Cheap Old Houses - What to do with your dividend

Depends which houses. Your borrowing power is probably more now, but there's also not a huge auction culture in the USA as there is where I live in Australia.

Let's think about it this way. A once $500,000 house suddenly gets a price tag of $650,000 because the owners just want to. Does the house compare to others in the neighbourhood that are priced the same?

In Australia, they announced a first home buyers grant that gave buyers $10,000 to put towards their deposit. What happened? House prices went up. Why? Competition, and not enough stock. This is great if you are a home owner. We just had a MASSIVE boom here in property value over the last 5 years and then it slumped for two years and is on its way back up again. They made it slump on purpose so that first home buyers wouldn't be priced out. Awful houses were selling for $1,000,000, we were getting 140,000 immigrants to our city every year, and there just weren't enough houses. Prices were going up by 10% every year. To save a deposit, you needed $100,000 and wages were not increasing.

So then the government decided they needed to build more homes that were affordable. Yes, the rich will always want the best houses in the best locations, and they'll pay for the privilege of having that. Those prices will most likely go up... though if a house is worth $2m, and you're a couple trying to buy the house with an extra $24k in your pockets per year, how much realistically can that house go up?

What will happen is that more people will be able to buy homes, meaning more land will be zoned for housing, and affordable homes will be built. Once there is a ton of new supply, prices come down. If there's tons of stock on the market to choose from, people can be choosy. They're not going to go for the overpriced house. They're going to look for the bargain, or at least the sensibly priced house. This is what has happened in Melbourne the last 2 years. People stopped buying at auction, started buying at private sales. It was a buyer's market. But the good quality houses that don't need fixing up much always will attract a good price. The solution is:

Buy a house that needs work doing to it. Get it for a steal. Use your UBI or savings to do it up. You will end up having the same kind of house you always wanted for a fraction of the cost if you do it up yourself.

/r/YangForPresidentHQ Thread Parent