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willthrill81 wrote: ↑
Fri Feb 14, 2020 1:28 pm
cashboy wrote: ↑
Fri Feb 14, 2020 11:56 am
the majority of opinions on the 'house scenario' (including in this thread) are that most side with
'rental property = real estate part of an AA' (and is also part of net worth)
'non-rental property is not part of the real estate part of an AA' (but is part of net worth).
And that is a fallacious view in my opinion. Renting out the current property and then renting out another place for yourself should not logically change your AA.
The viewpoint you describe assigns value to 'traditional' rent but zero value to 'imputed' rent.
exactly. and what if I live in it during the week and rent it out on the weekends?
Who cares which human ends up consuming the yield from my asset? Either way it's the same asset with a major must-account-for risk and a yield/return which is compensation for that risk.
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Oddball wrote: ↑
Fri Feb 14, 2020 11:35 am
If someone counts their mortgage as a negative bond, where do they count the equity in their home? Using the above numbers with $100k stock, $100k bond, and $100k mortgage on a house worth $200k, where does the $100k in home equity go?
You need to be consistent. If you are including the mortgage in your AA, you should include your home value too (not just the equity since you would then be double counting the mortgage).
I don’t intend to use home equity to buy stocks, so I don’t have mortgage or home value in my AA.
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