Is there any disadvantage to buying a house outright?

QuarterTon · #1 10-12-2007, 10:24 PM

yeah sorry i wasnt clear about that. what i meant to say was in one situation u have a mortgage and are paying some arbitrary amount and the interest on the amount that you borrowed. Not only would u save the mortgage payment but you would also save the interest.

in the other situation where you were just renting you would save the rent costs, maintanence costs, and property taxes.

What i was trying to figure out was if you are able to pay for a place in cash is it better to either 1) paying for it in cash and have no mortgage or 2) keeping a mortgage and using the rest for investments?

What I was thinking of doing personally was just continue to save and grow my portfolio and when I have enough to buy a place just go ahead and cash it in and buy a place outright. Just wondering if theres any obvious disadvantage to this that I'm missing or if this plan is just bad in general.

T50_Omaha8 · #2 10-12-2007, 10:41 PM

The complicating factor is that interest on mortgage payments is tax deductible from your income. This little quirk dramatically shapes our housing market.

#3 10-12-2007, 11:11 PM

jaydub · #4 10-12-2007, 11:43 PM

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Now imagine if you took that $250k that you would have used to buy that one house in cash and you put it down as a down payment on 10 properties, then after one year refinanced all of them and took out your equity and used that to buy still more properties and then a year later...

You create a blog called iamfacingforeclosure.com

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Ganjasaurus Rex · #5 10-13-2007, 02:24 PM

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The complicating factor is that interest on mortgage payments is tax deductible from your income. This little quirk dramatically shapes our housing market.

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One thing to keep in mind is that your total itemized deductions (including mortgage interest) must exceed your standard deduction to get any benefit from it.

QuarterTon · #6 10-13-2007, 04:00 PM

sweet, thanks for all the info in this thread i've learned a ton already.

QuarterTon · #7 10-13-2007, 04:50 PM

hmmm something that I havent really figured out is a situation where i would be forced to sell due to being cash poor. Something like poor health, future children... anything else thats blatently obvious that im missing?

Ray Zee · #8 10-13-2007, 06:40 PM

what you are missing is that lots/ most, gamblers end up blowing off their winnings at some point. so if your house is paid for you still have something and get to have low expenses while trying to pump up again. if you blow it all when liquid you got nothing. this may not pertain to you but it sure does to most.
i think a gambler should carry no debt if he can. then he can play his best while under little pressure.

SlowHabit · #9 10-13-2007, 07:37 PM

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what you are missing is that lots/ most, gamblers end up blowing off their winnings at some point. so if your house is paid for you still have something and get to have low expenses while trying to pump up again. if you blow it all when liquid you got nothing. this may not pertain to you but it sure does to most.
i think a gambler should carry no debt if he can. then he can play his best while under little pressure.

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stephenNUTS · #10 10-13-2007, 09:01 PM

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what you are missing is that lots/ most, gamblers end up blowing off their winnings at some point. so if your house is paid for you still have something and get to have low expenses while trying to pump up again. if you blow it all when liquid you got nothing. this may not pertain to you but it sure does to most.
i think a gambler should carry no debt if he can. then he can play his best while under little pressure.

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The problem is ...most BROKE/SICK GAMBLERS will then sell there house for whatever price by whatever means

I guess its a double edged sword then?

If you want to find ANY success in poker,.......-EV gambling(sports betting,pit games,stupid prop bets,etc)must be eliminated to be successful!

SF