Getting a 30 year mortgage is the most attractive part. With a low interest rate, you can essentially short the dollar in real terms but with tax benefits instead of paying capital gains.
Discussion
Yeah, sorry but I don’t agree with this at all. Mortgages are probably the largest wealth transfer mechanism for fleecing the poor and enriching the wealthy ever conceived. They are solely responsible for pricing anyone in socioeconomic class lower than the upper middle class out of housing. If you have enough wealth liquidity to leverage currency arbitrage there are much better financial vehicles than paying banks, and capital gains are usually offset by contrived business losses. Bottom line, the wealthy don’t realistically pay substantial taxes. This premise hinges on constant real estate appreciation which is unsustainable, and assumes that the investor is going to relocate their primary residence to a new growing real estate market every couple of years, perhaps a fine proposition for a single professional investor, but not a strategy for mainstream professional families in my opinion.
I completely agree with you if we believe whatever currency your loan is in will remain relatively strong over the next 30 years.
At this point, I believe it hinges much less on real estate appreciation and much more on ever growing currency debasement. Imagine taking a 30 year 5% fixed rate mortgage on a 1 million USD house in Turkey 7 years ago. That was only 2.7 million lira at the time. With a monthly payment of 15k lira ($5,300 USD 7 years ago), that's currently only $1500 USD. In a few more years time, that will be even less monetary value.
I don't know if you live in a place like turkey but on a long enough timeline, every fiat currency will follow the same trajectory. So the longer the payback period, the more likely you can pay it back with cheaper and cheaper fiat currency units
This is an excellent point, thank you for sharing. The ability to capitalize on the fiat debasement requires a store of higher valuation fiat, best case, in the amount of the loan at the time of acquisition or prior. This is contrary to the typical use case of mortgages. For most people, if they had the necessary funds available, they would simply purchase the house. Earning debased currency concurrent to paying debasing debt gives no distinct fiscal advantage, no?
If you keep your wealth in a debasing currency, your advantage would be how well you can negotiate a raise, raise your prices, or somehow earn on par or better than inflation.
If you store your wealth in a currency like the dollar or better, Bitcoin, then the tide turns even further in your favor.
I did the conversion from Lira to dollars but it would be even more attractive looking at the try/BTC chart