Re: Buy Within My Range or Get the Most Home? - Posted by dewCO
Posted by dewCO on December 21, 2000 at 09:10:29:
Carol is right on the qualifying. 75% of the lease will go to off set your loan debt and HOA monthly payment on the TH. I would think the spread between the $170 and $225 purchase prices wouldn’t need to be that large. However the anser to which is better depends on whether you are more conservative and less I think. There isn’t any right answer it’s what allows you to sleep best at night.
I would think you could get a SF house that doens’t max you out, that would appreciate as much as a $225k house, I know I could in my area. Also, hopefully you know enough about your HOA that you aren’t goig to get any surprises there with any special assessments or large increase in dues any time soon.
The idea in Kiyoski’s book is that your own home is not an income producing asset and therefore it is a liablity and you wan to limit or exclude all your liabilites in order to create wealth. Therefore he says if you have to buy with a loan, don’t max yourself out, so you still have cash flow to make investments that will enable you to create wealth. Most people live over the this line, he feels, and that is why most people have no wealth and acculmulate lots of debt and liabilities, i.e. credit card debt, car payment debt, etc.