Quote from niceguy:
what if you incorporate your self and take a 25% home office deduction ? probably should work that into your model. I rent a 2 acre home on the the Gold coast of Long Island for about the same as a nice 1 BR in NYC.
Quote from Arnie:
You use the term "appraisal" but I think you mean "assessed value". They really are quite different. An appraisal in an unbiased opinion of market value by a licensed/certified appraiser. An assessed value is a value according to a uniform schedule for tax rolls in "ad valorem" taxation. Appraisals are NOT public information, in fact an appraiser could lose his/her license for disclosing without permission of the client. Assessed values tend to lag the market, so it's not unusual to see assessed values below market value in a rising market and above market value in a declining market. In fact, it's rare that they match at any given time.
Quote from Smart Money:
Have ya'll factored in that rents climb with the rate of inflation, but mortages on fixed rates stay pretty flat.
Quote from Sparohok:
There's absolutely no question that in hindsight, home ownership has been a fantastic investment over the last 5 years throughout California. In perfect hindsight, only an idiot would have rented in 2000 or 2002.
However, it is precisely the fact that home owners have done so well in the past that makes renting a much better use of money today.
Martin
Quote from Sparohok:
That's because of the amortization schedule, which reflects home equity (savings) by the owner. Your father-in-law is paying only $200/month because he has already saved the vast majority of the price of the house. In order to accomplish that, he had to pay a great deal of interest at a time when dollars were much more valuble than they are today.
Martin
Inflation helps the homeowner since the mortgage payment remains the same whereas revenues should increase. So what was once taking up 30% of monthly cash-flow, may only take 5% after 15 years.
Quote from balda:
05-12-06 11:31 AM
Condo in Tarzana ,CA was appraised for $570K has been on the market from August 2005 listed for 550K sold by the end of January 2006 for $470K.
You can see it if you go to zillow.com
5477 Nestle ave, Tarzana CA 91356 unit #17. You can see that it is appraised at $570k and sold for $470K
Quote from Sparohok:
Inflation expectations are built into mortgage rates. If the rate of inflation is relatively constant, it helps neither homeowner nor renter.
Rising inflation helps an owner with a fixed rate mortgage. If you want to bet on rising inflation, go ahead and buy a house on fixed notes. Or short long bonds, it amounts to the same thing.
Martin