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0 pointsMrKristopher7y ago0 comments

> I think for most folks actually living in these high cost areas, capital appreciation is not the primary motivation.

It's somewhat subconscious. Why pay $3000 rent when you can pay a $5000 mortgage when you and all your friends agree that the house purchase is a great thing? The average buyer isn't seeking capital appreciation, but they are confident that the house is a good purchase.

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timcederman7y ago

Just curious, are you in the area? It's anecdotal, but the folks I know here who are buying tend to do it because they are either sick of the landlord/tenant dynamic, or because of their family. In addition (also very anecdotal, but N of >10) the ones I know who are buying for investment are usually more focused on solid rental cashflow rather than capital appreciation (although it of course still factors into the purchase decision).

MrKristopherOP7y ago

Hi, yes, in the area. I hear from friends who buy (also very anecdotal). It seemed to me that people generally saved heavily toward a downpayment, then bought when they could (i.e. not worrying about how leveraged they were or what the rent/buy calculators said).

Interesting that the investment buyers are looking for cash flow; I didn't like the numbers (4 cap!?). But maybe if you have enough $$ that rate is fine.

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timcederman7y ago

MrKristopherOP7y ago

Interesting that the investment buyers are looking for cash flow; I didn't like the numbers (4 cap!?). But maybe if you have enough $$ that rate is fine.

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