One. It was supposed to be temporary but we’ve been here 24 years. When we retire we’re changing states and doing our second, and hopefully last, home purchase.
I like renting. When something breaks, I call our building’s maintenance people, and they fix it for me. If they can’t fix it, I tell our landlord, and he sends a repair person out without it costing me anything. It’s kinda fabulous.
@Kevin That’s true, but it really depends on when you buy and how long you’re willing/able to hold it. I had my house for 7 years before I sold it for less than I originally paid. We didn’t want to live in that neighborhood anymore and couldn’t rent it for more than mortgage+taxes.
Now I rent in a neighborhood that would cost me over $625K to buy into, and my rent is still less than the mortgage+taxes would be. We may not be earning equity, but we’re MUCH happier here. Just signed our 3rd year of lease.
i think i have signed at a minimum of 20 closings, either buying, selling or re-fi, not braggin’, the neighbors just keep asking us to sell, go figure…
I like renting just fine but I’ve come to realize there’s this period of time between working and death, and I guess if you’re lucky you call that time retirement, but if you’re not so lucky (which is what I’m banking on) it’d probably be good to own a place to wither away in.
We currently rent but in 4 houses we lost money in 3 that we owned for 7 or more years (we made money on the one we were in only 2 years, but lost it as downpayment on the next house that dropped 1/2 its value in '09 and still hadn’t recovered when we had to go). The housing market was not well synced to our need to move states for jobs. We may buy again some day but it won’t be soon, we keep moving so i refuse for now. It may be that house we want on the water when we retire.
@mollama Even if you account for 7 years of rent had you not owned the homes? For example, if a comparable property rents for $1,000 per month, which IME would be pretty low rent for a house, and you live there for 8.3 years, you’ve gotten $100,000 in value out of it already. So if you sell for $100,000 less than you paid, you still have broken even. It’s nice when property acts as an investment and you get out more than you paid. But it seems like people never factor in the fact that if they didn’t own a home they’d have been paying rent somewhere.
My perspective is that my hpuse payment is less than renting a comparable property wpuld be, and at the end of the mortgage I own the house. Even if for some reason I lost the house, all this time I’ve been paying less than I would have for rent, so I’m still ahead. And I don’t have the uncertainty of hoping my lease will be renewed, and I have the freedom to make any changes to the house I want.
I absolutely love renting and can’t imagine ever owning. My place is so nice, and there is virtually nothing to worry about because the landlord takes care of everything. If I had to complain about one thing is that I am not able to sign longer leases.
As some have pointed out from their personal experience, buying isn’t always a better choice than renting.
I don’t remember all of how the rest of the segment went, but in regard to buying a home being smart because it’s an investment, that may or may not work out because you don’t know what will happen to the housing market. The show recommended talking to a financial planner when considering buying a home for the financial picture, not a real estate agent.
@jqubed. For me it was a lifestyle choice. Every year it was getting harder to find a place I could rent with a couple of giant breed dogs. Also, being an artist, I wanted to be able to color and decorate and personalize my living space.
I own and live in the only house I ever bought. I have poured more money into repairs and renovations than the original cost of the property. By the time I sell the house I imagine I will have lost a hefty amount of money on it, but it will sell for a lot more than I bought it for.
My advice to everyone. If you are interested in buying a house because it is a good investment… don’t. If you are interested in buying a house in order to control your living environment and you don’t mind spending a lot of money to make it what you want it to be, then go for it.
Houses may sound like a good investment but if you add up all the costs of maintenance, repairs, and the inevitable renovations it WILL end up costing you much more than you will eventually save unless you are an experienced house flipper and know how to do the bare minimum in order to get the house to sell well without going broke on it.
@infornography so true. I’m renting now, just sold my 2nd house in Jan 2017. I’ve saved more in the last 3 months than I could ever do when I owned those houses.
If you are interested in buying a house because it is a good investment… don’t.
That really depends on the market. Buying the cheapest home in an expensive neighborhood is a good way to go. Or buy a home in the Boston area 5 years ago.
@Kevin That is a matter of being lucky or intending to flip the house. My advice is more on average or targeted toward people who are not intending to actively work the real estate market. Your average home buyer will NOT come out ahead. Ever.
@infornography This doesn’t make sense to me. Landlords aren’t charitable organizations, they are going to recoup all the property expenses in rent. I’ve been aggravated many times hearing people who rent voting in favor of property tax increases because they think they don’t pay property tax - do they really believe the property owner isn’t going to pass that cost on to them?
My house is valued at about 3x what I paid for it, double what I paid plus remodeling expense.
If you become house poor, then you need to be lucky and or flip the house. If you buy a home within your means, you won’t lose. Land never loses value.
@Kevin Not true that land never loses value - the land around two sides of my property has lost value for years. When I first bought my place, I offered to buy it, but they refused. The son now owns it and keeps nearly losing it, but it keeps losing value because it’s not high demand farm ground. Now it’s not even farmed, and it floods so it can’t serve much for homes, so it’s worthless for anything except recreation.
@moondrake Also, the idea that the handyman is free doesn’t make sense – the cost of rent pays for that.
That reminds me of the last time I bought a car. They wanted to charge $300 for key insurance – if I ever lost the key (within 5 years) they’d replace it for free. Besides that I’ve never lost a car key, they gave me two keys with the car.
@Kevin I did lose one of my car keys, but the replacement cost is about $275, so the insurance would have been a bad deal. I still haven’t bought a replacement, I still have one full key and the valet key.
Land loses value all the time. Just the general trend is upwards.
As I stated in my original post though, I expect to sell the house for much more than I bought it for, but the cost of everything I have done to it is far more than that ostensible profit.
Apartments get ahead based on a few things.
They generally don’t do expensive renovations and they cut corners where they can. Because apartment complexes frequently change hands the current owners are not as concerned with long term issues getting kicked down the line to the next owner.
They have dedicated staff for maintenance who are FAR cheaper than contractors. They can do this because they have a really good economy of scale. Your basic homeowner cannot afford to hire a staff of handymen to address everything that comes up for them, but the apartment can afford to keep such a staff and pay them $10 to $20 an hour to address issues as they arise.
Density. They pack a lot more people in a smaller amount of land than houses do. This consolidates expenses to a high degree.
Meanwhile your typical long term homeowner will go for high quality over speed and cost fairly often. This is generally a good idea for long term investment but not as much for quick turn around.
@infornography Timing and location (and location, and location, and location) are key factors in whether one would make or break at resale.
Where my sister lives, the pricing has surpassed its (artificial) peak in 2006; where my parents live, it has way surpassed. My area is nearing; it’s “only” $250k higher than when I bought 8 years ago.
@narfcake Did you know it would do that ahead of time? If so you went into it with far more information than most home buyers. If not, then you can’t count on that sort of thing because it is not the national average.
@infornography Obviously varies by situation. My wife and I sold our first houses (each purchased before we were together) and netted enough equity plus appreciation to build our current house for cash. Nineteen years and counting with no mortgage - it’s a nice feeling.
@infornography During the boom, I was working part time as an “auditor” for a mortgage company, so I had first hand experience seeing the market as being unsustainable, which also prepped me in “making the move” when the trend was back towards the normalized curve.
FWIW, I put auditor in quotation marks as that was my given title for “checking that the paperwork is in order for the loan package and that figures were included (or excluded) on the proper forms.” Some of the stuff that passed through was a ludicrous lie (versus just a small lie), but it was “underwriting’s job” to do the actual verification … which in many cases, was really a non-verification.
It was pretty fucked up. I left before the ugliest of it came, as my other job became full time again.
@Kevin True. I would love to use it - which is why I offered to purchase it. But since it isn’t being used, it lost value. Which might turn out good for me in the long run - maybe when they do finally sell it, it’ll cost less for me.
@MrMark If you have the ability to pay a little more every month, do it. The majority of the loan payment right now is interest; paying down the principle when it’s early has a compounding effect.
@narfcake I’ve considered it, but with the rate being so low, it just doesn’t feel right for me. Yes the guaranteed long-term savings is nice, however I’ve been funneling the extra into either 401K or my brokerage account. What’s life without a little whimsy and unknown thrown in.
@IWUJackson You’re paying those regardless if you rent or own, the difference is if it’s separate item you pay or just part of rent.
But yes, there will always be some form of payment owed.
@MrMark once the house is paid off I’m still going to havev $250-300 monthly cost for insurance and taxes. Our property taxes here are absurd. In a few years I’ll be old enough to be exempted from paying all the school taxes and that will help.
@IWUJackson Actually your property taxes buy streets and parks, police and firemen, schools and hospitals. While no one enjoys paying property taxes, most of us really enjoy having those things.
@IWUJackson Eventually. And if you don’t pay your income tax, they’ll take your you away. The only things in life that are mandatory are death and taxes. But it takes some of the sting out when you recognize your taxes’ role in the things you enjoy.
I answered the poll with a response of 1…but there’s a story. I moved to Moorhead, MN in 1990 to attend college. I bought my first “home”, a mobile home, instead of renting for the grand sum of $2000. It sufficed, but was old, small, and not energy efficient to say the least. It was in a rough part of town, in the 18 months I lived there, there were 3 murders within 100 feet of my home. The night of the 3rd was the straw that broke the camel’s back. Some A-hole broke into my 1974 Plymouth Duster and stole $25 speakers. Cost me $150 for a new window, but that didn’t make any difference to that Jack-Wad! A little over a month later, I purchased a 10 year newer mobile home, which most importantly was in a much better neighborhood. I was in HEAVEN! About 5 years later, I started dating a girl who would eventually become my wife. For her, and her family, it was the ultimate insult that I would “make” her live in a mobile home, nice as it was. So for the next 10 years, we did NOTHING. No vacations, no going out to eat, just NOTHING. We saved every penny we could save, and purchased some land in South Fargo (North Dakota). A year later, we picked a contractor who would work with us to design a home that we could specify all the details we’d like, but also would let us do some of the work ourselves to save a few bucks. About 3 years ago, we moved in to our new home, and THIS is what I call my #1 home purchase.
Bought this house in 86. Paid it off in the mid nineties. Hubby wanted to buy property. Took out an equity line of credit. We’ll be paying that off until we die.
@lisaviolet Yeah, that’s likely to take a while to appreciate in value. That’s how my immortal role-playing characters amass their fortunes, they buy vacant land at the edge of major cities and hold onto it through trusts for a couple of decades or centuries till the cities grow past it to sell.
And the powers that be in San Diego are trying to keep everyone west, to not expand east.
I’d love to get rid of it, but I never bring that up because I know he really loves to go up there every once in a while. He used to go every weekend, then every other weekend, then once a month, then he just quit going. That’s when the price of fuel was skyrocketing and it was costing fifty bucks in fuel alone to go up there. And his work had fallen off (construction) and there was no way to justify a $200 a month fuel bill so he could go play in the dirt with his tractor.
@narfcake When I first bought this house 30 years ago, the mortgage payment was 25% less than I’d been paying in rent. Since then I’ve refinanced twice, once to pay off credit card debt and once to add a huge deck and screen room, which tripled my mortgage payment in order to stay on track with the original payoff date (it’s going to take 31 years instead of 30) but my mortgage is still cheaper than monthly rental for a house.
I live in the only home I’ve ever owned. Even following the housing market crash, it’s easily worth 6 times its original purchase price. My home has put my two sons and me through college and graduate school a total of 9 times. My monthly mortgage payment has continually decreased over the years - from $1295 monthly, when I first bought it, to $525 now.
I gladly pay the taxes and upkeep on it; much of those expenditures are tax deductible; it’s infinitely cheaper than renting; and I have over $500,000 in equity. My mortgage payment is less than 1/5 the cost of comparable rents.
Owning a home allows me access to lower interest rates, should I desire any type of bank loan, and allows me to have most anything I desire. I get to make changes to my home whenever I choose, without the need for anyone else’s permission. It’s a freedom I highly value.
Whomever says “renting is better” is simply delusional.
@bljteach I only see renting as good if you have a very mobile life, so you’ll be moving every couple of years. Also some people like apartment living because they don’t want a yard and they like the shared facilities such as the pool and community room. I lived in apartments when I first moved out and couldn’t stand it. I was renting houses before I was 20. But I could never get more than a 1 year lease and there was always some reason I wasn’t renewed and it was harder every time to find a place that would allow my dogs. I can’t imagine a better use of my money than securing a place to call my own, to make my own, to live the life I choose.
@moondrake We are a military family; talk about “mobile”! When we move (frequently), we rent the home through military facilities. Rents are more than adequate to cover mortgage, property management fees, and taxes. As fot the “big yard” issue, my home is located on the Monterey Bay, in central California, where only the mega-rich have large yards.
@bljteach While I’m in agreement that overall if you plan to be in a place long term buying almost always outperforms renting.
You must realize your results are not typical. You stated you bought for 100k. With a 1295 monthly payment, that puts an interest rate of around 15%. Which means you must of bought in 1981, possibly 82.
Since 1981, the typical house has risen in cost 3x. So a 6x far outperforms what the average person would see. Your area must of seen a far greater increase in property values than most.
@MrMark You can try to diminish it all you want, but the fact remains that I’m far ahead of where I’d be, had I chosen to rent, rather than buy. I bought my home at a 12.5% interest rate, and eventually refinanced my mortgage down to 3.5%.
As a military family, we were much more mobile than most, but having a home to rent out helped us financially. It gave us tax breaks for 30+ years, whether or not we were living in it.
This area has suffered extreme housing market dips, both after President Clinton’s massive military base closures, AND during the 2006 housing market crash. We’ve definitely suffered more than most homeowners. And, yes, we also now enjoy higher property values than other areas of the country. That’s par for the course in coastal California.
My current $525 mortgage payment would now be about $2,700, were I renting. I am NEVER subject to rent hike whims. Any way you look at it, owning has proven infinitely more advantageous than renting ever could.
@bljteach I’m in agreement with you. I’m a home owner because it does benefit me and I expect it to continue to be one. But to make it sound like this is standard results is not accurate.
Most homes will not appreciate 6x in value.
There are plenty of situations where renting would be the more financial savvy choice. To imply renting couldn’t possibly be better is wrong.
@moondrake I don’t understand what it was about the “big yard” reference that you found objectionable. My reply was that everyone here, except for the mega-rich, has a small yard. Yard upkeep, therefore, is definitely not an issue.
@MrMark Please show me exactly WHERE, in any of my posts, I state that my home ownership experience is “standard”. I simply posted my own experience, and compared it to where I’d be (in the coastal California housing market), had I chosen to rent, instead. I applied my housing experience to no one other than myself, although I wholeheartedly believe that anyone will fare far better (in any but the most severely depressed housing markets) by choosing to buy “wisely”, rather than rent.
Admittedly, I live in an extremely high-cost area. By biting the bullet and maxing out my ability to buy here, I’ve reaped great benefits that have served my family and me exceedingly well for many years. Even if my home had only increased in value by the 3X national average, I’d still be far better off than if I’d been renting. Overall, buying a home yields benefits that simply cannot be acquired by renting. That’s my main point, and I’m sticking to it.
@MrMark From MY standpoint & experience, buying is well worth the future benefits. You can grasp at straws and misinterpret my posts all you like, but the fact remains that I’m sitting pretty with a meager mortgage payment and sh**loads of equity I wouldn’t have, had I chosen to rent.
OK, I understand that this fact infuriates some, who lack my financial acumen and subsequent good fortune. Those who work hard, and then do well, always have haters. All I can say to that is, “Get over it.” I chose well and made a prudent home purchase, instead of renting. It worked out fabulously for me, and I encourage others to do the same.
@bljteach I’m not sure where your anger comes from. Where did I diminish your results, or say it wasn’t great? All I said is it wasn’t standard. Which is a fact, you admitted as much. We are essentially in an agreement, but yet you seem mad about that.
I’m not sure what “haters” you are referring too, or even who stated “renting is better” to begin with.
@bljteach Obviously people have strong opinions on this one, but as someone who rented for 19 years, home ownership was never in the cards. The longest I lived in any one spot was three years.
In that instance, renting was definitely better.
As a newly minted homeowner, I will also say that I would gladly pay the delta between my current mortgage and my previous rent to have someone just take care of all the shit that I’m now responsible for. (That has nothing to do with the value proposition of owning a home, just a personal observation).
@hanzov69 <evil laugh> Welcome to homeowner hell! Your favorite store is now Lowe’s, You will learn how to regrout by watching YouTube. You will buy a tool chest, a drill, and a set of screwdrivers right after you desperately need them. You will learn all about toilet guts, and why a more costly flapper isn’t necessarily better. Oh, the places you’ll go!
@hanzov69 Sorry to hear that. I would only wish for everyone’s experience to be as positive as mine. It hasn’t always been easy, of course, but for me owning a home been extremely worthwhile.
I thoroughly agree that home ownership teaches a lot about home repair. I’ve acquired every tool one could possibly need, and learned how to use them all. I can do plumbing, minor electrical, tile, hardwood, carpet laying, and even stone laying - not because I wanted to, but because I had to. Home ownership required adding a plethora of skills to my skill set, and that’s a GOOD thing. I’m grateful for, and proud of, what I can now do. It’s all good.
@MrMark I don’t allow anyone else to control my emotions, so anger is certainly not an issue here. I do find it a tad annoying that your hater instinct kicked in so strongly that you went to such extensive lengths to try to (1) figure out what year I bought my house; (2) try to calculate my purchase interest rate; (3) try to calculate my current interest rate (all of which were wrong); and (4) work so repeatedly hard to minimize the value of my 600% property value increase. That’s exactly what haters do. Those actions are only to be pitied.
If rent increases; always paying someone else’s mortgage; and not reaping the many benefits of owning your own home don’t appeal to you then, by all means, “rent”. Your constant attempts to tear down those of us who have positive home ownership experiences is just plain sad.
@MrMark Trolls are haters; they’re folks who peruse the Web, searching for people who have accomplished what they haven’t, and then “hate” on others’ hard work and well-earned accomplishments. Clearly, “troll” describes you sir - not I.
OK, I understand that this fact infuriates some, who lack my financial acumen and subsequent good fortune. Those who work hard, and then do well, always have haters. All I can say to that is, “Get over it.”
No commentary on the virtues on home-ownship vs otherwise.
This is the fourth, and I didn’t intend to buy it. However, I was offered a job here, with higher pay, in a state with no income tax, and they threw in moving expenses and closing costs on my houses both there and here. So I bought a house.
Two. Bought my first when I was 21; I was a enlisted reservist and got called up for OIF – having a $40k drop in pay forced me to sell it, which was probably for the best anyway. Bought my second one 12 years later, been living here for four years, I like the house but I can’t wait to move to another part of the country and I’m not opposed to renting…each has its advantages and disadvantages.
One. It was supposed to be temporary but we’ve been here 24 years. When we retire we’re changing states and doing our second, and hopefully last, home purchase.
I like renting. When something breaks, I call our building’s maintenance people, and they fix it for me. If they can’t fix it, I tell our landlord, and he sends a repair person out without it costing me anything. It’s kinda fabulous.
@Jamileigh17 and it’s cheaper than owning a home if you find one that includes water, electricity, trash included.
@Aznatural1 Owning a home is also an investment. It’s immediately cheaper, but you don’t build any equity.
@Kevin That’s true, but it really depends on when you buy and how long you’re willing/able to hold it. I had my house for 7 years before I sold it for less than I originally paid. We didn’t want to live in that neighborhood anymore and couldn’t rent it for more than mortgage+taxes.
Now I rent in a neighborhood that would cost me over $625K to buy into, and my rent is still less than the mortgage+taxes would be. We may not be earning equity, but we’re MUCH happier here. Just signed our 3rd year of lease.
i think i have signed at a minimum of 20 closings, either buying, selling or re-fi, not braggin’, the neighbors just keep asking us to sell, go figure…
/youtube feeling unwanted
@Yoda_Daenerys My neighbor’s a real estate agent. He keeps sending me post cards about selling my house. I’m not sure if I should take it personally.
@jqubed If all of your neighbors sign the post card, you may have to worry.
Do mobile homes count?
/giphy buy a mobile home
@2many2no Absolutely
I like renting just fine but I’ve come to realize there’s this period of time between working and death, and I guess if you’re lucky you call that time retirement, but if you’re not so lucky (which is what I’m banking on) it’d probably be good to own a place to wither away in.
@brhfl some advise, not that you are asking
buy low, sell high
i just came across the picture you made of your camping trip - ring any bells?
We currently rent but in 4 houses we lost money in 3 that we owned for 7 or more years (we made money on the one we were in only 2 years, but lost it as downpayment on the next house that dropped 1/2 its value in '09 and still hadn’t recovered when we had to go). The housing market was not well synced to our need to move states for jobs. We may buy again some day but it won’t be soon, we keep moving so i refuse for now. It may be that house we want on the water when we retire.
@mollama Ouch, what area hasn’t come back from the 09 housing crash?
@tightwad none
@mollama Even if you account for 7 years of rent had you not owned the homes? For example, if a comparable property rents for $1,000 per month, which IME would be pretty low rent for a house, and you live there for 8.3 years, you’ve gotten $100,000 in value out of it already. So if you sell for $100,000 less than you paid, you still have broken even. It’s nice when property acts as an investment and you get out more than you paid. But it seems like people never factor in the fact that if they didn’t own a home they’d have been paying rent somewhere.
My perspective is that my hpuse payment is less than renting a comparable property wpuld be, and at the end of the mortgage I own the house. Even if for some reason I lost the house, all this time I’ve been paying less than I would have for rent, so I’m still ahead. And I don’t have the uncertainty of hoping my lease will be renewed, and I have the freedom to make any changes to the house I want.
I absolutely love renting and can’t imagine ever owning. My place is so nice, and there is virtually nothing to worry about because the landlord takes care of everything. If I had to complain about one thing is that I am not able to sign longer leases.
As some have pointed out from their personal experience, buying isn’t always a better choice than renting.
I don’t remember all of how the rest of the segment went, but in regard to buying a home being smart because it’s an investment, that may or may not work out because you don’t know what will happen to the housing market. The show recommended talking to a financial planner when considering buying a home for the financial picture, not a real estate agent.
@jqubed. For me it was a lifestyle choice. Every year it was getting harder to find a place I could rent with a couple of giant breed dogs. Also, being an artist, I wanted to be able to color and decorate and personalize my living space.
I still own a home I don’t live in and live in a home I don’t own. :-\
I own and live in the only house I ever bought. I have poured more money into repairs and renovations than the original cost of the property. By the time I sell the house I imagine I will have lost a hefty amount of money on it, but it will sell for a lot more than I bought it for.
My advice to everyone. If you are interested in buying a house because it is a good investment… don’t. If you are interested in buying a house in order to control your living environment and you don’t mind spending a lot of money to make it what you want it to be, then go for it.
Houses may sound like a good investment but if you add up all the costs of maintenance, repairs, and the inevitable renovations it WILL end up costing you much more than you will eventually save unless you are an experienced house flipper and know how to do the bare minimum in order to get the house to sell well without going broke on it.
@infornography so true. I’m renting now, just sold my 2nd house in Jan 2017. I’ve saved more in the last 3 months than I could ever do when I owned those houses.
@infornography
That really depends on the market. Buying the cheapest home in an expensive neighborhood is a good way to go. Or buy a home in the Boston area 5 years ago.
@Kevin That is a matter of being lucky or intending to flip the house. My advice is more on average or targeted toward people who are not intending to actively work the real estate market. Your average home buyer will NOT come out ahead. Ever.
@infornography https://www.census.gov/hhes/www/housing/census/historic/values.html the census seems to contradict your assessment
@infornography This doesn’t make sense to me. Landlords aren’t charitable organizations, they are going to recoup all the property expenses in rent. I’ve been aggravated many times hearing people who rent voting in favor of property tax increases because they think they don’t pay property tax - do they really believe the property owner isn’t going to pass that cost on to them?
My house is valued at about 3x what I paid for it, double what I paid plus remodeling expense.
@infornography They won’t ever come out ahead?
If you become house poor, then you need to be lucky and or flip the house. If you buy a home within your means, you won’t lose. Land never loses value.
@Kevin Not true that land never loses value - the land around two sides of my property has lost value for years. When I first bought my place, I offered to buy it, but they refused. The son now owns it and keeps nearly losing it, but it keeps losing value because it’s not high demand farm ground. Now it’s not even farmed, and it floods so it can’t serve much for homes, so it’s worthless for anything except recreation.
@moondrake Also, the idea that the handyman is free doesn’t make sense – the cost of rent pays for that.
That reminds me of the last time I bought a car. They wanted to charge $300 for key insurance – if I ever lost the key (within 5 years) they’d replace it for free. Besides that I’ve never lost a car key, they gave me two keys with the car.
@IWUJackson Land has an unlimited useful life. You just haven’t been able to make the land useful.
@Kevin I did lose one of my car keys, but the replacement cost is about $275, so the insurance would have been a bad deal. I still haven’t bought a replacement, I still have one full key and the valet key.
Land loses value all the time. Just the general trend is upwards.
As I stated in my original post though, I expect to sell the house for much more than I bought it for, but the cost of everything I have done to it is far more than that ostensible profit.
Apartments get ahead based on a few things.
Meanwhile your typical long term homeowner will go for high quality over speed and cost fairly often. This is generally a good idea for long term investment but not as much for quick turn around.
@infornography Timing and location (and location, and location, and location) are key factors in whether one would make or break at resale.
Where my sister lives, the pricing has surpassed its (artificial) peak in 2006; where my parents live, it has way surpassed. My area is nearing; it’s “only” $250k higher than when I bought 8 years ago.
@narfcake Did you know it would do that ahead of time? If so you went into it with far more information than most home buyers. If not, then you can’t count on that sort of thing because it is not the national average.
@infornography Obviously varies by situation. My wife and I sold our first houses (each purchased before we were together) and netted enough equity plus appreciation to build our current house for cash. Nineteen years and counting with no mortgage - it’s a nice feeling.
@infornography well, by renting you can guarantee you won’t make any money.
@macromeh What the hell, my wife came with debt.
@infornography During the boom, I was working part time as an “auditor” for a mortgage company, so I had first hand experience seeing the market as being unsustainable, which also prepped me in “making the move” when the trend was back towards the normalized curve.
FWIW, I put auditor in quotation marks as that was my given title for “checking that the paperwork is in order for the loan package and that figures were included (or excluded) on the proper forms.” Some of the stuff that passed through was a ludicrous lie (versus just a small lie), but it was “underwriting’s job” to do the actual verification … which in many cases, was really a non-verification.
It was pretty fucked up. I left before the ugliest of it came, as my other job became full time again.
@Kevin True. I would love to use it - which is why I offered to purchase it. But since it isn’t being used, it lost value. Which might turn out good for me in the long run - maybe when they do finally sell it, it’ll cost less for me.
For some reading material of the shit that happened, here’s a three-part series:
How Speculative Madness Changed the Housing Market
Terms of Endearment: How the Speculative Madness Was Financed
How Widespread Mortgage Fraud Toppled the U.S. Housing Market
only 338 more months and I will have finally purchased my home.
@MrMark If you have the ability to pay a little more every month, do it. The majority of the loan payment right now is interest; paying down the principle when it’s early has a compounding effect.
@MrMark I’m not too smart either…I signed a 30 year mortgage at 45 years old. What’s that say about ability to enjoy retirement?
@narfcake I’ve considered it, but with the rate being so low, it just doesn’t feel right for me. Yes the guaranteed long-term savings is nice, however I’ve been funneling the extra into either 401K or my brokerage account. What’s life without a little whimsy and unknown thrown in.
@MrMark I’ve got a little over a year left on mine. Yippee!
@MrMark If you live in a state that has property tax - you’ll be buying your home for life.
@IWUJackson You’re paying those regardless if you rent or own, the difference is if it’s separate item you pay or just part of rent.
But yes, there will always be some form of payment owed.
@MrMark once the house is paid off I’m still going to havev $250-300 monthly cost for insurance and taxes. Our property taxes here are absurd. In a few years I’ll be old enough to be exempted from paying all the school taxes and that will help.
@IWUJackson Actually your property taxes buy streets and parks, police and firemen, schools and hospitals. While no one enjoys paying property taxes, most of us really enjoy having those things.
@moondrake True, but it doesn’t change the fact that if you don’t pay, they’ll take your house away.
@IWUJackson Eventually. And if you don’t pay your income tax, they’ll take your you away. The only things in life that are mandatory are death and taxes. But it takes some of the sting out when you recognize your taxes’ role in the things you enjoy.
@narfcake yup. We paid off our 30yr loan in 16yrs. Had $850. Pymts, we always paid $1000, even when it was tough at the beginning…
I answered the poll with a response of 1…but there’s a story. I moved to Moorhead, MN in 1990 to attend college. I bought my first “home”, a mobile home, instead of renting for the grand sum of $2000. It sufficed, but was old, small, and not energy efficient to say the least. It was in a rough part of town, in the 18 months I lived there, there were 3 murders within 100 feet of my home. The night of the 3rd was the straw that broke the camel’s back. Some A-hole broke into my 1974 Plymouth Duster and stole $25 speakers. Cost me $150 for a new window, but that didn’t make any difference to that Jack-Wad! A little over a month later, I purchased a 10 year newer mobile home, which most importantly was in a much better neighborhood. I was in HEAVEN! About 5 years later, I started dating a girl who would eventually become my wife. For her, and her family, it was the ultimate insult that I would “make” her live in a mobile home, nice as it was. So for the next 10 years, we did NOTHING. No vacations, no going out to eat, just NOTHING. We saved every penny we could save, and purchased some land in South Fargo (North Dakota). A year later, we picked a contractor who would work with us to design a home that we could specify all the details we’d like, but also would let us do some of the work ourselves to save a few bucks. About 3 years ago, we moved in to our new home, and THIS is what I call my #1 home purchase.
Bought this house in 86. Paid it off in the mid nineties. Hubby wanted to buy property. Took out an equity line of credit. We’ll be paying that off until we die.
Meanwhile, 80 acres of property goes unused…
le sigh…
@lisaviolet You could have horsies!
@moondrake It’s an hour and a half drive up there. Just high desert.
(And horsies scare the bejeebers out of me…childhood trauma…not the horse, the horsefly.)
@lisaviolet Yeah, that’s likely to take a while to appreciate in value. That’s how my immortal role-playing characters amass their fortunes, they buy vacant land at the edge of major cities and hold onto it through trusts for a couple of decades or centuries till the cities grow past it to sell.
@moondrake We don’t have any kids.
And the powers that be in San Diego are trying to keep everyone west, to not expand east.
I’d love to get rid of it, but I never bring that up because I know he really loves to go up there every once in a while. He used to go every weekend, then every other weekend, then once a month, then he just quit going. That’s when the price of fuel was skyrocketing and it was costing fifty bucks in fuel alone to go up there. And his work had fallen off (construction) and there was no way to justify a $200 a month fuel bill so he could go play in the dirt with his tractor.
In a few hours, i’ll be closing on house 2 today. Hopefully the next house will be for vacations only.
I bought in 2009 because income has not increased proportionally with the cost of living. Back then, renting was cheaper.
8 years later, I’m paying less on my PITI than what rent goes for in my area.
Buying has locked in my housing costs; I’m not at the mercy of supply and demand.
@narfcake When I first bought this house 30 years ago, the mortgage payment was 25% less than I’d been paying in rent. Since then I’ve refinanced twice, once to pay off credit card debt and once to add a huge deck and screen room, which tripled my mortgage payment in order to stay on track with the original payoff date (it’s going to take 31 years instead of 30) but my mortgage is still cheaper than monthly rental for a house.
@moondrake (OT: Thank you so much for using perfect grammar. My local TV station news crawl gives me headaches.)
I live in the only home I’ve ever owned. Even following the housing market crash, it’s easily worth 6 times its original purchase price. My home has put my two sons and me through college and graduate school a total of 9 times. My monthly mortgage payment has continually decreased over the years - from $1295 monthly, when I first bought it, to $525 now.
I gladly pay the taxes and upkeep on it; much of those expenditures are tax deductible; it’s infinitely cheaper than renting; and I have over $500,000 in equity. My mortgage payment is less than 1/5 the cost of comparable rents.
Owning a home allows me access to lower interest rates, should I desire any type of bank loan, and allows me to have most anything I desire. I get to make changes to my home whenever I choose, without the need for anyone else’s permission. It’s a freedom I highly value.
Whomever says “renting is better” is simply delusional.
@bljteach I only see renting as good if you have a very mobile life, so you’ll be moving every couple of years. Also some people like apartment living because they don’t want a yard and they like the shared facilities such as the pool and community room. I lived in apartments when I first moved out and couldn’t stand it. I was renting houses before I was 20. But I could never get more than a 1 year lease and there was always some reason I wasn’t renewed and it was harder every time to find a place that would allow my dogs. I can’t imagine a better use of my money than securing a place to call my own, to make my own, to live the life I choose.
@moondrake We are a military family; talk about “mobile”! When we move (frequently), we rent the home through military facilities. Rents are more than adequate to cover mortgage, property management fees, and taxes. As fot the “big yard” issue, my home is located on the Monterey Bay, in central California, where only the mega-rich have large yards.
@bljteach While I’m in agreement that overall if you plan to be in a place long term buying almost always outperforms renting.
You must realize your results are not typical. You stated you bought for 100k. With a 1295 monthly payment, that puts an interest rate of around 15%. Which means you must of bought in 1981, possibly 82.
Since 1981, the typical house has risen in cost 3x. So a 6x far outperforms what the average person would see. Your area must of seen a far greater increase in property values than most.
@bljteach My yard is tiny. But it’s MY yard. My house is tiny and old. But it’s MY house.
@moondrake I THINK you meant to send your reply to Mr.Mark - not me. I’m in complete agreement with YOU.
@MrMark You can try to diminish it all you want, but the fact remains that I’m far ahead of where I’d be, had I chosen to rent, rather than buy. I bought my home at a 12.5% interest rate, and eventually refinanced my mortgage down to 3.5%.
As a military family, we were much more mobile than most, but having a home to rent out helped us financially. It gave us tax breaks for 30+ years, whether or not we were living in it.
This area has suffered extreme housing market dips, both after President Clinton’s massive military base closures, AND during the 2006 housing market crash. We’ve definitely suffered more than most homeowners. And, yes, we also now enjoy higher property values than other areas of the country. That’s par for the course in coastal California.
My current $525 mortgage payment would now be about $2,700, were I renting. I am NEVER subject to rent hike whims. Any way you look at it, owning has proven infinitely more advantageous than renting ever could.
@bljteach It was regarding “big yard”. Although it wouldn’t be the first time I replied to the wrong post.
@bljteach I’m in agreement with you. I’m a home owner because it does benefit me and I expect it to continue to be one. But to make it sound like this is standard results is not accurate.
Most homes will not appreciate 6x in value.
There are plenty of situations where renting would be the more financial savvy choice. To imply renting couldn’t possibly be better is wrong.
@moondrake I don’t understand what it was about the “big yard” reference that you found objectionable. My reply was that everyone here, except for the mega-rich, has a small yard. Yard upkeep, therefore, is definitely not an issue.
@MrMark Please show me exactly WHERE, in any of my posts, I state that my home ownership experience is “standard”. I simply posted my own experience, and compared it to where I’d be (in the coastal California housing market), had I chosen to rent, instead. I applied my housing experience to no one other than myself, although I wholeheartedly believe that anyone will fare far better (in any but the most severely depressed housing markets) by choosing to buy “wisely”, rather than rent.
Admittedly, I live in an extremely high-cost area. By biting the bullet and maxing out my ability to buy here, I’ve reaped great benefits that have served my family and me exceedingly well for many years. Even if my home had only increased in value by the 3X national average, I’d still be far better off than if I’d been renting. Overall, buying a home yields benefits that simply cannot be acquired by renting. That’s my main point, and I’m sticking to it.
@bljteach I wasn’t objecting. Just celebrating having one.
@bljteach In the area I need to be in, it’s nearly impossible to buy a small space. Renting means not consuming more area than necessary, aka a win.
@bljteach by stating whomever said renting is better is delusional came across as more than “in my sutuation”.
@MrMark From MY standpoint & experience, buying is well worth the future benefits. You can grasp at straws and misinterpret my posts all you like, but the fact remains that I’m sitting pretty with a meager mortgage payment and sh**loads of equity I wouldn’t have, had I chosen to rent.
OK, I understand that this fact infuriates some, who lack my financial acumen and subsequent good fortune. Those who work hard, and then do well, always have haters. All I can say to that is, “Get over it.” I chose well and made a prudent home purchase, instead of renting. It worked out fabulously for me, and I encourage others to do the same.
@bljteach I’m not sure where your anger comes from. Where did I diminish your results, or say it wasn’t great? All I said is it wasn’t standard. Which is a fact, you admitted as much. We are essentially in an agreement, but yet you seem mad about that.
I’m not sure what “haters” you are referring too, or even who stated “renting is better” to begin with.
@bljteach Obviously people have strong opinions on this one, but as someone who rented for 19 years, home ownership was never in the cards. The longest I lived in any one spot was three years.
In that instance, renting was definitely better.
As a newly minted homeowner, I will also say that I would gladly pay the delta between my current mortgage and my previous rent to have someone just take care of all the shit that I’m now responsible for. (That has nothing to do with the value proposition of owning a home, just a personal observation).
@hanzov69 <evil laugh> Welcome to homeowner hell! Your favorite store is now Lowe’s, You will learn how to regrout by watching YouTube. You will buy a tool chest, a drill, and a set of screwdrivers right after you desperately need them. You will learn all about toilet guts, and why a more costly flapper isn’t necessarily better. Oh, the places you’ll go!
@MrMark He’s trolling everyone. Stop feeding.
@OldCatLady ALL OF THIS IS TRUE!
I absolutely now have a Lowes card. While I owned tools (and storage), I now own MORE.
I’ve even bought/replaced toilet flappers. So much truth.
@hanzov69 Sorry to hear that. I would only wish for everyone’s experience to be as positive as mine. It hasn’t always been easy, of course, but for me owning a home been extremely worthwhile.
I thoroughly agree that home ownership teaches a lot about home repair. I’ve acquired every tool one could possibly need, and learned how to use them all. I can do plumbing, minor electrical, tile, hardwood, carpet laying, and even stone laying - not because I wanted to, but because I had to. Home ownership required adding a plethora of skills to my skill set, and that’s a GOOD thing. I’m grateful for, and proud of, what I can now do. It’s all good.
@hanzov69 That’s never been an issue for me. Some of us enjoy taking care of those things.
@MrMark I don’t allow anyone else to control my emotions, so anger is certainly not an issue here. I do find it a tad annoying that your hater instinct kicked in so strongly that you went to such extensive lengths to try to (1) figure out what year I bought my house; (2) try to calculate my purchase interest rate; (3) try to calculate my current interest rate (all of which were wrong); and (4) work so repeatedly hard to minimize the value of my 600% property value increase. That’s exactly what haters do. Those actions are only to be pitied.
If rent increases; always paying someone else’s mortgage; and not reaping the many benefits of owning your own home don’t appeal to you then, by all means, “rent”. Your constant attempts to tear down those of us who have positive home ownership experiences is just plain sad.
@bljteach I see the troll in you now. Good day sir.
@MrMark Trolls are haters; they’re folks who peruse the Web, searching for people who have accomplished what they haven’t, and then “hate” on others’ hard work and well-earned accomplishments. Clearly, “troll” describes you sir - not I.
@bljteach said:
No commentary on the virtues on home-ownship vs otherwise.
But I promise to Get Over Something Or Other.
You have my word.
AND I own the place I live in. I’m NOT paying someone ELSE’S mortgage.
This is the fourth, and I didn’t intend to buy it. However, I was offered a job here, with higher pay, in a state with no income tax, and they threw in moving expenses and closing costs on my houses both there and here. So I bought a house.
@OldCatLady
Good bennies in that job.
Three. I’m done.
@Barney Me too. 3. I’m not moving again.
Bought a “starter” house in '71. Still here, but at least we don’t have to downsize.
@pooflady Give yourself more credit. There’s much to be said for having a ridiculously low mortgage payment …or none at all. Congrats!
@bljteach Oh, yeah. Bought it for 29,5 with 20% down and 7% interest, 25 year mortgage. Now valued at 170k
One.
Which I currently feel is one too many. I miss having a landlord who just dealt with all the shit.
@hanzov69 There are pros and cons to each, that’s for certain.
@narfcake Truth. This, for example:
@hanzov69 Which I suppose I could have done in really any apartment, but who wants to deal with packing/moving all those balls.
Two. Bought my first when I was 21; I was a enlisted reservist and got called up for OIF – having a $40k drop in pay forced me to sell it, which was probably for the best anyway. Bought my second one 12 years later, been living here for four years, I like the house but I can’t wait to move to another part of the country and I’m not opposed to renting…each has its advantages and disadvantages.