DConf 2013 Day 3 Talk 1: Metaprogramming in the Real World by Don Clugston

[Steven Schveighoffer]

On Tue, 11 Jun 2013 23:40:29 -0400, Walter Bright  
<newshound2 at digitalmars.com> wrote:

> On 6/11/2013 6:54 PM, Steven Schveighoffer wrote:
>> My profit on my first condo, which I bought in '99 and sold in '05 was  
>> 150% of
>> the *purchase price*.  Minus the 6% commission :)  Although, it was  
>> only 3%
>> because a family friend who is a real estate agent did not charge me  
>> her half.
>> And I only had about 5% equity of the purchase price invested when I  
>> sold.
>
> Consider that you rode the real estate boom using leverage. But that  
> lever works both ways, as many found out to their horror a few years  
> later. You can lose a lot more than 100% of your investment when you  
> lever.

Absolutely.  But you can continue to live in an underwater-mortgage house  
if you can pay for it.  The problem is when you buy a house that is beyond  
your means.  Which a lot of people did.

> I've ridden a couple booms successfully, too. I made the mistake of  
> thinking that was business acumen. It wasn't, as I got a very rude  
> comeuppance on the back slope of the boom.

I don't have enough history yet, but so far, my real estate moves have  
been adequate, maybe a bit fortunate.  It helps to have a friend in the  
business :)  I certainly don't profess to be a professional real-estate  
investor.  But I believe if I had chosen to rent, my current state would  
be VASTLY different than it is now now, and that wasn't exactly because of  
a bolt of lightning, it was an educated choice.

It also helps not to live on the west coast, where house prices can be  
outrageous.

> I live in the land of the Microsoft zillionaires. It's fun talking to  
> them about their wealth. Most of them realize that they're worth $20m  
> because lightning struck them, and behave prudently. A few delude  
> themselves into thinking they are wealthy because they are business  
> geniuses, and wind up getting reset to zero. Microsoft stock has been  
> flat for 13 years now, and it isn't going to happen again to them.
>
> I don't mean to discourage anyone from shooting for the stars in  
> building their investments, I just want to point out that owning a home  
> is far from the sure path to wealth it is too often presented as. As  
> always, caveat emptor.

Home ownership for *living* in, is not for wealth.  It's for living.  You  
compare it to renting.  How much more/less does it cost to own vs. rent,  
and you have to consider the mortgage tax deduction, the property tax  
deduction, the equity you build, etc.  It's not just a direct comparison  
of payments.  This is all I'm trying to say.  It can cost more to live in  
a house payment-wise, but you can be better off financially.  It all  
depends on how much more or less it is.  And the variables are  
tremendously varied across the country and even between two adjacent towns.

Home ownership for *investment* is a completely different ballgame.   
There, you're comparing it to *not investing*, which costs you nothing :)

-Steve