You buy a house for 450k, you pay on average 8% over the life of the loan.
That's $98 per day in interest, $690 per week, $35500 per year. In interest, nothing else.
Add another $18000 per year to pay off the capitol.
At the end of the 25 year loan, you have payed $887,000 in interest.
That's not including maintanence, water, rates electricity blah blah blah.
Lets say you rent a house of the same size for say $400 per week. That's 20,800 per year, in 25 years you have payed $520,000.
Cost over 25 years
Buying 1,337,000 (just in loan repayments)
Lets say you sell the house at the end of it for 600k, you are still $150k worse off than if you had rented.
That's without investing that extra 800k over that 25 year period.
Yes a house can be a good investment, but stop saying renting is dead money.
With a mortgage you are paying the house off 3 times.
so in 25 years of owning the asset it has appreciated only $150k . hahaha i dont think so.
average house price increases in the past ( im not saying this trend will continue ) has been 100% every 7-10 years .
therefore your $450k asset should appreciate in the order of 250% easily over 25years. so $1.125mil
It's nice to think that trend will keep on going, but I dont think you will find many people that will agree that it will. It's completely unsustainable at the moment
Implying rent prices won't change in 25 years