- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: CNBC: Renting can make you wealthier than owning a home
Posted on 5/3/23 at 12:51 pm to dewster
Posted on 5/3/23 at 12:51 pm to dewster
quote:
I’ve bought 4 houses in my life so far. I made very good money on the 3 that I’ve sold, even taking repairs, maintenance, and updates into account. I wasn’t strategically buying or selling either. I was doing it because we needed to move to a new city. The gains I made on selling were put into the next house in the form of equity as a down payment, increasing my advantage over renting every time I bought a new home.
So many variables in this. My first house was bought for $180k and sold for $210k. Nice money maker, right? Well, by the time I added up mortgage interest, property taxes, new HVAC, new garage door, multiple roof replacements, lawn maintenance, etc. I averaged spending well over $900/month on home owner expenses that did not increase the value of my home. I lived in that home for 8 years. It was near $100k in "costs" to own that home and it was a home in good condition that was only 14 years old when we bought it.
2
Posted on 5/3/23 at 1:06 pm to Paul Allen
quote:I bought my first house for $210k and sold it just over 3 years later for $250k. After the realtors got their cut of the deal, I walked out of the closing with a check for $30k.
Of course renting is better. Your home isn’t an asset. It’s not making you any money.
3 years of rent @ $1050/month = $37,800
3 years of mortgage @ 1400/month = $50,400
It cost $12,600 more in mortgage payments than I would've paid in rent over that span, but with the $30k in equity I built over those 3 years, I ended up coming out $17,400 ahead by owning vs renting in that span. Not to mention having a much bigger place, my own yard, and not having shared walls with neighbors.
The house I'm in now cost me $350k in 2019 and appraised for $470k last summer. So how is my home not an asset or making me any money?
This post was edited on 5/3/23 at 1:06 pm
Posted on 5/3/23 at 1:11 pm to notsince98
quote:So if you didn't own the house, how much would you have paid in rent over those 8 years?
So many variables in this. My first house was bought for $180k and sold for $210k. Nice money maker, right? Well, by the time I added up mortgage interest, property taxes, new HVAC, new garage door, multiple roof replacements, lawn maintenance, etc. I averaged spending well over $900/month on home owner expenses that did not increase the value of my home. I lived in that home for 8 years. It was near $100k in "costs" to own that home and it was a home in good condition that was only 14 years old when we bought it.
$30k principal gain on the sale
$100k in mortgage interest, taxes, and maintenance expenses
$70k net loss = $730/month over 8 years
Was your rent cheaper than $730/month?
This post was edited on 5/3/23 at 1:12 pm
Posted on 5/3/23 at 1:15 pm to tiggerthetooth
quote:
especially on young people, people without money, minorities
Interesting, well young people tend to not have a lot of money.
But minorities are buying large swaths of land and asians are the highest earners in this country.
Posted on 5/3/23 at 1:20 pm to Paul Allen
Bought and sold 3. Current home paid for rolling the profits of each to the next. I'm just a construction worker from down the bayou but owning homes has worked for me.
Posted on 5/3/23 at 1:20 pm to tiggerthetooth
Rent = mortgage+profit
So, how?
So, how?
Posted on 5/3/23 at 1:20 pm to tiggerthetooth
Also if i live in a city like nola or ny, id be renting. Mainly because i would have never planned on staying there forever and if you dont like the area you are in, you can get out and move on much easier.
Posted on 5/3/23 at 1:21 pm to notsince98
quote:
So many variables in this. My first house was bought for $180k and sold for $210k. Nice money maker, right? Well, by the time I added up mortgage interest, property taxes, new HVAC, new garage door, multiple roof replacements, lawn maintenance, etc. I averaged spending well over $900/month on home owner expenses that did not increase the value of my home. I lived in that home for 8 years. It was near $100k in "costs" to own that home and it was a home in good condition that was only 14 years old when we bought it.
Mortgage interest $450/mo
Prop taxes $150/mo
New HVAC… $4000? $42/mo (8 years)
New garage door $1200 $13/mo
Multiple roof replacements in 8 years sounds ridiculous but let’s say one was $12k… $125/mo
Lawn maintenance… $20/mo?
I’ve got you at about $800/mo with one roof replacement and $925/mo with 2. But let’s call it 2, which again is totally ridiculous. And you paid that for 8 years so grand total = $88,800
Subtract your equity gain and you’re at $613/mo.
Posted on 5/3/23 at 1:27 pm to Tiger Prawn
quote:
So if you didn't own the house, how much would you have paid in rent over those 8 years?
$30k principal gain on the sale
$100k in mortgage interest, taxes, and maintenance expenses
$70k net loss = $730/month over 8 years
Was your rent cheaper than $730/month?
Not quite. $210k minus realtor fees ended up at $197.4k.
Making the adjustments I could have rented a very nice and spacious 2 bedroom, 2 bathroom apartment with very nice amenities and no maintenance for around the same price. That apartment would have been much closer to work and save a significant amount of gas over that 8 years.
Would that have been worth it? No. I like my music loud and my subwoofers large. But owning that house was not a money maker for me in any way.
Own a house if you want to own a house. Rent if you want to rent. Everyone needs to do what works best for themselves. Home ownership is a gamble like everything else.
Posted on 5/3/23 at 1:31 pm to tiggerthetooth
quote:
especially on young people, people without money, minorities
That’s mighty racist
Posted on 5/3/23 at 1:37 pm to tiggerthetooth
Then why do you socialist folks force banks to lend to under qualified buyers, and now asking responsible Americans to pay for under qualified buyers?
Posted on 5/3/23 at 1:41 pm to PhiTiger1764
quote:
Mortgage interest $450/mo
Prop taxes $150/mo
New HVAC… $4000? $42/mo (8 years)
New garage door $1200 $13/mo
Multiple roof replacements in 8 years sounds ridiculous but let’s say one was $12k… $125/mo
Lawn maintenance… $20/mo?
I’ve got you at about $800/mo with one roof replacement and $925/mo with 2. But let’s call it 2, which again is totally ridiculous. And you paid that for 8 years so grand total = $88,800
Subtract your equity gain and you’re at $613/mo.
I was being a bit conservative on my costs claims but if you just need more detail, here you go but the costs get worse with these actual numbers (Kansas City area):
Mortgage interest was around $750/month ($150k @ 6.25% we put little down) and ignoring PMI. we had a 2nd loan at a higher rate, too
Property taxes were $3,600/yr = $300/month
Home Insurance was $1,200/yr = $100/month
HVAC = $6,500 ($67/mo)
Flooring = $3,500 ($36/mo)
Garage door and opener = $900 ($9/mo)
Multiple roof replacements with siding repairs = $2k deductible x 2 = $4k total ($42/mo) (we get large hail storms regularly up here)
Tons of other items not worth adding up but that right there comes to $1,300/mo.
This post was edited on 5/3/23 at 1:43 pm
Posted on 5/3/23 at 1:49 pm to tiggerthetooth
Rent in most places probably exceeds $1k. Might as well just buy a home for that price, build equity and upgrade later if you can afford it.
ETA: I also enjoy not worrying about sharing walls with neighbors or an a-hole building manager. I can do generally whatever I want. Don’t even have an HOA.
ETA: I also enjoy not worrying about sharing walls with neighbors or an a-hole building manager. I can do generally whatever I want. Don’t even have an HOA.
This post was edited on 5/3/23 at 1:52 pm
Posted on 5/3/23 at 2:01 pm to tiggerthetooth
Show me the math on how renting can make you wealthier than buying. It doesn’t exist
Posted on 5/3/23 at 2:02 pm to LSUFanHouston
Real estate developers are about to go crazy with converting commercial office space to residential because office space in major markets are up to 50% empty.
So they are going to pimp out renting flats and apartments. There will be more articles talking about how awesome renting a one bedroom unit in a 30 story tower is.
So they are going to pimp out renting flats and apartments. There will be more articles talking about how awesome renting a one bedroom unit in a 30 story tower is.
This post was edited on 5/3/23 at 2:04 pm
Posted on 5/3/23 at 2:02 pm to Upperdecker
quote:
Show me the math on how renting can make you wealthier than buying. It doesn’t exist
Maybe they were talking about landlords.
Posted on 5/3/23 at 2:03 pm to 3nOut
quote:
but how is the landlord making money in that scenario?
Older house in the historic district in Fayetteville that was already paid off. One of the best places to live in America. We felt lucky to be able to live there for as long as we did, we would never be able to afford to buy the house though.
Posted on 5/3/23 at 2:14 pm to notsince98
quote:
Tons of other items not worth adding up but that right there comes to $1,300/mo.
Ok yea. That’s significantly worse than you made it out to be.
But to be fair only $154/mo of those expenses were unplanned. You knew going in what interest, taxes, and insurance would cost, and still made the decision to buy over rent.
So I don’t think your anecdotal experience warrants the advice that “Home ownership is a gamble like everything else.”
Posted on 5/3/23 at 2:14 pm to tiggerthetooth
The article may as well be titled "Buying a home is an investment". After closing fees, remodeling, repairs, etc. obviously the average person is going to be behind where they would be someone who was just renting for a few years.
Eventually you see a return on that investment.
I'm not sure who this article is written for but they're probably not reading CNBC.
Eventually you see a return on that investment.
I'm not sure who this article is written for but they're probably not reading CNBC.
Posted on 5/3/23 at 2:17 pm to tiggerthetooth
"You will own NOTHING, and love it..."
Page 3 of 8
Popular
Back to top
Follow TigerDroppings for LSU Football News