3K a month for Rent.
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Aussiesuede
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PostPosted: Wed Oct 03, 2018 11:19 am    Post subject:

LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:


Cool, thank you. So you're telling me, buy up all 3 houses and live in one. That's the most optimal financial strategy.

But, if I decided to rent them all out and use the rental income to live in Apt D, then that would be a waste of money?

As long as I live in a house that I own, it's saving money?


Optimal financial strategy? Buy a Box Truck and turn it into a studio apartment. Rent out all three houses, and pay zero rent for yourself. Financially, That would be Optimal.


Ok, scratch optimal financial strategy then. Can you just answer my question? I'm trying to have a discussion with you.

So let's get back to the original scenario of owning 1 house, House A

So if I buy House A for $3k mortgage and then I live in House A, you're ok with that?

But if I buy House A for $3k mortgage and rent it out for $3k, use that $3k to go rent House B for $3k, you're not ok with that?

Am I correct?

As long as I'm living in House A, I'm not wasting money because I'm living in the house that I bought, right?


Check the video. It's actually a realistic strategy that many are entertaining.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 11:21 am    Post subject:

Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:


Cool, thank you. So you're telling me, buy up all 3 houses and live in one. That's the most optimal financial strategy.

But, if I decided to rent them all out and use the rental income to live in Apt D, then that would be a waste of money?

As long as I live in a house that I own, it's saving money?


Optimal financial strategy? Buy a Box Truck and turn it into a studio apartment. Rent out all three houses, and pay zero rent for yourself. Financially, That would be Optimal.


Ok, scratch optimal financial strategy then. Can you just answer my question? I'm trying to have a discussion with you.

So let's get back to the original scenario of owning 1 house, House A

So if I buy House A for $3k mortgage and then I live in House A, you're ok with that?

But if I buy House A for $3k mortgage and rent it out for $3k, use that $3k to go rent House B for $3k, you're not ok with that?

Am I correct?

As long as I'm living in House A, I'm not wasting money because I'm living in the house that I bought, right?


Check the video. It's actually a realistic strategy that many are entertaining.


Ok, but is it possible you answer the question though?
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Aussiesuede
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PostPosted: Wed Oct 03, 2018 11:24 am    Post subject:

LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:


Cool, thank you. So you're telling me, buy up all 3 houses and live in one. That's the most optimal financial strategy.

But, if I decided to rent them all out and use the rental income to live in Apt D, then that would be a waste of money?

As long as I live in a house that I own, it's saving money?


Optimal financial strategy? Buy a Box Truck and turn it into a studio apartment. Rent out all three houses, and pay zero rent for yourself. Financially, That would be Optimal.


Ok, scratch optimal financial strategy then. Can you just answer my question? I'm trying to have a discussion with you.

So let's get back to the original scenario of owning 1 house, House A

So if I buy House A for $3k mortgage and then I live in House A, you're ok with that?

But if I buy House A for $3k mortgage and rent it out for $3k, use that $3k to go rent House B for $3k, you're not ok with that?

Am I correct?

As long as I'm living in House A, I'm not wasting money because I'm living in the house that I bought, right?


Check the video. It's actually a realistic strategy that many are entertaining.


Ok, but is it possible you answer the question though?


I apologize. I don't know any other way to answer your question.

Renting = Burning Money

Buying = Saving Money


no matter what way you try to slice it up, that's still the end result
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 11:26 am    Post subject:

Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:


Cool, thank you. So you're telling me, buy up all 3 houses and live in one. That's the most optimal financial strategy.

But, if I decided to rent them all out and use the rental income to live in Apt D, then that would be a waste of money?

As long as I live in a house that I own, it's saving money?


Optimal financial strategy? Buy a Box Truck and turn it into a studio apartment. Rent out all three houses, and pay zero rent for yourself. Financially, That would be Optimal.


Ok, scratch optimal financial strategy then. Can you just answer my question? I'm trying to have a discussion with you.

So let's get back to the original scenario of owning 1 house, House A

So if I buy House A for $3k mortgage and then I live in House A, you're ok with that?

But if I buy House A for $3k mortgage and rent it out for $3k, use that $3k to go rent House B for $3k, you're not ok with that?

Am I correct?

As long as I'm living in House A, I'm not wasting money because I'm living in the house that I bought, right?


Check the video. It's actually a realistic strategy that many are entertaining.


Ok, but is it possible you answer the question though?


I apologize. I don't know any other way to answer your question.

Renting = Burning Money

Buying = Saving Money


no matter what way you try to slice it up, that's still the end result


Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine
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Aussiesuede
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PostPosted: Wed Oct 03, 2018 11:27 am    Post subject:

LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 11:28 am    Post subject:

Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine
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Aussiesuede
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PostPosted: Wed Oct 03, 2018 11:30 am    Post subject:

LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting house B instead of buying is guaranteed to waste the earned Income you're spending.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 11:33 am    Post subject:

Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting hose B instead of buying is guaranteed to waste the earned I come you're spending.


Ok. Thanks for the conversation bro! I think we can see where we both differ.
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ringfinger
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PostPosted: Wed Oct 03, 2018 5:50 pm    Post subject:

Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting house B instead of buying is guaranteed to waste the earned Income you're spending.


Correct. Here's the primary difference. In BOTH scenarios, you're paying $3K/month to live.

However, in scenario 1, the $3K/month you're paying is working for you because you're essentially buying into an appreciating asset.

In scenario 2, you're paying the same $3K/month, but since you're renting, the $3K/month that you are paying is NOT working for you.

So if you are in a situation where you own a home, and then get a job offer in a different area that requires you to move, the optimal strategy would be to rent out the first home for $3K/month, and then buy the second home and pay $3K/month mortgage on the second home.

So now you have TWO appreciating assets, one of which a renter is buying into on your behalf, and the second, that you're buying into on your own behalf.

When all is said and done, if you're going to have to pay $3K/month to live, would you rather own two homes or one?
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 5:57 pm    Post subject:

ringfinger wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting house B instead of buying is guaranteed to waste the earned Income you're spending.


Correct. Here's the primary difference. In BOTH scenarios, you're paying $3K/month to live.

However, in scenario 1, the $3K/month you're paying is working for you because you're essentially buying into an appreciating asset.

In scenario 2, you're paying the same $3K/month, but since you're renting, the $3K/month that you are paying is NOT working for you.

So if you are in a situation where you own a home, and then get a job offer in a different area that requires you to move, the optimal strategy would be to rent out the first home for $3K/month, and then buy the second home and pay $3K/month mortgage on the second home.

So now you have TWO appreciating assets, one of which a renter is buying into on your behalf, and the second, that you're buying into on your own behalf.

When all is said and done, if you're going to have to pay $3K/month to live, would you rather own two homes or one?


Well, let's total up both scenarios:

1) You own House A in both scenarios
2) You pay $3k mortgage in both scenarios
3) You have a house to live in, in both scenarios (House A or House B)

What makes it so important to have to live in House A?
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ringfinger
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PostPosted: Wed Oct 03, 2018 6:06 pm    Post subject:

LongBeachPoly wrote:
ringfinger wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting house B instead of buying is guaranteed to waste the earned Income you're spending.


Correct. Here's the primary difference. In BOTH scenarios, you're paying $3K/month to live.

However, in scenario 1, the $3K/month you're paying is working for you because you're essentially buying into an appreciating asset.

In scenario 2, you're paying the same $3K/month, but since you're renting, the $3K/month that you are paying is NOT working for you.

So if you are in a situation where you own a home, and then get a job offer in a different area that requires you to move, the optimal strategy would be to rent out the first home for $3K/month, and then buy the second home and pay $3K/month mortgage on the second home.

So now you have TWO appreciating assets, one of which a renter is buying into on your behalf, and the second, that you're buying into on your own behalf.

When all is said and done, if you're going to have to pay $3K/month to live, would you rather own two homes or one?


Well, let's total up both scenarios:

1) You own House A in both scenarios
2) You pay $3k mortgage in both scenarios
3) You have a house to live in, in both scenarios (House A or House B)

What makes it so important to have to live in House A?


You don't have to live in House A. But in your two examples, you are paying $3K/month to live regardless, right?

Would you rather your $3K/month go into an appreciating asset or to someone else?
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 6:12 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
Aussiesuede wrote:
LongBeachPoly wrote:
[

Then I'll break it up into 2 questions for you

If I buy House A and pay $3k mortgage and move in to live in it, that is ok with you and considered saving money correct?

Yes or no is fine


Yes


And if I buy House A and pay $3k mortgage but then I rent it out for $3k, then I use that $3k to rent House B, that is considered wasting money correct?

Yes or no is fine


Yes, renting house B instead of buying is guaranteed to waste the earned Income you're spending.


Correct. Here's the primary difference. In BOTH scenarios, you're paying $3K/month to live.

However, in scenario 1, the $3K/month you're paying is working for you because you're essentially buying into an appreciating asset.

In scenario 2, you're paying the same $3K/month, but since you're renting, the $3K/month that you are paying is NOT working for you.

So if you are in a situation where you own a home, and then get a job offer in a different area that requires you to move, the optimal strategy would be to rent out the first home for $3K/month, and then buy the second home and pay $3K/month mortgage on the second home.

So now you have TWO appreciating assets, one of which a renter is buying into on your behalf, and the second, that you're buying into on your own behalf.

When all is said and done, if you're going to have to pay $3K/month to live, would you rather own two homes or one?


Well, let's total up both scenarios:

1) You own House A in both scenarios
2) You pay $3k mortgage in both scenarios
3) You have a house to live in, in both scenarios (House A or House B)

What makes it so important to have to live in House A?


You don't have to live in House A. But in your two examples, you are paying $3K/month to live regardless, right?

Would you rather your $3K/month go into an appreciating asset or to someone else?


If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine
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ringfinger
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PostPosted: Wed Oct 03, 2018 6:21 pm    Post subject:

LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 6:26 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.


Cool.

Question 2

If I buy that same House A, pay a mortgage for $3k but decide not to live in it, so I rent it out for $3k. Then I use that rental income to go live in House B, is that considered wasting money?

yes or no is fine
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ringfinger
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PostPosted: Wed Oct 03, 2018 6:29 pm    Post subject:

LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.


Cool.

Question 2

If I buy that same House A, pay a mortgage for $3k but decide not to live in it, so I rent it out for $3k. Then I use that rental income to go live in House B, is that considered wasting money?

yes or no is fine


Well, the answer is, it depends. If you buy House B, then no. If you rent House B, then yes. Because by renting House A, you are generating income. So now that you have that income, what are you doing with it?

If you spend it on rent, it is going to the landlord. If you spend it on another mortgage, you are giving some of it to the bank and the rest back to yourself with interest.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 6:33 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.


Cool.

Question 2

If I buy that same House A, pay a mortgage for $3k but decide not to live in it, so I rent it out for $3k. Then I use that rental income to go live in House B, is that considered wasting money?

yes or no is fine


Well, the answer is, it depends. If you buy House B, then no. If you rent House B, then yes. Because by renting House A, you are generating income. So now that you have that income, what are you doing with it?

If you spend it on rent, it is going to the landlord. If you spend it on another mortgage, you are giving some of it to the bank and the rest back to yourself with interest.


ok, and last question.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree. No rental money exchanges hands.

Is this considered wasting money?

yes or no is fine
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ringfinger
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PostPosted: Wed Oct 03, 2018 6:35 pm    Post subject:

LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.


Cool.

Question 2

If I buy that same House A, pay a mortgage for $3k but decide not to live in it, so I rent it out for $3k. Then I use that rental income to go live in House B, is that considered wasting money?

yes or no is fine


Well, the answer is, it depends. If you buy House B, then no. If you rent House B, then yes. Because by renting House A, you are generating income. So now that you have that income, what are you doing with it?

If you spend it on rent, it is going to the landlord. If you spend it on another mortgage, you are giving some of it to the bank and the rest back to yourself with interest.


ok, and last question.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree. No rental money exchanges hands.

Is this considered wasting money?

yes or no is fine


No, it's not wasting money because 100% of your living expenses are invested into an appreciating asset.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 6:38 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
If I don't have to live in House A, what's the issue then?

I'll ask you the same questions I asked the other guy.. I'll break them down into a series of questions.

I just want to know exactly where it is that you disagree.

Question 1

If I buy House A, pay a mortgage for $3k and live in House A, is that considered wasting money?

yes or no is fine


No, it's not because you are investing your living expenses into an appreciating asset.


Cool.

Question 2

If I buy that same House A, pay a mortgage for $3k but decide not to live in it, so I rent it out for $3k. Then I use that rental income to go live in House B, is that considered wasting money?

yes or no is fine


Well, the answer is, it depends. If you buy House B, then no. If you rent House B, then yes. Because by renting House A, you are generating income. So now that you have that income, what are you doing with it?

If you spend it on rent, it is going to the landlord. If you spend it on another mortgage, you are giving some of it to the bank and the rest back to yourself with interest.


ok, and last question.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree. No rental money exchanges hands.

Is this considered wasting money?

yes or no is fine


No, it's not wasting money because 100% of your living expenses are invested into an appreciating asset.


ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?
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PostPosted: Wed Oct 03, 2018 6:44 pm    Post subject:

LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until near the 30th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.
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PostPosted: Wed Oct 03, 2018 6:50 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until the 29th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.


ok, so I guess we found out where you have an issue with. You have an issue with the actual exchange of rental income. As long as it's a barter and no rental income is exchanged you're ok with.
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ringfinger
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PostPosted: Wed Oct 03, 2018 6:59 pm    Post subject:

LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until the 29th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.


ok, so I guess we found out where you have an issue with. You have an issue with the actual exchange of rental income. As long as it's a barter and no rental income is exchanged you're ok with.


Nope. The issue I have is with who receives the money you pay for your living costs.

You have a choice to give 100% of the money you're going to pay to live either to another person, or, you have the choice to give around 75% of the money you're going to pay to a bank and the remaining 25% back to yourself plus interest.

Which again, after 10 years, if you rent your neighbors house you will still be paying 100% of the money you're going to pay to that person, but if you buy, then you will be giving around 60% of that money to the bank and 40% of it back to yourself plus interest.

10 years after that, you'll still be paying 100% of your living expenses to someone else if you rent, but if you bought, you will instead be giving 40% of that money to a bank and 60% of it back to yourself plus interest.

So you'll have to figure out how you come to the conclusion that if faced with the decision to give 0% of the money you pay to live to yourself, or, pay some percentage of your living cost between 25% and 99% right back to yourself, you'd choose the former.
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 7:02 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until the 29th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.


ok, so I guess we found out where you have an issue with. You have an issue with the actual exchange of rental income. As long as it's a barter and no rental income is exchanged you're ok with.


Nope. The issue I have is with who receives the money you pay for your living costs.

You have a choice to give 100% of the money you're going to pay to live either to another person, or, you have the choice to give around 75% of the money you're going to pay to a bank and the remaining 25% back to yourself plus interest.

Which again, after 10 years, if you rent your neighbors house you will still be paying 100% of the money you're going to pay to that person, but if you buy, then you will be giving around 60% of that money to the bank and 40% of it back to yourself plus interest.

10 years after that, you'll still be paying 100% of your living expenses to someone else if you rent, but if you bought, you will instead be giving 40% of that money to a bank and 60% of it back to yourself plus interest.

So you'll have to figure out how you come to the conclusion that if faced with the decision to give 0% of the money you pay to live to yourself, or, pay some percentage of your living cost between 25% and 99% right back to yourself, you'd choose the former.


Let me rephrase, when my neighbor and I exchanged houses, with no rental income exchanging hands, you were ok with that.

When my neighbor and I exchanged houses, with rental income exchanging hands, you were not ok with that.

So you are not ok with rental income exchanging hands.
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Aussiesuede
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PostPosted: Wed Oct 03, 2018 7:10 pm    Post subject:

LongBeachPoly wrote:



I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?



This scenario would be a disaster for both you and your neighbor.

1. Since you would no longer be occupying your home as your primary residence there would be negative ramifications for both your & his mortgage interest deduction. While you both would no longer be able to claim a mortgage interest deduction, you will be able to deduct the mortgage interest from your income noted in part 2 below.

2. Both you and your neighbor would have to pay taxes on an additional $36,000 in income.
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ringfinger
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PostPosted: Wed Oct 03, 2018 7:23 pm    Post subject:

LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until the 29th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.


ok, so I guess we found out where you have an issue with. You have an issue with the actual exchange of rental income. As long as it's a barter and no rental income is exchanged you're ok with.


Nope. The issue I have is with who receives the money you pay for your living costs.

You have a choice to give 100% of the money you're going to pay to live either to another person, or, you have the choice to give around 75% of the money you're going to pay to a bank and the remaining 25% back to yourself plus interest.

Which again, after 10 years, if you rent your neighbors house you will still be paying 100% of the money you're going to pay to that person, but if you buy, then you will be giving around 60% of that money to the bank and 40% of it back to yourself plus interest.

10 years after that, you'll still be paying 100% of your living expenses to someone else if you rent, but if you bought, you will instead be giving 40% of that money to a bank and 60% of it back to yourself plus interest.

So you'll have to figure out how you come to the conclusion that if faced with the decision to give 0% of the money you pay to live to yourself, or, pay some percentage of your living cost between 25% and 99% right back to yourself, you'd choose the former.


Let me rephrase, when my neighbor and I exchanged houses, with no rental income exchanging hands, you were ok with that.

When my neighbor and I exchanged houses, with rental income exchanging hands, you were not ok with that.

So you are not ok with rental income exchanging hands.


That's correct. Because when you just exchange houses, your cost to live is being 100% invested in an asset that will appreciate over time.

When rental income exchanges hands however, your cost to live is being 100% handed over to your neighbor.

Why would you rather give money to your neighbor, than just keep it for yourself when given those options?
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LongBeachPoly
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PostPosted: Wed Oct 03, 2018 7:28 pm    Post subject:

ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ringfinger wrote:
LongBeachPoly wrote:
ok, actually I'd like to ask another question.

Same scenario as question 3, with a slight change.

I buy House A for $3k mortgage, but I don't want to live in it. I go talk to my neighbor who owns House B. I tell him, hey, how about I go live in your house and you live in my house? His house has a pool and my house is right next to the golf course, so we both agree.

This time rental money exchanges hands. Every month he gives me $3k for my property and I give him $3k for his property.

IS this considered wasting money?


Yes. Unless you don't consider giving another man $36,000 per year a waste of money when you could instead be giving a bank $22,400 per year and yourself $6,600 per year, with those numbers shifting in your favor each and every year until the 29th year when it becomes somewhere around giving the bank $500 per year and yourself $35,500 plus interest.


ok, so I guess we found out where you have an issue with. You have an issue with the actual exchange of rental income. As long as it's a barter and no rental income is exchanged you're ok with.


Nope. The issue I have is with who receives the money you pay for your living costs.

You have a choice to give 100% of the money you're going to pay to live either to another person, or, you have the choice to give around 75% of the money you're going to pay to a bank and the remaining 25% back to yourself plus interest.

Which again, after 10 years, if you rent your neighbors house you will still be paying 100% of the money you're going to pay to that person, but if you buy, then you will be giving around 60% of that money to the bank and 40% of it back to yourself plus interest.

10 years after that, you'll still be paying 100% of your living expenses to someone else if you rent, but if you bought, you will instead be giving 40% of that money to a bank and 60% of it back to yourself plus interest.

So you'll have to figure out how you come to the conclusion that if faced with the decision to give 0% of the money you pay to live to yourself, or, pay some percentage of your living cost between 25% and 99% right back to yourself, you'd choose the former.


Let me rephrase, when my neighbor and I exchanged houses, with no rental income exchanging hands, you were ok with that.

When my neighbor and I exchanged houses, with rental income exchanging hands, you were not ok with that.

So you are not ok with rental income exchanging hands.


That's correct. Because when you just exchange houses, your cost to live is being 100% invested in an asset that will appreciate over time.

When rental income exchanges hands however, your cost to live is being 100% handed over to your neighbor.

Why would you rather give money to your neighbor, than just keep it for yourself when given those options?


Ok.

Yeah, seems like you're all for the barter system.
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