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re: Does homeownership make sense if you're single?
Posted on 7/17/15 at 10:52 am to LSUAfro
Posted on 7/17/15 at 10:52 am to LSUAfro
I just doubt I could find a house I really would want to own. I like living in downtown New Orleans, but eventually want a larger home Uptown.
Am I being fiscally irresponsible if I have over $70k saved, in stocks, but plan on renting down here for the next 3-5 years?
Am I being fiscally irresponsible if I have over $70k saved, in stocks, but plan on renting down here for the next 3-5 years?
1
Posted on 7/17/15 at 10:56 am to TejasHorn
How old is this person you are debating? I've found that trying to have that discussion with anyone over 45 is useless. These are people who bought their first homes in a very different time, place, and market than today.
As to the rest of your post/thread... the big thing about single homeownership is that, if the market cools down (which it will at some point, it always does) it's going to be harder to sell. And if you are young and single, what if you need to move for work? What if you get married and the size and location of the house you want changes? What if you have kids and want to be in a different school district?
If you are single, do you want to deal with house repairs and all the "grown-up" aspects of home ownership?
I don't think it's going to make a huge financial difference one way or the other, since the high odds are, you won't stay long enough to pay off the mortgage.
As to the rest of your post/thread... the big thing about single homeownership is that, if the market cools down (which it will at some point, it always does) it's going to be harder to sell. And if you are young and single, what if you need to move for work? What if you get married and the size and location of the house you want changes? What if you have kids and want to be in a different school district?
If you are single, do you want to deal with house repairs and all the "grown-up" aspects of home ownership?
I don't think it's going to make a huge financial difference one way or the other, since the high odds are, you won't stay long enough to pay off the mortgage.
Posted on 7/17/15 at 10:58 am to lighter345
quote:
Am I being fiscally irresponsible if I have over $70k saved, in stocks, but plan on renting down here for the next 3-5 years?
Not at all.
I'd have a hard time buying anywhere if I was single with no kids.
I don't want to mow the grass, fix the sink, paint the walls, pressure wash the patio, etc you get the point. I think a few others have said this, but keeping personal expenses and to-do list minimized would be paramount for me.
Posted on 7/17/15 at 10:59 am to GenesChin
quote:
Also, for most people who have a mortgage, being single is a better tax benefit than being married due to mandatory itemizing for both.
This is a very valid point. For a lot of young married couples who buy that 250K house, the actual amount of itemized deductions that are really meaningful (i.e. the amount over the standard deduction) is very small, and certainly doesn't result in the huge tax benefits marketed by realtors.
Of course... single = one income.
Posted on 7/17/15 at 11:06 am to LSUFanHouston
One thing to consider is how easy it is to relo if you are single and rent. That ability to easily move could mean a ton more $ over a career.
Posted on 7/17/15 at 11:17 am to LSU1018
quote:
by LSU1018
I think a lot of it depends on the rental market in your area. It's crazy what rent goes for in Baton Rouge area so I think you are better off owning here.
I think this is the best answer, it depends on the market you are in. Some areas it makes more sense to rent, some it's better to own. Off the top of my head, I think the areas where real estate is so over priced like New York and Los Angeles it actually makes more sense to rent.
Posted on 7/17/15 at 11:20 am to TejasHorn
Personally I consider home ownership as a two part payment -- A forced savings account and a rent payment.
It is a good deal if you can keep interest payments (minuts tax benefit), taxes, and insurance less than your rent would be.
The rest is just forced savings and really shouldn't be taken into account. You could make money on it, or you could lose money on it.
That is a very basic rule, but obviously you need to take into account larger expenses a house can incur. It's certainly not cut and dry on which option is better. Have to look at each different situation.
It is a good deal if you can keep interest payments (minuts tax benefit), taxes, and insurance less than your rent would be.
The rest is just forced savings and really shouldn't be taken into account. You could make money on it, or you could lose money on it.
That is a very basic rule, but obviously you need to take into account larger expenses a house can incur. It's certainly not cut and dry on which option is better. Have to look at each different situation.
This post was edited on 7/17/15 at 11:22 am
Posted on 7/17/15 at 11:49 am to LSUfan20005
quote:
One thing to consider is how easy it is to relo if you are single and rent. That ability to easily move could mean a ton more $ over a career.
Absolutely and I mentioned it in an earlier post.
When you are young and single... the rent vs own thing has more to do with lifestyle than it does money.
Posted on 7/17/15 at 11:52 am to SouthOfSouth
still single.
I grapple with this debate every few months.
I have the cash / income for a $400k house and can do it comfortably. That would be a pretty good townhouse in Houston.
But I like my freedom. and the idea of buying something and then needing something different within 5 years scares the shite out of me. what I met someone and we wanted the white picket fence crap, not a three story townhome with zero yard and shitty parking.
Would I need to sell and pay $$ on realtor commissions - decreasing my equity?
Texas also has rather high property taxes.
now if I am still single in a year or two then I will probably say frick it and buy something. In the mean time I am paying average rent but I am pretty happy about my set up.
I grapple with this debate every few months.
I have the cash / income for a $400k house and can do it comfortably. That would be a pretty good townhouse in Houston.
But I like my freedom. and the idea of buying something and then needing something different within 5 years scares the shite out of me. what I met someone and we wanted the white picket fence crap, not a three story townhome with zero yard and shitty parking.
Would I need to sell and pay $$ on realtor commissions - decreasing my equity?
Texas also has rather high property taxes.
now if I am still single in a year or two then I will probably say frick it and buy something. In the mean time I am paying average rent but I am pretty happy about my set up.
Posted on 7/17/15 at 12:17 pm to dkreller
quote:
renting is "throwing your money away."
Posted on 7/17/15 at 12:57 pm to TejasHorn
I'm not siding either direction because this is a highly situational issue, but I didn't see the mention of rent increases. If you're going to rent long term, the rents will move up with inflation/market trends. They will stay locked in if you have a mortgage though.
Posted on 7/17/15 at 2:05 pm to LSUAfro
I am disagreeing with $40k as a low end range for maintenance, upkeep, and upgrades over 20 years. You could easily hit $2k a year with a maid and a lawn guy.
Posted on 7/17/15 at 2:06 pm to TejasHorn
We rented a completely furnished high rise that included everything - cable, wifi, electric in Houston for 18 mo. I think the owner was in the hole about 500-600 per month. We've now semi-retired to Florida and we are doing the same thing in a large condo on the beach. We do own a house that we will eventually land in, but for now we are renting it out enjoying the flexibility that renting another place gives us.
Maybe consider a rental place where you like to vacation if you feel the need to invest in real estate. Any decision you make varies so much depending on your needs and your location.
Maybe consider a rental place where you like to vacation if you feel the need to invest in real estate. Any decision you make varies so much depending on your needs and your location.
Posted on 7/17/15 at 2:17 pm to Athanatos
Agree to disagree.
Posted on 7/17/15 at 6:37 pm to GenesChin
quote:
Plus there is the lifestyle value of living in a home. Garage, yard, more space, ability to wash car, storage and many other things that most condos/apartments are missing
There is added lifestyle value, but there is also additional responsibility, beyond the financial aspect. There is yard upkeep, general landscaping upkeep, planning and tracking routine maintenance, etc that wouldn't really even be a consideration as an apartment renter.
Posted on 7/17/15 at 6:45 pm to TejasHorn
quote:
But of course you have a paid off house after 20 years along with tax breaks along the way.
Here lies my main issue with people buying houses. I think it is safe to say most people don't stay in the same house over 10 years (maybe less?). Therefore, they are paying mostly interest in the house and will have very little equity if appreciation does not come in to play.
If I couldn't buy a house for 50 - 70 cents on the dollar, I wouldn't even think about buying. Paying market value and getting a 30 year loan is a suckers game in my opinon.
Posted on 7/17/15 at 8:09 pm to TejasHorn
quote:
There seems to be an almost universal feeling that renting is "throwing your money away."
That feeling isn't even approaching universal.
Posted on 7/17/15 at 8:55 pm to LSUfan20005
quote:
One thing to consider is how easy it is to relo if you are single and rent. That ability to easily move could mean a ton more $ over a career.
This is the formula I have used. I think part of the answer to this question depends on the market as well. Where I am at it is inflated and tend to keep me from buying.
Posted on 7/17/15 at 10:08 pm to GenesChin
quote:
This is in practice pretty much false. Everyone who has a mortgage effectively "rents"
Look at the mortgage interest on a home, you are paying someone else to live in that home.
Big difference is that government gives tax breaks + you are signing a 30 year decreasing rent lease
Lolwut. Trying way too hard bro
Posted on 7/17/15 at 10:57 pm to Athanatos
(no message)
This post was edited on 10/20/21 at 11:39 am
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