The pros and cons of home (or apartment) ownership are different for traders:
1. We have highly irregular income - so taking on debt, and spending cash, is much more risky than for people in regular jobs.
2. We can (hopefully) earn high return on capital - so tying up cash is very costly compared to regular people who earn pitiful amounts on their savings.
3. We are highly mobile and can live anywhere, we aren't tied to one job location.
Given all this, I want to consider the pros and cons of buying a residence vs just renting.
1. Renting can be a hassle - landlords can throw you out, you have to get references and paperwork, they can visit and check up on you, institutions are suspicious of renters etc.
2. Renting is very flexible - no maintenance, can move fast and easily etc.
3. Renting frees up cash to trade with, boosting your income (if you can scale your strategy).
4. Renting has less risk - major repairs, nightmare neighbours, property crime etc.
5. Renting leaves you exposed to long-term increases in nominal property prices.
6. Renting avoids the risks of debt.
So, assuming you have enough cash to buy a reasonable residence without any debt, which is the best option for a consistent trader?
There's no correct answer because there's too many variables involved that you've not mentioned...
Kids, Single, Divorce, Location, New Home versus Old Home, Definition of Consistent Trader, Affordability and many others not mentioned.
Thus, what's right for you will be wrong for someone else due to any of the above variables. Just the same, some of the things you listed as Pros will Cons to someone else and vice versa.
The pros and cons of home (or apartment) ownership are different for traders:
1. We have highly irregular income - so taking on debt, and spending cash, is much more risky than for people in regular jobs.
2. We can (hopefully) earn high return on capital - so tying up cash is very costly compared to regular people who earn pitiful amounts on their savings.
3. We are highly mobile and can live anywhere, we aren't tied to one job location.
Given all this, I want to consider the pros and cons of buying a residence vs just renting.
1. Renting can be a hassle - landlords can throw you out, you have to get references and paperwork, they can visit and check up on you, institutions are suspicious of renters etc.
2. Renting is very flexible - no maintenance, can move fast and easily etc.
3. Renting frees up cash to trade with, boosting your income (if you can scale your strategy).
4. Renting has less risk - major repairs, nightmare neighbours, property crime etc.
5. Renting leaves you exposed to long-term increases in nominal property prices.
6. Renting avoids the risks of debt.
So, assuming you have enough cash to buy a reasonable residence without any debt, which is the best option for a consistent trader?
A 15 year is 2.875% right now.
You can still get an fha for less than 5% down.
The good thing about a mortgage is it is a forced savings account coupled with a tax break.
So if you trade for 14 years and in year 15 you blow up and lose it all you could always sell the house, buy another one for less than 5% down and still have 95% of the proceeds to live off of while you figure out your next step.
The good thing about a mortgage is it is a forced savings account coupled with a tax break.
So if you trade for 14 years and in year 15 you blow up and lose it all you could always sell the house, buy another one for less than 5% down and still have 95% of the proceeds to live off of while you figure out your next step.
even better if you own a multiunit and let the tenants pay off a portion of the mortage
