I've used a system for decades now. I thought I'd share it with anyone reading this blog.
I bought my 3rd house in 1985. I got it on a sealed bid. It was a Hud Repo.
The payments were $650 a month (which I couldn't afford).
So, I had to rent the house out. It rented for $850 a month.
The excess rent payed a third of my apartment payment.
And there goes the lesson I learned.
Since then, I've paid off 2 houses.
I bought another house in Summerlin, and the rent one of my houses made the Summerlin payment.
What I'm saying is, since property values are increasing, and since they are a leveraged investment,
it doesn't make sense to sell your home when you need cash.
Don't kill the Golden Goose. Refinance.
If you absolutely can't make ends meet, move out and RENT your old place.
If you pick your financing wisely you will almost certainly make a profit.
The American Way
Pick good financing
20 years ago, it was logical to pay off your mortgage balance. Mortgage rates were as high as 18%.
Your house would have to double in value every 4 years, just to break even on the payments.
Now, interest rates are right around 6%. You house only has to double in value every 12 years to break even.
In other words, if your house doubles in value in 12 years, you were out of pocket $0 on payments.
If you believe that inflation will continue (as I do, just by looking around me), then you will invest in more property,
and you will not pay it off.
All this means is, Borrow More! Buy More! Its the American Way.
Plantation owners didn't have to pick the cotton, simply because they owned. They let other people do it.
Homeowners don't have to pay their mortgage either, if they let a renters cover it.
So, if anyone is complaining about illegal aliens taking our jobs
Don't! Rent to them. They can't buy houses.