re: For you youngsters; The truth about owning a home

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I get asked to repair what others have "fixed" all the time.

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I would rather writes checks for others to fix shite around my house and know they are doing it correctly.

I can keep working and making more money while they fix my house.

Also, frick painting. That shite sucks.

I don't claim to be an expert on ovens. I took out the temperature sensor and tested it thinking that would be the issue. No luck, it was working fine. After that I just said frick it and called someone.

Just because you can do something doesn't mean you have to. I'd rather just pay someone to come take care of it so I can go back to my actual job.

From my experience, it seems to be that renting is more cost effective for roughly the first 3-4 years. Around year 5, buying starts to come out ahead.

Remember, that while your mortgage payment is cheaper than your monthly rent, property taxes often add an extra mortgage payment worth at the end of the year, down payments require a lot of money up front, and one major roofing, plumbing, appliance, or HVAC repair can set you back thousands easily.

If you lack location stability in your life, and require the freedom to switch jobs and cities on the fly, renting is probably the better option.

If you have stability and want to put down roots in the same place forever, buying is more effective.

It’s all about long verses short term. Think about it this way:

My rent for a similar home to mine would be, say, $1700. Mortgage is $1200, and property taxes are roughly equal to a mortgage payment.
So, before maintenance but after property taxes, I’m saving $400/month by owning. However, I had to put $20k down! For that monthly savings to add up to that down payment would take 50 months (or just over 4 years) to break even. Remember, that’s BEFORE maintenance.

I bought a fixed-upper a little over 2 years ago. So, I have had to sink a couple grand into plumbing repairs, about $1k for electrical, and buy a new washing machine because mine broke. All told, the completely non-voluntary repairs (ie not just aesthetic or comfort improvements) are probably over $6k over that span, and there’s a lot of maintenance being deferred due to cost. That’s another 15 months worth of time needed to “break even”.

Now, if rents continue to climb, then my math starts looking way better for me, but it’s still not some great deal.

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Besides your mortgage & escrow, you should expect to drop another $5K/yr average on upkeep & maintenance.


Jesus man, there’s no way.

.... it's not far off, really. Do you pay for termite treatment, maid service, carpet cleaning, driveway pressure washing, lawn service or grass cutting? Also, count any deductibles ($500-$1,000) from any insurance claims, taking large trees down, etc. This does not even include breakdowns of water heaters, HVAC, etc. And, if you do it yourself, don't you have to count the cost of buying your own pressure washer, riding mower, chainsaws, paint, etc. It easily adds up.
And

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I’ve had my home for 10 years and never spent $1k on any one thing

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You most certainly have deferred maintenance or a major appliance or roof on the horizon.

It's an average, some years you will get fricked and other years are nothing. Just depends on the year and time horizon.

Every home has some deferred maintenance; it is just a matter of what and how much the cost will ultimately be.

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Remember, that while your mortgage payment is cheaper than your monthly rent, property taxes often add an extra mortgage payment worth at the end of the year

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That's almost always built into the mortgage payment through Escrow anyway, so most people aren't really thinking about it. The down payment and PMI early on if you don't have the cash is the tougher pill to swallow. It's basically interest on a mortgage just to have one and not correlated to the rate so it's free money for the bank since they're taking the risk on a low down payment loan if someone loses a job.

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My rent for a similar home to mine would be, say, $1700. Mortgage is $1200, and property taxes are roughly equal to a mortgage payment.
So, before maintenance but after property taxes, I’m saving $400/month by owning. However, I had to put $20k down! For that monthly savings to add up to that down payment would take 50 months (or just over 4 years) to break even. Remember, that’s BEFORE maintenance.

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This is why it's good to stay in a house for at least 4-5 years if you can. The difference here is that your breakeven point turns into some equity. In that time frame, your house could increase a lot, a little, or not at all in value. Either way, the "Breakeven" point still has value where in renting, the financial value is zero. It's all about job/life flexibility in renting. Financial flexibility typically favors owners outside of losing a job. Every situation is different, but more often than not, owning trumps all if you can stay well within your means and plan to live in an area for a long time.

Depends on life style… was great to have a yard… for the kids… garden … pool…..

Retired empty nester and now more space and upkeep but cost less to just stay put than.. sell and move to a smaller new house …..house been paid of since I was in my mid forties.

I like my life path… my brother took a different….lived overseas mostly in Bangkok ( retired there now)… always lived in a nice hotel.. rented two adjoining rooms so when people came to hang out they used the other room as a den… hotel took out the bed and put in furniture…

He philosophy since he was in his 20s was I want to be able to walk into my residence… grab a jacket and my banking books… and get on a plane…

He enjoyed and enjoys his life… I enjoy mine…

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Most decent 1 BEdrooms in big cities are well over $1500 (if not closer to $2k)

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The one bedroom place we rented before buying our place was $2300/mo, and it was not anything special. And the only reason it was that cheap was because our landlord was a good guy who didn't raise the rent astronomically on us each year. Prior to that we were paying $2900/mo for a one bedroom - when they said the rent was going up $500/mo on the new contract I told them to frick off.

I would have drowned a toddler for $1500/mo.

Those payments do turn into “equity”, but you can only unlock that equity by selling your home, which usually means buying or renting another home.

Do not fall into the trap of thinking that your home is an investment vehicle. It is not. The home you actually live in is nothing but a liability.

Real estate can be a great investment, but when it’s the home you live in, it’s all about minimizing the extent to which it is a liability.

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so explain how you are getting your numbers

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Not everyone wants to spend their free time doing yard work

I do have a blower, I use it to start the fire in my green egg faster