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Home Values WTF


Geeesammy

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i consider anything i own that is worth more than i owe by a margin of 20% to be an asset. people can view things differently, but that is how i see it. that is why i will always put 20% or more down on a car/house/etc.

 

i understand your argument, and i don't think its wrong to look at things that way. you see the guy who has a $200k house, and has $100k equity, $100k mortgage as just breaking even at best. the reality is that if he dies tomorrow, his family can unload the house immediately for $200k-20%, and pay off his mortgage, and have $60k liquid cash. he sees it as a physical asset that has tangible value, against which he can borrow money, and eventually sell at some point for a profit---most would consider that an asset.

 

when you drive a car off the lot, most would tell you that the car is immediately worth 20% less. if you put 20% down on the car and have to sell it in a hurry, you've broken even and the car is neither an asset or liability. because you use it for transportation, gas/maintenance/insurance don't necessarily make it a liability because seemingly you couldn't function without it. the same reason your clothes aren't a liability because of the detergent you spend money on to wash them, or your body is a liability because you have to spend money to feed it.

 

i'm not trying to give the op a lesson in economics. there are advantages to renting and simply not taking the risk of owning property

 

I didn't go back and quote your original post, but I have largely been considering selling my personal house and renting until the market corrects itself. I can sell for a ~60k or so profit now and pick up a rental that would pay my rent at an apartment and wait for the market to correct and go buy another house.

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If you own a car outright, is it an asset or a liability? Same concept essentially.

 

It doesn't matter if you own it outright; an asset is just something you have that has value, full stop. If you borrow $100k to buy a classic Porsche, you have an asset (the Porsche) and a liability (the bank note), and if you owned a business this is exactly how you'd record it on your balance sheet. This is literally accounting 101, which I know because that's the extent of the accounting I took in college.

 

What are we arguing about again?

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It doesn't matter if you own it outright; an asset is just something you have that has value, full stop. If you borrow $100k to buy a classic Porsche, you have an asset (the Porsche) and a liability (the bank note), and if you owned a business this is exactly how you'd record it on your balance sheet. This is literally accounting 101, which I know because that's the extent of the accounting I took in college.

 

What are we arguing about again?

 

 

Lol I wasn't trying to argue, just trying to bring up a point and put it more directly as in owning something outright versus having equity and a payment. I agree with you though.

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It doesn't matter if you own it outright; an asset is just something you have that has value, full stop. If you borrow $100k to buy a classic Porsche, you have an asset (the Porsche) and a liability (the bank note), and if you owned a business this is exactly how you'd record it on your balance sheet. This is literally accounting 101, which I know because that's the extent of the accounting I took in college.

 

What are we arguing about again?

 

I wonder if everyone on this site looks at everything in life so black and white.

 

I understand accounting (like you, just the basics...I hated it in college), but there are alternative ways to view things. That's all I'm trying to portray. I'm sorry some of you can't see outside of your 1976 thought process.

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So for the last 2 years I've casually been looking for a house, haven't gotten in contact with a realtor or anything, but just "keeping tabs" on the market and seeing what to expect when I am ready to buy.

 

Today I've spent a solid 2 hours looking on Zillow around Cbus and most (90%ish) of the houses I've clicked on have been followed by a "How in the hell?" response. I know it's a sellers market right now, but some of the prices I've seen just seem insanely high. Is this just a Columbus thing or is it the new normal for awhile? I'm scared to buy anything other than a crackhead deal because I'm sure as soon as I do buy the market will tank.

 

Am I the only one who feels this way? Or is this just normal first time home buyer stuff?

 

I know you aren't actually looking but for reference what, roughly, are you looking for? The market is obviously hot as you are seeing but so much of it depends on the price range and location. We are in a weird time in the history of homes where more people then ever are looking and paying for turn key homes while at the same time home renovation and upgrades have never been hotter.

I'd say it will be interesting to see where things go from here. My best example is my last house. It was built in 03 for 146,000. foreclosed on, I bought it and sold this spring for 135,000 it's probably now worth right around 140,000. In many areas homes are only now getting back to where they were when they were built. If they should or shouldn't be worth that is another conversation...

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It doesn't matter if you own it outright; an asset is just something you have that has value, full stop. If you borrow $100k to buy a classic Porsche, you have an asset (the Porsche) and a liability (the bank note), and if you owned a business this is exactly how you'd record it on your balance sheet. This is literally accounting 101, which I know because that's the extent of the accounting I took in college.

 

What are we arguing about again?

 

We are arguing Mr Brad and Ms Laurens definition of an asset, cant find the answer in accounting 101 need to consult rich dad who sells books to sheep.

 

If we are arguing how you view something I could care less, but you cant go around saying something is not an asset when it clearly is.

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We are arguing Mr Brad and Ms Laurens definition of an asset, cant find the answer in accounting 101 need to consult rich dad who sells books to sheep.

 

Tell me again, how many properties do you own? Those books have enabled my thought process to own 10 houses at age 26 and an asset base of nearly a million dollars.

 

If you're fine going to work Monday-Friday every day for the rest of your life, hoping for a 2% increase in your 401k so you can afford one vacation a year after you retire at 65, be my guest.

 

Sheep :dumb:

 

 

PS: thanks for at least recognizing me as a Mr.

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What happens when you buy that house for 235k and the. Two years later it's only worth $185? Is that an asset or liability?

 

The problem is a house SHOULD go up on value but many times values drop. Do you k ow how many of my friends bought houses in 2005-2007 in south Florida when price were sky high and now they are 100k under water.

 

Again if you go by basic accounting then a house is an asset to most people. It's the largest purchase hey will ever make. If you think of finances from a business mind and view revenue steam you won't consider your house an asset. It's a liability all day every day

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Tell me again, how many properties do you own? Those books have enabled my thought process to own 10 houses at age 26 and an asset base of nearly a million dollars.

 

If you're fine going to work Monday-Friday every day for the rest of your life, hoping for a 2% increase in your 401k so you can afford one vacation a year after you retire at 65, be my guest.

 

Sheep :dumb:

 

 

PS: thanks for at least recognizing me as a Mr.

 

Who only gets 2%?

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What happens when you buy that house for 235k and the. Two years later it's only worth $185? Is that an asset or liability?

 

It's a $185k asset. That was easy.

 

The problem is a house SHOULD go up on value but many times values drop. Do you k ow how many of my friends bought houses in 2005-2007 in south Florida when price were sky high and now they are 100k under water.

 

Who says house values SHOULD do anything? There's no accounting rule that says that. Previous bad decisions don't warrant altering common vocabulary.

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It's a $185k asset. That was easy.

 

 

 

Who says house values SHOULD do anything? There's no accounting rule that says that. Previous bad decisions don't warrant altering common vocabulary.

 

You bought for 235 and have a mortage for 235+ but can only sell for 185. How in gods name is this an asset?

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You bought for 235 and have a mortage for 235+ but can only sell for 185. How in gods name is this an asset?

 

Because it's real property, and real property is an asset. The asset is 185k, the liability is $235k, and your equity is -50k

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You bought for 235 and have a mortage for 235+ but can only sell for 185. How in gods name is this an asset?

 

Give the house to me then, it's just a liability so I'll take if off your hands.

 

Oh, you want me to take the mortgage too? No, I just want the house part. The mortgage is yours.

 

 

OK, thanks, now I have a house that's worth $185k, it's an asset. You still owe the bank $235k, that's your liability.

 

Make sense? The concept is the same even if you and me are the same person.

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Tell me again, how many properties do you own? Those books have enabled my thought process to own 10 houses at age 26 and an asset base of nearly a million dollars.

 

A few, and used to own a lot more, and used to help run a company that was 10 fold the size of you. Not to mention grew up in the business, and started working on the business side when I was ~14.

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You bought for 235 and have a mortage for 235+ but can only sell for 185. How in gods name is this an asset?

 

i considered buying a house in florida for the year i was there---in 2008. the house we rented for a year was for sale at $320k. at the end of the year, no shit, those houses cost $240k. what a crazy mcsteak that would have been.

 

i lived in hilliard for 5 years, in a house i paid $134k for. my late grandfather gave me $15k to put down on the house and i did NUMEROUS upgrades---tile, redid the kitchen, bathrooms, and finished the basement--all my own labor. i sold the house to my brother for $125k---without a realtor. he lived in it for 5 years and sold it for a slight loss when he went on to fellowship in 2013. he was pissed---how could he be? it was just the 'unluck' of the market.

 

renting gets rid of that risk/anxiety/etc. invest your money elsewhere and not be tied down to a house unless you know you're going to be there for 10 years. most people in their 20's have no fucking idea that they are going to be in one location for 3-4 years, let alone 10. when you rent, you can get up and move at any time, and not worry about a thing. there is some value to that. again, just food for thought.

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A few, and used to own a lot more, and used to help run a company that was 10 fold the size of you. Not to mention grew up in the business, and started working on the business side when I was ~14.

 

Then it's surprising you don't know how to view assets and liabilities from a business standpoint vs. accounting standpoint.

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Then it's surprising you don't know how to view assets and liabilities from a business standpoint vs. accounting standpoint.

 

Ummmmm, because there is no such difference. It's some viewpoint that was made up by the rich dad guy back in the 90's that wasn't worded correctly and he has stuck to it.

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