Quote:
Originally Posted by Merch
I think you guys are missing the typical leveraging factor of a house. Let’s say you purchase a house for 200k and put 40k down or 20%. Now the house increases 5% or 10k. You have just made 25% on your money. So, the leveraging factor is very important when figuring rate of return.
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Very true and that is an important point. However, that leverage really only comes into play if you sell the property. And then, while your home has increased in value by 5%, all the homes around you have probably done the same, so wherever you move is then more expensive than a year earlier unless you downsize or leave the area. We've been in our home for 14 years and have no plans to move. The leverage issue isn't all that relevant to us.
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