Great (and amusing) recent article in the WSJ, ":How toStop Relatives
From Bragging About Their Big Profits in Real Estate", debunking a
hypothetical guy "Bob" who bought a house for $250k and sold it for
$360k 5 years later.

"Bob" claimed great leverage, $110k profit on his downpmt of $50k.
But taking his $360k and subtracting his borrowing expenses including
closing costs of $57.5k AFTER tax ($86,750 before tax), his $45.5k in
annual expenses (prop tax, insurance, maint & repair, operating
exps.), his $189k loan balance, his $50k down, and his $19k (only 5%!)
commission on the sale - and he is exactly ZERO $ ahead.

But what Bob *DID* get, is a nie place to live. And that's the
answer. It is perfectly OK to by a house to get a nice place to live.
But don't do it to "make money". In this case the appreciation and
debt paydown did indeed offset the costs - but then where is he going
to live now, all those other houses went up, too!

Nothing wrong with buying real estate - I was 22 years old when I
bought my first place. But just enjoy your home, you don't have to
delude yourself on how much money you are making.

-v.