What is your house value/current unpaid principal?

I sleep like a baby. My income is more than enough to support the payments but the bigger point is that cheap debt is the most valuable investment opportunity going today. You can put 4x leverage at sub-4% on an asset that should appreciate at min 3% a year. That means approximately an 8% net return as a base case. Now if we rent house 2, and rents appreciate at the rate they're expected to / have historically, that asset could be generating an additional 30% cash on cash return in 10 years.

Compare that to bonds at historically low yields and stocks at very rich valuations (in a sluggish economy no less) and investment real estate is one of the most attractive wealth creation opportunities available to the mass public. People that are putting all their savings into paying down their mortgage are also reducing the leverage that creates such a magnified opportunity and this reducing the potential upside (in percentage terms).

I could change this equity / debt ratio quickly if I wanted, but frankly, I think it's stupid to do so unless one has achieved his/her long term wealth / savings goal ... which I most certainly have not.

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03/06/2014 10:21

Subject: What is your house value/current unpaid principal?

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Anonymous

Roughly $515k, which is about 30K less than we paid for it. (We tried to sell for what we paid 7 years ago and the only bite was at $515k, so that's how I'm judging value.)

Owe $380k.

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03/06/2014 10:41

Subject: What is your house value/current unpaid principal?

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Anonymous

$700ish, around $390K.

I liked it better in my old house - $335K and about $100K. But this house is nicer and closer-in.