From: "Gary Slusser" 
Newsgroups: misc.invest.real-estate misc.invest.stocks misc.invest misc.consumers.frugal-living misc.consumers.house
Subject: Re: Let me get your opinion
Date: Wed, 15 Oct 2003 13:40:11 GMT


"Charles Quinn"  wrote
>  joeygibb@aol.com (Just me) wrote:
> >Hello,
> >
> >I am 29 years old and own a house. I don't have any other debts
except
> >my mortgage. I am planning to pay off my house in 15-20 years or so.
> >I am putting 12% of my income in my 401k and also save some every
> >month.
> >
> >The real estate market has been appreciating in this town around 5-6%
> >for the last 10 years and buildable lots have appreciated anywere
from
> >10-15%/year.
> >
> >Right now the market seems to favor buyers but I think in the long
> >term (5-10 years) the average return will be around 5-6% a year. This
> >is my opinion and I may be wrong.
> >
> >I am considering buying this lot but currently I don't have any
> >intention to build on this property. However, I am willing to keep it
> >5-10 years and sell it for a profit.
> >
> >Is there another factor I should consider before making decision to
> >buy this lot?
> >
> >PS - If I do buy this lot, I will finance 80% of the value of the lot
>
> Take the extra money and pay off your current mortgage. You are then
getting a
> guaranteed return of your current interest rate, WITH NO RISK!
>
> Don't worry about your tax break. It is a fallacy. Yes you get a break
from
> Uncle Sugar, but you are still paying the bank for that honor. Last
year when
> I did my taxes with and without my mortage, it cost me $2300 in
interest to
> have $300ish lower taxes. Take your own return and see how many
thousands it
> is costing you to get hundreds less in taxes. Subtract out your
interest
> payments and see what the difference is. Take that difference and
compare it
> with how much interest you paid to get that pittance.
>
> I am now mortgage free and will gladly pay that lower tax bill than
that
> higher mortgage tax, er interest payments.
> -- 
>
> Charles
> Indifference = Consent

I've been trying to tell people that for 25 years. Most don't listen.
And when it comes to looking at 'profit' on their last house sale, they
haven't a clue because they miss including many of the costs such as
this, but there are more.