Skip to main content

Real Estate Update

 It has been a while since I talked about my experience in real estate and with the craziness of covid, it seemed like a decent time to talk about this. I have spent some time thinking about this given that I live in a high cost of living part of the United States. What this means in short is that it generally costs me more than average folks to pay for my basic expenses like housing, food and healthcare. While I am fortunate in that I have a degree that pays well, I'm not so naive to think that is the end of the story.

What makes sense for me at this stage for my life is different than what seemed reasonable in my 20s. Now, by the zillow zestimate, I have about 40% equity in my home after a little more than 3 years. Looking back briefly, it has been an interesting ride. I bought the property with about 20% down about 4 years ago. Then, I spent about 10k on repairs/painting etc. Next, I went to pay off ahead of schedule, often sending in principle payments of several hundred dollars every few months and pre-paying some of the payments. 

Refinancing followed not long thereafter when I decided that it made sense to make sure that I had the best situation given the way the economy looked pre-covid. Fast forward another couple of years and I had continued paying ahead and done some minor renovations. 

The question for many people in this kind of situation is whether or not to payoff the mortgage. And I think that is something that people really need to be thinking about and consider for their long-term security. For me, I am diversifying by looking at other kinds of investing opportunities besides just the stock market and my home. I think that is really important to make sure that I am not over exposed either in the marker or in my home. I'll talk more in future posts about this, but for now, I am looking at crowd-funded investments as well as different government sponsored options and crypto. Anything like this that has the ability to preserve some purchasing power is important as both an inflation hedge and a general diversifier.

Comments

Popular posts from this blog

Do Better With Your Time

Recently, I've been extremely busy with some work commitments. The interesting thing for me is that this increased work activity has really helped crystallize some of my feelings with regard to time. And these ideas are a critical part about my view on personal finance. I'm curious to know if others feel similarly. Time is money. That is, Time, in some way, contains energy. Money, is also energy. In the act of working, I am able to compound and increase the amount of money that I have. I am exchanging my time and effort and thought which are components of my work, for the productivity that I produce. And this production gets me money from my employer. However, the first dollars that I make each day, week, or month are the most valuable. Then the ones that I make at the end are the most valuable. (Forget about taxes for a minute.) The reason is, the first ones help me have a place to live and food to eat. And the last ones are the ones that I can use to really improve my life lo...

Awkward Family Money Situations

I was about to write this as a comment, but its quite long and brings up a ton of issues so here goes. First, check out  <a href=" http://hereverycentcounts.blogspot.com/2007/06/money-and-etiquette-why-are-important.html ">this story at here every cent counts</a>. Now on to my response. I am just mortified by this story. I cannot even imagine that people with kids would expect someone in college to pay for their own dinner. I'm assuming that this is an aunt/uncle/great aunt/great uncle situation and that you are a young college student in late teens, early twenties with no full time job. All of my answers below are based on those assumptions. If that is the case, they should *splurge* the 20 bucks for dinner. They are an adult here and as much as I believe that you should be independent, while you are in college and struggling for money, you should be treated on an occasion like this. Big Question: How do your mom and/or dad and/or other immediate family ...

On Buying a Lifestyle...with a Fixed-Rate Mortgage

Despite all of the back and forth about sub-prime mortgages and the housing bubble, I am feeling just fine. The reason is that when purchasing, I followed some old advice: Don't expect to flip. In general, I've been told by many people that you shouldn't buy a home unless you plan to hold on to it for 7 years or longer. If the market does well and you decide to sell, fine. But if you want to be sure not to lose money, don't buy something that you only want for a year or two. I've been in my current location for more than 3 years. I like it. And I have no intention of leaving in the short or medium term. It seems to me, that real estate, like any asset class, has its ups and downs. But as a practical point, I don't look at my home as an asset per se. Rather, I consider it to be a fixed expense that I need to survive, much like food and water. Therefore, as long as the payment is reasonable and it functions to keep me warm and sheltered and comfortable, that is a...