Foo - Do You Own The House Or Does The House Own You?

Last year I replaced my windows, doors and garage doors. I painted the outside of the house. I still have my back porch to rebuild and need to replace my gutters and porch railings. Today I found out my a/c is shot. This is costing me a ton of time and $$$$.

I guess I should be grateful that I have shelter.

The bank owns the house..... I am paying them very slowly for the honor to hold the deed someday...

Still beats pouring my money into a rental property.

The incidentals to keep the house in good order are a given and help me and my wife to improve our home-improvement skills over time. :)

I own my house outright. No debt, no interest to anyone. With the money that would've been wasted on interest-payments, I get to travel, race cars and buy go-fast bike goodies! :) Although I do owe $5000+ a year in property-taxes, no way around that. Interestingly enough, my property-taxes are higher than what I used to pay in rent...



Still beats pouring my money into a rental property.Not if that extra money you've got to cough up for mortgage-payments could be earning bigger returns elsewhere...

I own my house outright. No debt, no interest to anyone. With the money that would've been wasted on interest-payments, I get to travel, race cars and buy go-fast bike goodies! :) Although I do owe $5000+ a year in property-taxes, no way around that. Interestingly enough, my property-taxes are higher than what I used to pay in rent...


Not if that extra money you've got to cough up for mortgage-payments could be earning bigger returns elsewhere...

Yes, this is a valid statement. But I know of properties near mine where renters pay nearly as much as my monthly mortgage payment.

Plus, a certain part of the interest and property taxes come back in the form of deductions on the federal income tax form in the U.S. Property taxes also come back to one in the form of public education for the children (if you got kids, and if you send your kid to a public school). Cheaper than a private school, and if the parent and child are willing to put in the effort, the public education can be as enriching as a private school. But that often depends on the particular school district.

Not having a landlord is worth some of that extra fuss, though there is the home-owners association for any construction project....

A bit of free advice that I wish I had taken: If you're gonna buy a house that you plan to stay in, see if you can swing a 15-year mortgage. It's not that much more and the years do go by.

If I had done that, my house would have been paid off a few years ago. Oh well.

The cat owns the house. He just lets me and the dogs live there.

The cat owns the house. He just lets me and the dogs live there.
:D hehe

if you pay property taxes, you dont own your house and you never will

Who doesn't pay property taxes?

not all states or counties have property taxes, just like not all states have income taxes

my rent back in 1984 was $260/month, now its $285/month, food for thought

houses are only investments as long as they increase in value, how much will some of you guys' McHouses be worth in 3-4 years when your gas bill is more than your mortgage payment and you cant afford to cool it in summer? At the same time, your local municipality will probably RAISE your property taxes. Hope your prepared. You been amply warned years in advance. My MOM didnt heed my warnings, now she's stuck already.

A bit of free advice that I wish I had taken: If you're gonna buy a house that you plan to stay in, see if you can swing a 15-year mortgage. It's not that much more and the years do go by.

If I had done that, my house would have been paid off a few years ago. Oh well.

Great advice, we managed to lock-in a 15y three years ago at 5% when we bought our current house. Payments are higher but the overall savings in interest will be huge, and in 12 years we'll still be a long way from retirement :p (but probably paying for some college :eek: ).

On the other hand, if you don't plan on staying long, look at 5 year fixed or even 1 year or low rate variable if you can take the risk. We took a 30 years on our previous home we only kept for 2,5 years, that wasn't the smartest choice knowing we would not stay there very long. It wasn't all bad because the sale generated enough cash to pay off our vacation home we purchased earlier and a good downpayment on the current one. In many ways we feel lucky, considering the difficult housing market in this part of the country.

To answer the OP, our current house is like yours bikecrate's a constant upkeep (built in 1830) but I wouldn't trade for a rental. Great open space, neighbors far enough to crank up the sound, and most of all awesome roads to ride everywhere. :D

not all states or counties have property taxes, just like not all states have income taxes

my rent back in 1984 was $260/month, now its $285/month, food for thought

houses are only investments as long as they increase in value, how much will some of you guys' McHouses be worth in 3-4 years when your gas bill is more than your mortgage payment and you cant afford to cool it in summer? At the same time, your local municipality will probably RAISE your property taxes. Hope your prepared. You been amply warned years in advance. My MOM didnt heed my warnings, now she's stuck already.
Houses are an investment period. even if they lose value. Because you pay almost the same amount of money in rent and bam once its paid for its pretty much paid for. Now the people who hang on and take 30 years to pay for it - well I can't really speak for those people. Every house we've ever bopught we've paid for it as much as possible. We didn't eat good tdill the house was paid for :) If I had a house I'd have it made.

Well, Ive got tons of neighbors who's property taxes exceed their mortgage payments they USED to have, their houses are paid off, now they have big property tax payments..........IE they do NOT own their houses. Is that an investment? Nope, its rent.

TexasGuy and pedex, you guys are talking about the same thing, just different aspects of it. The main difference is a matter of cost and area. Taxes are everywhere, I pay more in property taxes than what I used to pay in rent as a student over 10-years ago. Equity-appreciation varies by area. Properties in Texas, especially the heartland haven't appreciated very much the past 30-years. Putting your money there would've seen negative gains due to average 7% inflation in the past 30-years (double-digit in the 70s).

In other areas, like where I live, property prices were appreciating at 15% in '96, or gaining double the normal-rate for real-estate. If you got in 10-years ago, you would've doubled your property-price in 5-years, sell and collect a 50% gain (other 50% goes to the bank as mortgage-interest and fees).

That's the hidden cost that a lot of people do not consider, interest, free money to someone. Maintenance and insurance costs are also factors that homeowners are only too aware of. There's three scenarios... with say... $3000/month housing budget:

I. RENT PROPERTY
-1000/month rent
+2000/month cash goes into savings
+1% monthly investment gain
------------
-12000/year rent
+24000/year savings increase
+$2500/year investment gain roughly
------------
+14500/year TOTAL


II. BUY PROPERTY ON MORTGATE
-$3000/month mortgage
-450/month property-tax
-300/month maintenance&repairs
+500/month income-tax return
+.5% monthly property-appreciation
------------
-36000/yearly mortgage
-5400/year property-taxes
-3600/year maintenance&repairs
+6000/year income-tax return
+25000/year property-appreciation
------------
-14000/year TOTAL


III. OWN PROPERTY OUTRIGHT
-450/month property-tax
-300/month maintenance&repairs
+.5% monthly property-appreciation
+3000/month cash goes into savings
+1% monthly investment gain
------------
-5400/year property-taxes
-3600/year maintenance&repairs
+25000/year property-appreciation
+36000/year savings increase
+4000/year investment gain
------------
+56000/year TOTAL


You can juggle the numbers on renting vs. mortgage and in some cases, it's better to rent than buy, like Pedex. Because you've got a lot of cash left over that can earn you better returns elsewhere. TexasGuy is right on in that ALL housing is investments. You can't take it with you when you die and depending upon your family's wishes, it may be better off as cash for them. In which case, you need to examine the numbers of years and how much built-up equity and appreciation you'll get before you die. When my mum died, she left me a $750,000 house, but had over $1,000,000 in 1st/2nds and misc. other equity loans on it. It was a loss for everyone, me, and the various banks holding loans as the sale-price on the house ended up being less than principal loaned out by the banks.

CyLowe97's also right on with buying if your mortgage would be the same as rent. However, it depends upon the area, the banks knows the game too well. Areas where mortgages payments are similarr to rentals aren't appreciating very much. Around here, to buy a property that you can rent for $1000 would cost you $4000 in mortgage payments. And real-estate prices have been stagnant for 5-years around here, so in my area, it would be better to rent or buy outright. Also tax-relief is a con-game. Unless you're in the 100% tax-bracket, you'll ALWAYS get back less in tax-returns than what you've paid out in interest. So +6000 tax-returns is still a loss for having paid out -20000 in mortgage-interest. Better to not have paid that $20000 in the beginning and put it into FX for a positive return instead. :)

(BTW - I didn't even factor in renting out my house, which brings in another +20000/yr, which raises my total to +76000/yr :). Didn't add that in because I gotta live somewhere.)

^^all of which is predicated on a very short window of history which about to get fubarred

Damn, my hot-tub's broken! My maintenance costs for the year just doubled! :(

BTW - new "low income" housing project starting up near intersection of hwy-154 & 101. To qualify, you have to have combined household-income of less than $90k/year. :) It would be interesting to see what the percentage of these new homeowners are natives vs. immigrants...

Damn, my hot-tub's broken! My maintenance costs for the year just doubled! :(

BTW - new "low income" housing project starting up near intersection of hwy-154 & 101. To qualify, you have to have combined household-income of less than $90k/year. :) It would be interesting to see what the percentage of these new homeowners are natives vs. immigrants...

Santa Barbara, as I recall, is downright swank. Usually housing such as the one near you requires residents to earn less than 80% of the median household income for the county in which the housing is located. Given the high incomes in SB, the $90k figure is not surprising. That figure is typically for a family of four--so in theory each parent would be earning less than $45k per year--hardly rolling in the dough in SB. Single-parent households would likely be a little more than $45k, depending on the number of kids.

I don't get the immigrant remark, and I really should go here, but...dive right in. Um, perhaps you are Chippawa or something (i.e., a "native"), but my family are immigrants from Ireland, Portugal, Germany, Hungary, England, Wales, France, and Holland. They started immigrating in 1730 or thereabouts, with the Portuguese side coming over in 1883 chasing whales. Every one of them an immigrant (not the whales).

As for the real estate, it's very admirable that you own your house outright. That takes discipline, or winning the lottery. I own two houses, or very small parts of them given that I owe the banks, but I'm definitely out ahead from being a renter. In some markets, renting might make more sense, but I'm not familiar with those markets.

DannoXYZ.... As usual, you bring a wealth of information to the table. I always learn something from your posts.

As for mortgages in a stagnant area, when we chose to move out of renting in downtown Chicago 4 years ago, my wife and I built a house in a far suburb (I worked out that way anyway). Building was the right thing for us after looking into a lot of options. We saved up enough of a down payment that our monthly mortgage is managable. Even after my wife left her job (which paid quite well) to have our first child 1.5 years ago, we knew that we could continue to make the mortgage payment, as well as put a significant amount into the 401k and into savings for our everyday lives. Without her salary we are more careful with our purchasing, but the big thing is that the only debt we carry is the mortgage.

The central question on the thread is perhaps the wrong question. Having a mortgage is seen as positive in most aspects. The problem is when people start getting into Zero-Down or Interest Only mortgages, or when they don't know how a 5 year ARM will kill them if they don't unload the house soon enough. Or when couples don't understand that there is an easy way to avoid the inane thing that is PMI on their first house. PMI (Private Mortgage Insurance) is the textbook definition of burning money until they pay off 20% of the mortgage. Avoiding it often just means putting down 10% on the house and requesting an 80/10/10 loan, where the other 10% is a 2nd mortgage. We did this and I have been doubling up the 2nd mortgage payments so that it will be gone far before its 15 year timeframe is up. So I'm paying prinicpal on the house instead of paying PMI into an empty hole.


The other issue is that people carry negative debt on their credit cards, or financing more car than they need. It's so easy to get into, but so hard to get out unscathed.

A little financial discipline goes a long way. I just want to start following the DannoXYZ model.... he's got it made! :)

Damn, my hot-tub's broken! My maintenance costs for the year just doubled! :(

BTW - new "low income" housing project starting up near intersection of hwy-154 & 101. To qualify, you have to have combined household-income of less than $90k/year. :) It would be interesting to see what the percentage of these new homeowners are natives vs. immigrants...
Less then $90K a year to qualify for low income housing? Damn. Here the cut off for a family of 4 is $22K.

That's rich... they don't even consider 90k a year low income in NYC...

F**k the American dream.

Owning a nice house with a double Garage in the burbs is a pain in the ass!

I guess I shouldn’t complain. I love my house. It was built in 1950 (I always try to imagine a postwar couple moving in after it was built). It has just the right size interior, good yard, big mature oaks, hardwood floors, big picture windows with a view of the brick streets. Things like this A/C problem drive me crazy though. I think my bike riding is going to get cancelled this weekend due to the back porch. Sometimes I wish I lived in a tent!!

I own my house outright. No debt, no interest to anyone. With the money that would've been wasted on interest-payments, I get to travel, race cars and buy go-fast bike goodies! :) Although I do owe $5000+ a year in property-taxes, no way around that. Interestingly enough, my property-taxes are higher than what I used to pay in rent...


Not if that extra money you've got to cough up for mortgage-payments could be earning bigger returns elsewhere...


Some states don't have propert tax...Texas is one I think. How nice would that be once your house was paid off?

F**k the American dream.

Owning a nice house with a double Garage in the burbs is a pain in the ass!


Actually I apologize - the above statement is kind of harsh and may offend the majority of people that love house ownership.

A bit of free advice that I wish I had taken: If you're gonna buy a house that you plan to stay in, see if you can swing a 15-year mortgage. It's not that much more and the years do go by.

If I had done that, my house would have been paid off a few years ago. Oh well.


Good advice. When I first bought my place, I had a thirty year mortgage. Two years later, I re-financed with a lower interest rate and a 15 year. My payment actually went up, but my equity is growing much faster than it would have with a 30 year. Add to that the fact that the value of the place has near doubled in less than six years, and I feel pretty good about it.

Good advice. When I first bought my place, I had a thirty year mortgage. Two years later, I re-financed with a lower interest rate and a 15 year. My payment actually went up, but my equity is growing much faster than it would have with a 30 year. Add to that the fact that the value of the place has near doubled in less than six years, and I feel pretty good about it.

We have a 30 year 1st mortgage and a smaller 15 year second mortgage (which helps us avoid PMI). We're paying down the 2nd very quickly (rough estimate has it gone in 8 years, if not sooner). Once it's out of the way, we'll look into refinancing the 1st into a 15 year, or see if we can pay down the principal quicker. It will depend on rates at that time and any additional closing costs. Regardless, even though we have a '30 year' we know that we can pay it down faster without penalties, so there is no way that sucker is going to take 30 years to pay off.

Everybody's situation is different, it seems. Jobs, kids, etc., other unforseen future things (dang! kids demand a lot of time and fiduciary expenditure! :rolleyes: ).

As long as I can get some time to ride, read, and work in the yard, I'm a pretty happy camper.

First the dish washer went out. We got lucky and were able to find and replace a suspected valve ourselves, so we averted a repairman or replacement of the washer. A week later our oven gave up the ghost, this requires a replacement! What next? I was saving money to replace the garage doors!

A bit of free advice that I wish I had taken: If you're gonna buy a house that you plan to stay in, see if you can swing a 15-year mortgage. It's not that much more and the years do go by.

If I had done that, my house would have been paid off a few years ago. Oh well.

- or, if you have a 30-year with a good rate and don't want to bother with paperwork, simply pay an extra month's principal every month...

- one factor that no one has mentioned here is that sometimes a house can be part of your portfolio diversification (real estate is next best thing to stock market)...

- good thread!

sometimes a house can be part of your portfolio diversification
In principle, this is true. A house is part of your total portfolio, and thus offers diversification. However, in practice, you don't handle a house the same way you handle the rest of your portfolio. It's an undiversified portion of your portfolio. And not chosen purely for its expected returns. And not readily rebalanced when your asset allocation gets out of line. And it's not clear that you'd choose to sell your house and buy a different one if you believe the prices are more favorable somewhere else (say, 1200 miles away).

I. RENT PROPERTY
-1000/month rent
+2000/month cash goes into savings
+1% monthly investment gain
------------
-12000/year rent
+24000/year savings increase
+$2500/year investment gain roughly
------------
+14500/year TOTAL


II. BUY PROPERTY ON MORTGATE
-$3000/month mortgage
-450/month property-tax
-300/month maintenance&repairs
+500/month income-tax return
+.5% monthly property-appreciation
------------
-36000/yearly mortgage
-5400/year property-taxes
-3600/year maintenance&repairs
+6000/year income-tax return
+25000/year property-appreciation
------------
-14000/year TOTAL


III. OWN PROPERTY OUTRIGHT
-450/month property-tax
-300/month maintenance&repairs
+.5% monthly property-appreciation
+3000/month cash goes into savings
+1% monthly investment gain
------------
-5400/year property-taxes
-3600/year maintenance&repairs
+25000/year property-appreciation
+36000/year savings increase
+4000/year investment gain
------------
+56000/year TOTAL

Interesting analysis... some good things to consider, but this also shows how everyone looks at these situations a bit differently.

Two things spring to mind:

1. If I was going to spend $3000 per month on a mortgage, I doubt my rental alternative would be a $1000 per month apartment.

b. Why do you factor the property tax outside of the mortgage? I know for me, I'd consider that as part of the cost of a house in that area, and hence a part of my monthly housing budget.

We ran the numbers about 18 months back and decided to buy. We were paying $1000 per month, gas and electric not included, for a 1000 sq ft apartment, and wanted something bigger. To rent a 1400 sq ft townhome or a 1600 sq ft house would have been about $1400. We now pay about $1000 per month mortgage, including property tax, for a 2000 sq ft house in roughly the same area. While we could afford to spend a lot more on a house, this one fits the two of us and the cat fine, and costs a lot less to run than a 3500 sq ft home. Factor in the tax advantage for us and that we waited for a motivated seller and bought at a good price, even with some maintenance we come out ahead each year before appreciation.

The advice to make extra payments is definitely good. One option is to up each month's payment e.g. by the standard principal payment amount. Another option is to make mortgage payments every 4 weeks instead of every month - works out to one extra payment per year, which typically reduces a 30 year loan to 24 years, saving a heckuva lot of interest.

I love living in my own home, but every time I think about spending any money on a new toy, SWMBO reminds me of the carpet or the siding that needs to be replaced or some other household expense. I have had to perform some chore every day this week after work so I haven't been able to play at all. Still, I can not see the sense in anyone paying rent unless they are going to be in a residence for less than a couple of years.

My daughter and her husband just moved into a town house with a postage stamp lawn. That makes sense to me since neither of them is into gardening and it makes for much less home maintenance.

Who doesn't pay property taxes?


whats property tax? :o

I have a nice house.. that I don't own yet.. I have a nice car.. that I dont own yet.. I have 2 nice expensive dogs.. that I dont even own ...yet.. I owe, I owe, it's off to work I go.
The good news is.. I own my bike:)

Our house is our biggest investment. And we've gotten the biggest return. Thank you, California Housing Bubble!

I totally pwn my house

My house has more than doubled in value in five years. Nothing else in my investment portfolio can touch that return. Not to mention the huge tax advantages. It might be an expensive B!TCH on a monthly basis, but it does pay.

My house has more than doubled in value in five years. Nothing else in my investment portfolio can touch that return. Not to mention the huge tax advantages. It might be an expensive B!TCH on a monthly basis, but it does pay.

for now yes, give it a while and see how you feel about that

My house has more than doubled in value in five years. Nothing else in my investment portfolio can touch that return. Not to mention the huge tax advantages. It might be an expensive B!TCH on a monthly basis, but it does pay.
Assuming you're not planning on moving out of your house, how does this help you any? (And if you move into a similarly priced house elsewhere, it's all a wash anyway.) Can you sell 20% of your house and rebalance your portfolio? Or can you reasonably lock in the gains? (It's what you might do if you owned some stock that had wildly outperformed. What about with your house? Sure... you can move into a cheaper house. Would you actually do it?) And what tax advantages? You're getting a fractionth of your interest payments back.

House ownership is great, and I plan on owning a house someday (not while in grad school, though). But I think its financial rewards are wildly exaggerated by many.

Interesting analysis... some good things to consider, but this also shows how everyone looks at these situations a bit differently.

Two things spring to mind:

1. If I was going to spend $3000 per month on a mortgage, I doubt my rental alternative would be a $1000 per month apartment.Again, it varies by location and market. Real-estate can be either a killing or boat-anchor depending upon area and timing. It goes in cycles, and those in the market at the end of the '80s knows it took 10-years to break even. The point I'm making is that the extra monies that most people have to come up with to buy a property can have alternate investment possibilies as well. Often times with greater rates of return. Just because RE has skyrocketed in 10 to 5-years ago doesn't preclude the decades of stagnation before that in many areas. It's only the highly desirable areas which represent a minority of properties that have actually done the rapid appreciation.



b. Why do you factor the property tax outside of the mortgage? I know for me, I'd consider that as part of the cost of a house in that area, and hence a part of my monthly housing budget.True, I ran it off a different model where it's calculated outside. In my three examples, it would've exaggerated the loss of a mortgage and lessened the gain of owning outright. Property taxes of course, aren't paid by renters, but is incorporated into the rent.



We ran the numbers about 18 months back and decided to buy. We were paying $1000 per month, gas and electric not included, for a 1000 sq ft apartment, and wanted something bigger. To rent a 1400 sq ft townhome or a 1600 sq ft house would have been about $1400. We now pay about $1000 per month mortgage, including property tax, for a 2000 sq ft house in roughly the same area. While we could afford to spend a lot more on a house, this one fits the two of us and the cat fine, and costs a lot less to run than a 3500 sq ft home. Factor in the tax advantage for us and that we waited for a motivated seller and bought at a good price, even with some maintenance we come out ahead each year before appreciation.That's a great deal. It varies on area and market-conditions. You have to make the comparison on the same property for the analysis to be valid. Pedex could also have done the same with the rental argument by saying he found a cheaper place to rent with the same sq.footage. Or he could say that he sold his house, got rid of the mortgage and found another rental for cheaper. You have to compare the rental vs. mortgage on the same place. The spread between rental-prices and mortgage-payments is almost directly proportional to the appreciation rate. After quite a few years of 15% gains, there's a glut of rentals here now as too many people are in over their heads with interest-only ARMs, and maxing out their payments. It's a 1:4 ratio here to rent vs. mortgage on the same property... Foreclosures are on the rise, +25% this last month over the same month last year... I'm getting my RE license for a reason... for when banks have to dump foreclosed properties... :)



The advice to make extra payments is definitely good. One option is to up each month's payment e.g. by the standard principal payment amount. Another option is to make mortgage payments every 4 weeks instead of every month - works out to one extra payment per year, which typically reduces a 30 year loan to 24 years, saving a heckuva lot of interest. Another good tactic is to make payments twice monthly. Divide the payment by 1/2 and send it in every two weeks. The early 2-week payment of 1/2 the mortgage ends up saving you a tonne of money overall.



Assuming you're not planning on moving out of your house, how does this help you any? (And if you move into a similarly priced house elsewhere, it's all a wash anyway.) Can you sell 20% of your house and rebalance your portfolio? Or can you reasonably lock in the gains? True, someone brought this up in the previous real-estate discussion. I order to take advantage of the appreciation, you'd have to sell the house. In which case, where do you live? If you end up buying a comparable place, you'd be paying a similar price to what you sold your previous house for, with all of the profit unusable because it had to be reinvested in the new house. What a lot of people do is take out equity loans with the bet that their interest on the loan is lower than the appreciation-rate of the house. Tough gamble, especially if you're on an ARM. Another way to profit from it is to use options. It's more common in commercial properties, but allows you to extract the profit without tying up a lot of cash for a long period of time.

That's a great deal. It varies on area and market-conditions. You have to make the comparison on the same property to the analysis to be valid. Pedex could also have done the same with the rental argument by saying he found a cheaper place to rent with the same sq.footage. Or he could say that he sold his house, got rid of the mortgage and found another rental for cheaper. You have to compare the rental vs. mortgage on the same place. The spread between rental-prices and mortgage-payments is almost directly proportional to the appreciation rate. After quite a few years of 15% gains, there's a glut of rentals here now as too many people are in over their heads with interest-only ARMs, and maxing out their payments. It's a 1:4 ratio here to rent vs. mortgage on the same property... Foreclosures are on the rise, +25% this last month over the same month last year... I'm getting my RE license for a reason... for when banks have to dump foreclosed properties... :)

Interesting - that is a massive spread. If I was running numbers like that, there'd be no way I'd buy!

I have noticed that with the tax advantages of mortgages in the US, in a large number of areas where you compare buying vs. renting a similar place, buying does come out better... more so than in many other countries (Of course, there are areas where that may not be the case). However... if you only afford to put 5% down, it becomes a much riskier proposition.

One thing I like about having a mortgage (which was 30% down), is that I can leverage that money for other investments and other mortgages... because foreclosures rock! Not for the people who got foreclosed on, but for me they do :). There's a lot of money out there in doing fix-n-flips on foreclosed dumps! :D Coming to this country only a few years ago and without US credit history (the bastards won't recognize credit history from anywhere else!!!!), having a mortgage was absolutely the best way to get the banks to lend me more money so that I can make more money :).

Assuming you're not planning on moving out of your house, how does this help you any? .


well, consider in some neighborhoods that go south, value decreases, stays flat etc and so on.
Knowing you're gaining gives a solid feeling if you wanted to move,or sell and tells you you are on the right track as far as improving your property if you wanted to.

Assuming you're not planning on moving out of your house, how does this help you any? (And if you move into a similarly priced house elsewhere, it's all a wash anyway.) Can you sell 20% of your house and rebalance your portfolio?

I would imagine he could use the extra equity he has now to purchase an investment property elsewhere, or alternatively purchase stock / shares. That way the property boom in his area can help him.

Assuming you're not planning on moving out of your house, how does this help you any? ...

I'm waiting for mine to double...then I'm outa here!

Assuming you're not planning on moving out of your house, how does this help you any?

Today it doesn't help. Except that war and cozy feeling inside. Were I to sell, well the profit is tax exempt. The mortgage expenses are deductable as well. Further, I can improve my property to garner greater returns. Pick them wisely and do quality work yourself and you get back 105% of the "retail" value when the permit is closed. So says the appraisers (county and private) and the market. Better still I'm in the city where gentrification is moving quite nicely. Some long-range infrastucture improvements done in Minneapolis will also be done less than a mile from my home soon as well. This, based on others' experience, should rapidly drive up our value. Cash-out in 20 years and move to a place less heavily taxed and cheaper to live. It's a time proven strategy. Our household is particularly well positioned compared to our friends.

Meanwhile in the investment portfolio...
Pretty much everything tanked 2000-2002. Some of the short term returns on, say, energy or environmental resources are doing very well. But again, long term it pales in comparison to the real esate gains. Sure, it's all or nothing at cash-out, but I NEED a roof over my head.

20 years? dude, unless you experience huge increases in your income, in 20 years you wont be there, you wont be able to afford your heating bill........

It's been here 85. Income projections beat inflation nicely. Not sure about your worries, but mine are in hand.

My wife takes care of the mortgage. I just fix stuff. :D

It's been here 85. Income projections beat inflation nicely. Not sure about your worries, but mine are in hand.

Natural gas for heat?