Wether you plan to live there or not in 30 years is irrelevant to the situation.
Your tenant pay over half the mortgage. So you get a subsidized housing, keep the appreciated value of the duplex as well and all that for the basic maintenance of the property?
I think they’re not considering how the portion of rent that only goes toward the mortgage is still profit despite it not being accessible until the home is sold or a loan taken against its equity.
It’s absolutely relevant if you know how a mortgage works. Payments are ~75% interest in the first decade. I’m not going to have enough equity at that time to make a profit after all the money I put into the house. I’m looking at a $50k loss if the market stays steady. Still cheaper than renting, though.
Yes, my tenant subsidizes my living costs. That’s the point of a duplex. I set the rent at what I thought was fair, given my expected losses and the work I put in.
There’s no shortage of housing here. If my tenant wanted to, he could buy a house right now. He’s waiting until he retires, specifically because he doesn’t want the responsibilities of home ownership while he’s still working.
Wether you plan to live there or not in 30 years is irrelevant to the situation.
Your tenant pay over half the mortgage. So you get a subsidized housing, keep the appreciated value of the duplex as well and all that for the basic maintenance of the property?
Golly, what a deal.
I think they’re not considering how the portion of rent that only goes toward the mortgage is still profit despite it not being accessible until the home is sold or a loan taken against its equity.
They never do. They want to be cashflow positive every month and still keep the equity.
It’s absolutely relevant if you know how a mortgage works. Payments are ~75% interest in the first decade. I’m not going to have enough equity at that time to make a profit after all the money I put into the house. I’m looking at a $50k loss if the market stays steady. Still cheaper than renting, though.
Yes, my tenant subsidizes my living costs. That’s the point of a duplex. I set the rent at what I thought was fair, given my expected losses and the work I put in.
There’s no shortage of housing here. If my tenant wanted to, he could buy a house right now. He’s waiting until he retires, specifically because he doesn’t want the responsibilities of home ownership while he’s still working.