Key insights
- The user questions the perceived profitability of real estate investments when considering the total interest paid over a 30-year mortgage. They argue that the 'real price' of a $400k home with 6% interest over 30 years is closer to $850k, implying a significant loss if sold for $600k. This perspective highlights the substantial cost of borrowing and its impact on long-term returns, suggesting that current discussions may overlook the true financial burden of real estate ownership under high-interest-rate environments, potentially acting as a bearish signal for future housing market activity and related equity sectors.
Im not sure which subreddit to post this in... If I'm looking to buy real estate, let's say a property cost 400k. I get a 30yr loan at 6%. the real price of the home is closer to 850k. You paid 450k in intrest for a 400k home(400+450=850). lets assume you sell the house for 600k. did you profit 200k or did you loose 250k? Maybe if you get someone else to pay the rent for you over 30 years it "feels" diffrerent but the math is the same. I somewhat understand that with inflation and leverage it can feel different but tell me why my point is irrelevant and not talked about?