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Message
re: Home ownership losing importance as "American Dream"
Posted on 6/4/14 at 12:36 pm to TejasHorn
Posted on 6/4/14 at 12:36 pm to TejasHorn
I purchased my first home last year. The intrinsic satisfaction I experience by knowing I own this property cannot be overstated. Any work required, I do it. Nothing matches the gratification of improving what is yours.
I understand the reasons others have for not purchasing a home but for me this was the route.
I understand the reasons others have for not purchasing a home but for me this was the route.
1
Posted on 6/4/14 at 12:38 pm to SpidermanTUba
quote:
Anyone who buys an old house will hate it.
I guess I'm an outlier.
Posted on 6/4/14 at 12:39 pm to Choctaw
quote:
you're saying the amount of money someone would spend on closing costs, realtor fees, and repairs would be enough to retire on?
Over the life of the home. Yes. I just spent over $10,000 putting a new roof on my house. I have spent $2K on a/c repair. If you ever plan on getting the equity out (which seems to be a big plus in this thread) you are going to have to remodel to keep up with the changing neighborhood and times. Remodeling is expensive as heck.
Posted on 6/4/14 at 12:40 pm to SpidermanTUba
quote:
Yeah. That's what everyone who bought in 2006 thought. 30 years vs. 1 year. There's the big difference between buying and renting.
A couple things.
I was VERY fortunate in that I bought near the bottom of the market. That's why I've built up so much equity so quickly. I did have to go through a short sale, but it was worth it.
Also, even for most of the people who bought in 2005/2006, if they hang on to their homes to retirement, they still will have paid off their home and they'll have PLENTY of equity. And, as long as they didn't lose their jobs, it's not like they still couldn't afford it. They just had to go through a few years of being "under water" on their home. I remember shitting as I watched my 401(k) go down the tubes. Now, I've got it all back PLUS. Sh!t like that happens.
But, as long as you pay off your mortgage, the only thing you'll have to worry about when you retire (or get close to retirement) is f*cking property taxes. Hence, just one good reason to downsize once you hit retirement and you don't need the space any longer. My parents downsized to live in an 55+ community in a 2 bedroom, 2 bath, 1700 s.f. home. They're loving it. Some of their long-time friends live in the same community and all they have to worry about are property taxes, a small HOA fee, and utilities. Their pensions more than provides them with a nice living as a result.
Posted on 6/4/14 at 12:48 pm to lsu13lsu
quote:
Had she invested the money into an IRA (and other accounts) that she saved by not having to remodel, pay closing costs and realtor fees, and make repairs around the house she would have been fine too. If I had to guess it wasn't a lack of homeownership that was her downfall.
That's not even going to come close to the equity you'll build up in your home over time.
Like I said, I'd be paying more in rent when you consider the tax savings. And, when you consider the tax savings, it's not just your home interest -- being able to itemize allows you to deduct so much other sh!t. You have to add that to your tax savings as well.
I'm coming up on 6 years of ownership. My house was about 5 years old when I bought it, so it was relatively new. So far, I have had to spend $5K on a new A/C - which the company financed at 0% for 3 years. I'll probably have to replace my roof in the next 5-10 years. But, so far (knock on wood), that's all I've paid. I do plan on getting granite and stainless steel appliances in my kitchen soon (in the next year after I pay off the A/C), but, again, I've already got over $100K in equity.
Posted on 6/4/14 at 12:51 pm to lsu13lsu
Seriously?
To start my house payment is roughly $1,000 a month. About $300 is principal(equity) and the rest is interest, property taxes and insurance. The same home would rent for $1,400 a month. $300 principal a year is roughly $3,600 but is increasing every year. Adding in the savings from rent, another $4,800, that brings me to roughly $8,400 a year before taking homestead exemption into account.
Over a ten year period, if you think ill spend $84,000 on repairs to my home, then LOL. Used a spreadsheet to calculate principal over the first ten years of the loan and it came to $102,000 + $48,000 in non adjusted rent. So really closer to $150,000 in 10 years.
How often do you change a roof? How often do you replace the A/C? What about appreciation?
To start my house payment is roughly $1,000 a month. About $300 is principal(equity) and the rest is interest, property taxes and insurance. The same home would rent for $1,400 a month. $300 principal a year is roughly $3,600 but is increasing every year. Adding in the savings from rent, another $4,800, that brings me to roughly $8,400 a year before taking homestead exemption into account.
Over a ten year period, if you think ill spend $84,000 on repairs to my home, then LOL. Used a spreadsheet to calculate principal over the first ten years of the loan and it came to $102,000 + $48,000 in non adjusted rent. So really closer to $150,000 in 10 years.
How often do you change a roof? How often do you replace the A/C? What about appreciation?
Posted on 6/4/14 at 12:53 pm to MMauler
quote:
That's not even going to come close to the equity you'll build up in your home over time.
On average you will spend 1% of your home value per year on repairs and maintenance. Go put that in a retirement calculator and tell me you cannot build up some savings with that. Then on top of that add to it amounts spent on remodeling which is very expensive and necessary if you expect to protect your equity.
Posted on 6/4/14 at 12:54 pm to Wasp
But, if you want to rent, I will gladly be your landlord and you can pay my mortgages for me for the rest of your life.
Posted on 6/4/14 at 12:55 pm to SpidermanTUba
quote:
Yeah. That's what everyone who bought in 2006 thought.
I bought my house in 2006 and it's worth just as much if not more now as it was then. It has more to do with where your home is than when you bought it.
quote:
30 years vs. 1 year.
30 years to pay it off fully but you can sell at anytime and get your equity back. A 1 year rental lease you'll never get any of your money back.
quote:
There's the big difference between buying and renting.
Right, there is. Renting is putting money in somebody else's pocket and never getting any of it back.
Posted on 6/4/14 at 12:57 pm to Wasp
quote:
How often do you change a roof? How often do you replace the A/C? What about appreciation?
If you are going to protect your equity you have to remodel and keep up with the times. You also have to do small things you don't even think about like cut grass and maintain equipment.
It isn't as easy as everyone here seems to make it out. For the record, I am a happy homeowner. I just don't think it is wrong to think you cannot get equally ahead while renting.
I laugh how all the gungho homeowners always argue this point because it has been drilled in our heads that home ownership is some key to vast amounts of wealth.
A home is a liability not an asset. If you ever get your money out you'll be homeless or renting or very much downsized. But, the net effect will not be much different than had you rented and saved the difference.
Posted on 6/4/14 at 1:02 pm to lsu13lsu
quote:
If you are going to protect your equity you have to remodel and keep up with the times.
Not in all cases. I've seen property that was not maintained actually increase in value due to its location. Homes will, to a large extent, hold their value if the neighborhood is a desirable one regardless of condition and maintenance.
Posted on 6/4/14 at 1:04 pm to Jay Quest
quote:
I purchased my first home last year.
Damn, I still owe you a house warming gift young man. Next time I'm on your version of the coast.
Posted on 6/4/14 at 1:08 pm to Holden Caulfield
we owned a home, then sold it at the market peak (YEAH), and the home we were buying had some issues on inspection, so we ended up having to rent. we ended up renting for 7 years or so.
we loved renting but it got old. I didn't mind throwing the money away, as my rent was cheaper than a house payment but we got sick of not being able to do what we wanted with the house.
We recently bought again. so far its been a pain in the arse but we enjoy it. We like our location, and the house was completely redone which was nice.
we loved renting but it got old. I didn't mind throwing the money away, as my rent was cheaper than a house payment but we got sick of not being able to do what we wanted with the house.
We recently bought again. so far its been a pain in the arse but we enjoy it. We like our location, and the house was completely redone which was nice.
Posted on 6/4/14 at 1:12 pm to lsu13lsu
quote:
On average you will spend 1% of your home value per year on repairs and maintenance. Go put that in a retirement calculator and tell me you cannot build up some savings with that.
1% of my home value is less than the savings I receive in a year when comparing my monthly mortgage/tax payments to what monthly rent would be (it's about a $400 difference per month).
Posted on 6/4/14 at 1:14 pm to MMauler
quote:
First, building up equity. I've owned my home for about 6 years, and I have over $100K in equity. I view this as a small part of retirement planning.
Really? You better hope the market doesnt crash again
Posted on 6/4/14 at 1:15 pm to lsu13lsu
quote:
Over the life of the home. Yes. I just spent over $10,000 putting a new roof on my house. I have spent $2K on a/c repair. If you ever plan on getting the equity out (which seems to be a big plus in this thread) you are going to have to remodel to keep up with the changing neighborhood and times. Remodeling is expensive as heck.
You have the same thing renting, that's why they often raise the rent every few years. But with a home mortgage you're locked in at a fixed rate.
Posted on 6/4/14 at 1:16 pm to SDVTiger
quote:
Really? You better hope the market doesnt crash again
You should probably learn about diversification of assets.
Posted on 6/4/14 at 1:16 pm to SDVTiger
quote:
Really? You better hope the market doesnt crash again
all real estate is local. The explosion and deflation were national but that is the exception. the real estate market seems to have decoupled. While a market implosion is definitely a possibility, its going to be regional. if you are living somewhere desireable, and in a desireable location, you are probably OK.
Posted on 6/4/14 at 1:18 pm to SDVTiger
quote:
You better hope the market doesnt crash again
We got rid of Barney Frank. we got rid of Chris Dodd. Now if we can resist putting another Clinton in office we may be on track in protecting the housing market.
Posted on 6/4/14 at 1:21 pm to Holden Caulfield
We didnt get rid of thier Law tho
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