If it makes you feel better, depending on how long you hold onto the place, even if property value "goes down", it's still a win in terms of equity.
I've tried listening to Daddies explain this several times now. Daddies says property is paying 10% and tying up 100% of something - 10 cents on the dollar, essentially. So even if your $1 drops to $0.90, you're not taking a hit, even if you have to wait 5-10 years for it to go back up to $1. And while you're paying interest on the mortgage, there are tax breaks an' stuff. (Okay, so Daddies did not say "stuff", but that was about where I got lost. I think it all relates to the return on your investment when your money's tied up in property as opposed to banks. It's like 'when is a dollar not a dollar' with the answer of 'when the dollar ties up $10 in investment'...)
Anyways. See why I get lost? Maybe I can get Dad to explain it later....
Eh, oh well. Hey, if this Annapolis thing works out, I'll be looking between there & EC for housing, if you're entertaining the thought of a roommate to help alleviate costs of rent/mortgage...
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branchandroot
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Date: 2005-01-27 03:04 am (UTC)I've tried listening to Daddies explain this several times now. Daddies says property is paying 10% and tying up 100% of something - 10 cents on the dollar, essentially. So even if your $1 drops to $0.90, you're not taking a hit, even if you have to wait 5-10 years for it to go back up to $1. And while you're paying interest on the mortgage, there are tax breaks an' stuff. (Okay, so Daddies did not say "stuff", but that was about where I got lost. I think it all relates to the return on your investment when your money's tied up in property as opposed to banks. It's like 'when is a dollar not a dollar' with the answer of 'when the dollar ties up $10 in investment'...)
Anyways. See why I get lost? Maybe I can get Dad to explain it later....
Eh, oh well. Hey, if this Annapolis thing works out, I'll be looking between there & EC for housing, if you're entertaining the thought of a roommate to help alleviate costs of rent/mortgage...