ago.. people just shifted their rent payments into mortgages and bam, profit.

    The other factor would be lifestyle needs. Right now I'm single and don't even need the 1 bedroom I have really. If I hook up and have kids one day that means I'd have to dust my purchase for something bigger, or buy something bigger than what I currently need right now, but if it's bigger than what I need I'm eating a bigger mortgage that's less likely to be beneficial.

    Time for math

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