With the housing market in the shape it’s been in lately, sometimes not mortgaging a home is better than buying a dwelling for more than it’s worth. Martin C. had made some wise real estate investments over the years, but used caution during the late-2000s housing bust, pulling out last minute from signing a mortgage that could have cost him hundreds of thousands of dollars.
He took a practical, financially literate approach to the situation and made his money work for him, saving enough to buy another home down the road. Here’s his story:
I was lucky…when I first came over here in 2004 I had a house in the U.K. which I sold and made a decent profit on (I’d flipped three houses in six years). In 2005, I literally had put $30,000 down on a 2-bedroom new condo in Irvine, CA, which was almost at the peak of the housing boom. Luckily for me, personal circumstances made me pull out of the house, I got my deposit back and never bought.
The house I was buying was on the market for $620,000; a similar house now is selling for around $420,000!
So I figure even with paying rent for the last eight years at around $2,000 a month, I’m about $300,000 better off. However, the ex got all that I saved (I’d have paid double to get rid of her), so it was a wash, but it could have been way, way worse if I had bought a house.
I’m now looking to buy a place and hopefully will be able to get the same house in a decent neighborhood for way less … and then buy another as an investment, as rent per square foot is due to keep rising in the Southland.
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