The first house I ever owned was a condo I bought in 2005, way out in the sticks, because the further I got from the city the cheaper the houses got, and because I had a strong suspicion that housing prices were too damn high.
By the time I had to move to CA for work in 2009 of course the market had crashed badly and the condo was well underwater, not even counting the $20k I had put into the kitchen and bathroom.
It was a $185k 2BR 1.5BA unit, with a condo fee of $300/mo and a monthly payment (principle + interest) of $980 with a 3/1 ARM at 3.5%. I got lucky because the rate was indexed to the LIBOR and it was being manipulated to ~0% back then, so my rate stayed super low even though it was adjusting every year.
I put the unit on the market for $165k for two months and got zero showings. So I offered it for rent at $1400 on Craigslist and it was rented that weekend.
I just sold the property last year, to the person who was renting it (and had been for 4 years) for $185k. I gave him the last 4 months before closing rent free because we closed without any broker (no commission) and because I didn’t have to do a thing to the unit pre-closing, seeing as how he was already living there.
Not all landlords are scum out to make a buck on the back of tenants they never met and don’t care about. Not all landlords are even in it because they initially set out to be! And very few landlords are being “fed” half of someone’s paycheck, but more like, covering the costs plus a few percentage points, as long as nothing unexpected happens.
I own a condo too. And if I move I probably won't sell it, but rather rent it out until I move back (while living in a rented place of my own). Individual home ownership is not a problem, it should be encouraged. The problem is people (and REITs) who lever up with a bunch of properties to be fed half of people's paycheck in the manner described.
I will nitpick and say that paying your mortgage is not a cost. That is equity you're getting.
You are very confused. A mortgage is definitely a cost. It's only meaningful equity if you ever sell it and get any of the money back, which is not guaranteed at all.
And only public housing would collapse the entire economy. Plenty of countries tried this, most notably the commies in Russia and in eastern Europe.
I agree with you when it comes to a mortgage or real-estate only really being worth what it will actively sell for. Real estate by at large isn'r really liquid. I've known a lot of young people who are too quick to take out huge loans and get into "house flipping" only to realize that they're now playing a risky waiting game of when they'll have enough equity to match the cost of fees to actually sell the house combined with the assumption that they'll be able to sell it.
However, as someone who's lived in a large urban area with public housing - I can confidently say that the only real benefit public housing has is reducing the price of high end real-estate in close proximity and increasing petty crime in the area.
Source - lived in the South End neighborhood of Boston proper.
By the time I had to move to CA for work in 2009 of course the market had crashed badly and the condo was well underwater, not even counting the $20k I had put into the kitchen and bathroom.
It was a $185k 2BR 1.5BA unit, with a condo fee of $300/mo and a monthly payment (principle + interest) of $980 with a 3/1 ARM at 3.5%. I got lucky because the rate was indexed to the LIBOR and it was being manipulated to ~0% back then, so my rate stayed super low even though it was adjusting every year.
I put the unit on the market for $165k for two months and got zero showings. So I offered it for rent at $1400 on Craigslist and it was rented that weekend.
I just sold the property last year, to the person who was renting it (and had been for 4 years) for $185k. I gave him the last 4 months before closing rent free because we closed without any broker (no commission) and because I didn’t have to do a thing to the unit pre-closing, seeing as how he was already living there.
Not all landlords are scum out to make a buck on the back of tenants they never met and don’t care about. Not all landlords are even in it because they initially set out to be! And very few landlords are being “fed” half of someone’s paycheck, but more like, covering the costs plus a few percentage points, as long as nothing unexpected happens.