Winnetka in $750K house, bad idea?

[3Series]

Originally Posted by cubssoxfan

so where are these 7% returns?

aapl

[3Series]

Originally Posted by madpaddy

Highlighted the important part. 7% return in the current market environment requires more than a little risk. Does the OP sound like a big risk taker? One willing to leverage their home for a potential ~5% bump in net income? Not to me.

I said it takes risk, it's not risk free, but it's also not a "big" risk or a "little" risk. Unfortunately, defining risk for a person is a personal thing. No one can predict the future however, 7% is a reasonable expectation for the average retail investor.

[Larry Siegel]

Originally Posted by 3Series

I said it takes risk, it's not risk free, but it's also not a "big" risk or a "little" risk. Unfortunately, defining risk for a person is a personal thing. No one can predict the future however, 7% is a reasonable expectation for the average retail investor.

..."risk" meaning that you might get much less than 7%, not that you need to wait a while and it will come.

And those who are quoting the 7% figure are talking about holding a large fraction in stocks. U.S. Treasury bonds yield 2 to 3%, money market funds are essentially at zero.

[3Series]

Originally Posted by Larry Siegel

..."risk" meaning that you might get much less than 7%, not that you need to wait a while and it will come.

And those who are quoting the 7% figure are talking about holding a large fraction in stocks. U.S. Treasury bonds yield 2 to 3%, money market funds are essentially at zero.

Exactly, risk also means you could lose all the principal. 7% was quoted as a realistic example. The OP could knock it out of the park and have a 1yr return of over 100% and wouldn't have to worry anymore. Anyway, this isn't the place to discuss.

My opinions still holds that it's financially savvier to put less down on a house and to be cash rich instead of house rich in this lending environment (assuming solid credit) and real estate market of suburban Chicago.

[Larry Siegel]

Originally Posted by 3Series

Exactly, risk also means you could lose all the principal. 7% was quoted as a realistic example. The OP could knock it out of the park and have a 1yr return of over 100% and wouldn't have to worry anymore. Anyway, this isn't the place to discuss.

My opinions still holds that it's financially savvier to put less down on a house and to be cash rich instead of house rich in this lending environment (assuming solid credit) and real estate market of suburban Chicago.

Agreed.

[ChicagoMeO]

If the OP is worried about that, can anyone tell me what Winnetka home owners feel about apartment rentes. I saw some apartments in Winnetka and wilmette, and now i am thinking that they might look down on renters. What say you about that?

[Larry Siegel]

I can't speak for Winnetkans, but renters in Wilmette are treated like anyone else.