Hi all!

It's amazing how different perspectives can be SUCH an eye opener...

I had a conversation with a friend this last week who made that title comment. "EVERTBODY is buying real estate." And you know what, she was right! EVERYBODY is buying real estate. Those that own their house outright, they've already bought, but they're still buying...by paying the taxes and insurance on the house.

The homeowner with the mortgage (whether they owe more or less than the house is worth is irrelevant) is buying real estate. While they pay the bank a mortgage every month, and only a fraction of that payment actually goes towards that principal payment, that homeowner is buying real estate, too.

But what about the renters? They don't pay a mortgage, they pay rent. Well, actually, a renter IS paying a mortgage. While some rental properties are owned outright, the majority have a mortgage on them. So as a renter, that $1300 a month rental payment goes to the homeowner, or apartment owner, and they in turn use that money to pay the mortgage, taxes and insurance, as well as maintenance, repairs and upkeep of the property. The advantage? The owner of that property gets the tax benefits of owning it. While the owner may get a cashflow (or, maybe not), depending on repairs and maintenance, they get to write off those costs. They also get a depreciation deduction--which also helps to lower that tax bill.

SO, while your entire house payment doesn't go towards paying down your principal, when you think of it, paying 5 percent on a mortgage, I think I would rather have my "rent" go towards my own mortgage payment, but that's just me.

What about you?