[quote=jstoesz]
Its an opportunity cost thing. If a home is a roof over your head (which it is not, it is a home with an ethereal awesomeness) then the question is could you get a better, safer return with all of your equity elsewhere. In today’s market of low yields, maybe not. I would have to do a detailed analysis, if I were in the position of having gobs of equity (which I don’t). But RE looks like a losing bet to me, at least in the neighborhoods of SD I like and in the near term.
That ethereal stuff is tricky…[/quote]
Yes, it’s an opportunity cost thing, I totally agree. I never discredit that a house is also a home, but a house is also a roof over your head.
That’s what I was telling you. This wasn’t some what if scenario. This is my numbers comparing the house I bought at the interest rate I got w/ the $ I put down. Over the last 2 years, w/out even counting appreciation, just the amount difference between how much I pay a year for this house (PITI – tax deduction) vs how much I would have to pay to rent the place. Add in how much I paid down the principle, that’s the number I came up with. It turns out to be ~20% return on my capital. Not too shabby when interest rate for saving account is next to nothing.
I think this: “But RE looks like a losing bet to me, at least in the neighborhoods of SD I like…” is the key point right here. You mentioned Point Loma, so I assume you’re looking at the high end areas. Those areas are much hard to have rent vs buy make sense. Haven’t they always been that way?
