"Harry Krause" wrote in message
...
NOYB wrote:
"DSK" wrote in message
...
So, who is actually the smart one here?
PocoLoco wrote:
NOBBY!

He's the one who will be pocketing the money while the rest of you are
telling
him how foolish he is!
If he can really afford a $5000/m home payment on an interest-only
mortgage, and is *gambling* that his home equity will rise fast enough
to both pay off the home and provide a good financial return, wouldn't
he be better off living cheaper and investing that $5k/m?

How would I pocket $5k/mo if I lived in some place cheaper? Even a
cheaper place would have a mortgage, taxes, and insurance. Perhaps you
meant to say "pocket a portion of the savings"?

A similar home to mine that is *not* on the water would run about
$550-600k. But the ones that aren't on the water are appreciating at
half the rate as the ones that are on the water. I'd wager any amount of
money that I couldn't save enough money living in a house off the water
to come anywhere near the amount of appreciation that I'm seeing by
living on the water.

Here's an example:
Suppose a million dollar house on the water appreciates 10% per year
(they've been averaging more than three or four times that rate over the
last 10 years though). That's $150k. Suppose the $500k home that is
not on the water appreciates 5% (once again, an extremely conservative
figure). That's $25k. So the equity of the guy on the water is outpacing
the other guy's equity by $125k each year. If the mortgage payment on
the million dollar home is $5k/mo. and the $500k home is $2500/mo., then
the guy who is not on the water can put away about $30-40 k more (the
extra $5k is for additional taxes and insurance) each year in savings.
But that's still a lot less than the $125k net advantage in equity growth
for the waterfront homeowner.


Close your eyes, change a few words, and you sound like a degenerate
gambler.

I might be a degenerate...but I'm no gambler. I take well-calculated risks
only...and always leave a safety net.