Why is everyone obsessed about housing?
Nov 30, 2018
103 Comments
Why is everyone on blind so maniacal about buying a house?
Especially in the Bay, you lock in hundreds of thousands of dollars for down payment and you ensure yourself a life of slavery by paying an insanely fat mortgage every month that puts so much stress on you, then 3 years from now you change job and your commute now becomes twice as long just because you can’t move closer to work because of your house.
Why can’t you just rent a smaller place close to work and invest everything somewhere else? (E.g. rental real estate where it actually makes sense and reasonable price/rent ratio, or stock market index funds).
Is it because you have big families and many kids?
Age: 32
TC: 400k
NW: 1.2M (all in vanguard)
comments
With rental properties you can put 25% to 30% down and have the rent cover the PITI and other expenses. Thus as long as rent doesn’t decrease year by year you will never face a ‘margin call’.
With stocks, you get margin call when its price goes down (which is much more likely than rent going down yoy). And I honestly can’t find any stock that pays enough dividends to cover a hypothetical 30-year mortgage on itself.
I wish my job could motivate me more so I work harder and make more. But it looks like I will be my own boss at some point in the future and get rid of this job.
Owning a SFH is still a good idea financially if you are staying in SF longterm. SFHs are mediocre investments but they are still better than index funds if you don’t trade it too often.