Posted on 09/14/2007 5:37:16 AM PDT by Hydroshock
Ultimately, the problem with debt is when the lender says “pay up, now.”
Choosing to pay more for something now is one’s own call.
Leveraging assets to improve investments sometimes is smart.
Understanding the risk is critical.
If you own a home outright, and the value goes to $0, at least you have a home.
You don’t want to bring a big check to closing when selling the house.
And you sure don’t want the lender saying “it’s mine now, get out” - which is possible right up to being a day late on the last payment.
I think you missed my point. I was trying to refute your point that the tax benefit of the mortgage interest deduction was a “myth.”
I agree that you should live where you can afford. I have my whole life, and have finally gotten to point where I can afford a nice, large home in a nice neighborhood. Or as one in this thread put it, “a shitbox McMansion.” LOL! Oh well, to each his own.
If you pay cash for a $400,000 home and you sell it five years later for $500,000, you've made a 25% return on your "investment."
If you put down $100,000 on a $400,000 home and you sell it five years later for $500,000, the return on your investment is 100% minus five years of interest payments.
Think of the risk involved, though. If the value of your house goes to $0 wouldn’t rather have $100,000 sunk into it instead of $400,000? Especially if it goes to $0 for reasons that force you to leave anyway (like the entire neighborhood goes bad, every employer in the town goes out of business, etc.?
The only upside is that hopefully many illegal aliens will GTFO now that their big money construction jobs are shot. Or they should go back to picking vegetables and other agriculture pursuits ... I like my meat fruit and vegetables American grown and great if illegals do that.
The trouble comes when illegal aliens leave agriculture and start trashing wage levels in other sectors
OK...but where are you going to WORK to earn money to buy ANY property in those areas?
Pretty much the same as the other people who already live there. On top of that, there’s telecommuting, the Post Office, and straight-up enteprenurism.
I’m reminded of an IBM ad where some young guy drives his boss out to the future site of a new factory/warehouse/whatever. Upon arriving in the middle of nowhere, the boss decries being ... well ... in the middle of nowhere, and demands an explaination. The young creative employee, through a simple but well-delivered gesture, holds up a cell phone, points at the road, and waves at the empty fields, effectively saying: “we have communications, we have transportation infrastructure, we have dirt-cheap land - what more do you want?”
The illegals have been depressing wages in construction for years. Especially in small scale commercial work. They have really been noticable here over the past 3 years, moving up from the south where they have saturated the general labor market, to find new work.
I saw a crew of 5 mexies doing stone work on a new fast food place. I guarantee it will look like chit. But I bet they did it for a fraction of what a local contractor would have had to charge to cover taxes, insurance, work comp and general liability. unemployment compensation tax. ssi matching medicaid matching, equipment replacement expense, truck expense, material supplier etc.
We are going to have to run them out to re-claim the work Americans don’t do according to our friends on Bush Hill.
What’s your observation on the standards of quality in houses built during the last five years??
10 low-cost locales where jobs are plentiful
If you’re looking for areas with a low cost of living, good job prospects and a high quality of life, here are 10 best bets to research.
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=3863709
For most of the builders I have worked for, the quality has been excellent.
However some builders, comparitive cost per sq ft, the work has been shoddy.
Right now however, the quality work is secondary to cost.
With a lot of sub contractors not working steady, they are bidding labor cost down to the breaking point. Contractors eee an opportunity to maybe put a few thousand $ in pocket if they get a quick sell.
My company has quit bidding on spec homes completely. Not worth the trouble. Problem is, there are not enough custom homes to go around and the same desperate subs are low balling those bids too.
If I am going to donate my time, then next week I am doing some major tuck pointing on a habitat for humainty renovation. My charity is staying with the not for profits for now. The general contractors can take a hike with their greed.
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