[Create]

Originally Posted by Zippy58

OK, I have a new example situation that I have been thinking about take part in... Is this considered a Liability or an Asset? I'm not sure.

I'm a newly college grad thinking about buying an inexpensive 3 BR house and renting the other 2 rooms to some friends that are still in college. It's a win-win because were all paying rates much cheaper than renting but I'm building equity on the house correct? If I only stay in the house for 3 or 4 years and sell I would get money based on the mortgage payments they we paid so it would be good for me and they would live there for like 225 a month in a house and not some crummy college apt. right?

Is this a good idea for someone in my position?

I would say this is a good idea, depending on a few factors:

1) location of the home/college. Will you be able to sell this home in a few years, and if so for a profit? or atleast level out? Remember realtors cost on average 6% of your home sale, so you have to sell it for more than you purchased it to even level out.

2) You make your roomates sign a lease. You don't want people leaving you with the whole mortgage payment

3) You don't trash the property


It is always a good idea to live in a home and have some other way to pay the mortgage payment than yourself. Especially if you own the property.

[jasaunders]

Yes, this is a very good idea.
Just make sure you charge them enough to cover not only the portion of the mortgage you want, but also things like property taxes, repair and maintenance that goes into a house.
But as an investment, this is very good. Just keep in mind the things from the post above as well.

[Create]

Originally Posted by jasaunders

Yes, this is a very good idea.
Just make sure you charge them enough to cover not only the portion of the mortgage you want, but also things like property taxes, repair and maintenance that goes into a house.
But as an investment, this is very good. Just keep in mind the things from the post above as well.

This is a good note as well. When you setup your mortgage though you will be allowed(or made) to have the lender setup escrow accounts to pay property taxes, home insurance, and PMI (if you didn't put down 20%). The mortgage company will pay these items for you with the money they pull from your mortgage payments.

This takes away from you having to worry about it. Now you will have to setup some sort of savings to keep for repairs and emergencies.

[Paint and Air Sportz]

Originally Posted by Val3360

Buying a house is usually an asset, but say you buy a house in an area that is booming for $800,000.00. Before you know it, the market's bubble has burst and houses are sitting unsold for years at a time... The economy in that area becomes depressed and the value of your home dramatically declines and is now worth only $500k, and you are still left owing $700+

Big "what if", I know, but it is an example of ahome being a liability vs an asset

The same thing could be said for other assets, what if a stock price falls dramatically?

But what most people dont understand, is that by the time you pay off your mortgage youev may have paid 2 or 3 times more then what youev bought it for thanks to inflation.

[DXTINC]

Originally Posted by Paint and Air Sportz

But what most people dont understand, is that by the time you pay off your mortgage youev may have paid 2 or 3 times more then what youev bought it for thanks to inflation.

NO, inflation has nothing to do with it.

When you read the words of a known hack like kiyosaki it's easy to get confused.

[TheCDAllenGroup]

Originally Posted by DXTINC

When you read the words of a known hack like kiyosaki it's easy to get confused.

Spoken by the mouth of a jealous man.

[sniping4dummies]

Ok let me voice my opinion...


Basically until you have your house paid off, it's the bank's asset and your liability. Here's what I am doing in my situation.

I paid $124k (Tennessee is cheap as hell) for a 5br house in a nice neighborhood. A realtor friend of mine was trying to get some money to fund a large project, and sold the house to me for about 70% of it's value. The first thing that I'm doing is adding another room to my house...which will be about 1000 sq ft...which will raise the approx. square footage to about 3800.

My plan is to put a bit of money in (20-30k) to make my additions and just generally make things nicer. The house was remodeled a year ago by my realtor friend, so the hard work is done and I'm just adding some detail =).

My plan is to resell the house in 2-3 years (we have a rapidly expanding real estate market in my area, as opposed to most parts of the country right now, so home values are going up instead of down), and I think I can get 200-225k for it, which would be a nice lump sum to have in my pocket =).

Anyways...the catch here is that until I get the loan payed off, or at least get to the point where I have more paid off than I owe, my house is the bank's asset and my liability.

I considered renting out my full, finished basement for $650/month, and renting out a room upstairs to one of my friends for $300, but upon further inspection I found that I would have to claim this income - an additional $11,400 per year. Since this money would be going straight towards the mortgage, and I would still have to pay tax on it, it wouldn't really be money made anyways, so it kind of seemed like going backwards.

What I ended up doing was moving out of my office on the square and converting my basement to an office. I deduct roughly 50% of my mortgage payment as a tax deduction. Also, instead of charging rent to my friend, who is now my roommate, pays cable and utilities, so I'm eliminating an expense instead of claiming more income =D.

I talked to an accountant before I did this and made sure everything was legal and would work out. Hope this helps somebody...but my point is your house can be an asset (in my case, it saves me money on my taxes, gives me a great place to live and work, and I will be able to sell it for nearly double what I bought it after making my additions), or it can be a serious liability. There were over 1 MILLION foreclosures last month alone due to payment default....

[DXTINC]

Originally Posted by TheCDAllenGroup

Spoken by the mouth of a jealous man.

Yeah, that's it. Kiyosaki is a swindler, a proven liar, and a snake oil salesman who made his money via the likes of you....yes, I'm jealous. Get a clue kid and stop being ignorant.

[TheCDAllenGroup]

Originally Posted by DXTINC

Yeah, that's it. Kiyosaki is a swindler, a proven liar, and a snake oil salesman who made his money via the likes of you....yes, I'm jealous. Get a clue kid and stop being ignorant.

Unless you can prove these blasphemous comments, keep them and any other jealous comments to yourself.

By the way, where are your millions and best-selling book?

[DXTINC]

Originally Posted by TheCDAllenGroup

Unless you can prove these blasphemous comments, keep them and any other jealous comments to yourself.

By the way, where are your millions and best-selling book?

Get off of Kiyosakis nutsack for a moment and think for yourself with that baboon brain of yours. You sound lilke the stereotypical MLMer who regurgitates what others have implanted into their brain as truths.

I do not have a best selling book nor have I ever claimed to. So, in your thinking anyone who has a book is a success?

If you choose to believe a liar, so be it. If you choose to take advice from a person who makes up a stories, fine.

[TheCDAllenGroup]

Originally Posted by DXTINC

Get off of Kiyosakis nutsack for a moment and think for yourself with that baboon brain of yours. You sound lilke the stereotypical MLMer who regurgitates what others have implanted into their brain as truths.

I do not have a best selling book nor have I ever claimed to. So, in your thinking anyone who has a book is a success?

If you choose to believe a liar, so be it. If you choose to take advice from a person who makes up a stories, fine.

I'm going to ignore that unintelligent babble of yours that you call a rebuttal and advise you again. Unless you can prove these blasphemous comments, keep them to yourself.

This is a PUBLIC forum, therefore these allegations of yours need to be substantiated with credible evidence.

Unless you are able to provide documentation to support your claims, do not attempt to post in this thread anymore. If I was a moderator on this forum, I'd ban you.

Good day.