Re: Meg Munn chunters on...

In article <a7PYe.537703$5V4.243420@pd7tw3no>,
"Heidi Graw" <heidigraw@xxxxxxx> wrote:

> ><mark_sobolewski@xxxxxxxxx> wrote in message
> >news:1127147971.914989.219770@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
> >
> (snip)
>
> >>Hyerdahl wrote:
> >> I don't place much importance on "bubbles" unless you're looking at
> >> buying a house STRICTLY as an investment. A home for your family is a
> >> good investment anyway if you get a tax break on it, whether or not
> >> there is a bubble coming your way. So, it really depends on your
> >> REASON for buying or not buying.
>
> > Mark wrote:
> > Sure, if someone wants to _settle_ for "good" rather than great.
> > I would rather buy a home at the bottom of the market and watch
> > it's value grow rather than beg for tax break scraps every year.
>
> Mark, if you're looking for "great" right off the bat, you'll never get into
> the housing market at all. Your attempt at saving and waiting for it will
> never keep up at the same pace housing costs keep rising. There is no
> bubble to burst, despite what Greenspan may be yapping about. Besides,
> you're not looking to buy a spouse (who should be great), but rather a house
> which can be just about anything! I would suggest you take a somewhat
> different approach.
>
> Get into the market while interest rates are low and buy a house that you
> can afford at this time. Consider this your "starter home." It won't be
> exactly what you want, but it'll get you into actual home ownership. Once
> in, fix it up a little bit, enjoy living in it with your wife. Plan for
> kids a little later.
>
> Then, once you have the first one or two kids, consider "buying up" into a
> larger home and one that you really want *before* the kids are old enough to
> go to school. That "starter home" would in the meantime have risen in
> value, despite you not having paid down much of that actual mortgage. A
> lot actually depends on the location you happened to have bought into. Buy
> into an area that isn't experiencing a loss of population, but is gradually
> gaining. Once you've bought that larger house and the one you actually
> want, plan to be in that one for the duration of your children's school
> years. This will offer the children stability and life in a home and a
> neighbourhood that they will always remember.
>
> Then, once the children have moved out of the house, you can consider
> downsizing to a house that won't require quite so much maintenance. This
> downsizing will free up some cash for other things and/or other investments.
>
> So, don't wait, but do it now. Really! Buy with the thought in mind that
> you'll be buying again and upgrading later. House values do not rise and
> fall so dramatically. There aren't any bubbles to burst.
>
> Another thing we did was that whenever mortgage rates were low, we'd lock in
> for a longer term before it would come up for renewal. If they were high,
> we took out short term mortgages instead. Taking out a bi-weekly mortgage
> also helps to pay off the mortgage quicker. And any time the mortgage comes
> up for renewal, you can also plunk down some extra savings to shorten the
> life of that mortgage.
>
> You're fortunate that in the US you can claim mortgage interest to reduce
> your income taxes. This is not something we Canadian can do. We don't get
> tax-breaks for our housing. Anyway, don't delay, act today! ;-)
>
> Heidi

Hello Heidi,

Tell you what: If you're so sure that there is no real estate
bubble, put up some of your own money on this proposition:
If I buy a home and if the bubble doesn't burst in 4 years,
I'll give you a cool 2 grand (USA). All just for following your
savvy investment knowledge and experience.

If you're wrong, however, you give me whatever the difference in
price is between when I bought the property and when I call you
on your claim taking into account costs/losses from
property taxes, interest rate changes, and that super
tax break.

Yes, that's right: In the states, the government giveth
those tax breaks but takes away in property taxes and
the loss of the standard deductable (not a lot, but
a person burns the first 6 or so grand per year before those
much heralded deductions take any effect.)

If you're interested, I'll be willing to work with an
attorney to draft up an agreement where you reserve a share
in your own home as collateral.

regards,
Mark Sobolewski





Sound great? Please let me know and I'll be happy
.

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