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Old 07-20-2008, 11:06 PM
 
Location: Foot of the Rockies
90,316 posts, read 120,147,178 times
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Quote:
Originally Posted by katzenfreund View Post
Please everyone, let us stay on topic and not get too personal here.
Thank you!
Thank you!
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Old 07-20-2008, 11:17 PM
 
Location: Colorado Springs, CO
2,221 posts, read 5,245,953 times
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Quote:
Originally Posted by Katiana View Post
Well, you keep harping about how even if you own free and clear there are costs, as if there were some way one could live for free.
Nope, I don't argue or imply that anyone lives for free. Quite the opposite, in fact.

Quote:
Originally Posted by Katiana View Post
My house payment is about $1000/mo for a 2500 sq. ft. house in Louisville. Here are some sample rents, from today's Daily Camera:

Louisville: 1800 sq ft house, $1500/mo. Pet negotialbe. Do you want someone to be able to tell you if you can have a pet?

Louisville: 4 BR, $1325/mo

Louisville: 4 BR, $1500/mo

Who is paying more? Me, or the renters?
It all depends on where that house is. A 2500 sq ft house in Georgetown ain't the same as a 2500 ft house in Anacostia (but they're both in DC).

Last edited by katzenfreund; 07-21-2008 at 08:30 AM.. Reason: please discuss the topic NOT the poster
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Old 07-20-2008, 11:29 PM
 
Location: Colorado Springs, CO
2,221 posts, read 5,245,953 times
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Quote:
Originally Posted by EscapeCalifornia View Post

After 30 years of renting, you're still at the mercy of the landlord.
After 30 year of paying a similar sized mortgage, you're sitting pretty.
I've never been at the mercy of a landlord. If things went bad, I could leave at the end of the lease, or break the lease and lose my deposit.

In contrast, how many "owners" are trapped in a house they cannot sell, or are being harassed by an overzealous homeowner's association that decides to tell them what color to paint the house, how high to mow their grass, not to park a car in the street, etc etc. How many of these sitting pretty homeowners get hit by local assessments, bond issues, or get sued by some idiot that tripped on an icy sidewalk? What sort of warm fuzzy does a sitting pretty homeowner have when a hailstorm trashes the roof or a tornado blows it clean off?

This idea of absolute homeowner advantage doesn't play out quite so clearly in the real world.
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Old 07-21-2008, 09:47 AM
 
Location: Earth
1,644 posts, read 4,326,432 times
Reputation: 1566
[quote=Fastway57;4531984]
Quote:
Originally Posted by rybert View Post
You have no idea what's going-on around you.... do you?

More than you will ever know!

I love a good muscle car as much as the next gear head, but that is such a waste!

I dont see how a road trip in a old car is such a waste. It is actually good mental therapy at least for me. Espically when the grand kids go with us to see my folks. But that is what's great this is America it my CHOICE what to drive.
I think muscle cars are cool, too. I'd love to have one for a weekend cruise here and there, knowing full well that I should (and probably will) be paying a premium to run it. That's fine by me. But, from a practical and economical standpoint, I don't 'need' a muscle car.

It's the people who CHOOSE to drive whatever big, inefficient vehicle they want and then moan and complain about gas or diesel prices. You know, the pimped-out Escalades, the lifted Powerstroke diesels, the H2s....the people who fall into this category can please sit down and ****!!!
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Old 07-21-2008, 10:06 AM
 
Location: Foot of the Rockies
90,316 posts, read 120,147,178 times
Reputation: 35920
Quote:
Originally Posted by Bob from down south View Post
It all depends on where that house is. A 2500 sq ft house in Georgetown ain't the same as a 2500 ft house in Anacostia (but they're both in DC).
Actually, the one house with location posted is in a lower-income neighborhood than mine. In fact, it's in the neighborhood where we used to live, when our income is lower. In general, rentals are in the lower-income areas of cities.

Last edited by Katarina Witt; 07-21-2008 at 10:14 AM.. Reason: addition
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Old 07-21-2008, 12:16 PM
 
Location: Colorado Springs, CO
2,221 posts, read 5,245,953 times
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Quote:
Originally Posted by Katiana View Post
Actually, the one house with location posted is in a lower-income neighborhood than mine. In fact, it's in the neighborhood where we used to live, when our income is lower. In general, rentals are in the lower-income areas of cities.
I've lived in rentals my entire life and haven't lived in a lower-income area in several decades. You'd be hard pressed to find a house as nice as my last rental in Bel Aire.

Of course the real cost comparison has to take into account how much has been put down on a house, the turnover costs, and maintenance and landscaping costs, among others. A standard composite shingle roof needs replaced every 15 years or so. Air conditioner compressors last 10 years on average. Furnaces 10-20 years, depending on type. Renters do not bear these costs...but owners do. And of course a comparison that only considers the house payment misses this in the analysis, and is therefore incomplete and flawed.

If I put 20% down on a $300,000 house, then my payment does not reflect the opportunity cost of the $60K I have tied up from making the down payment. And then there's turnover--closing costs, points, realtors fees, transfer taxes, appraisal fees, funding fees, title insurance etc etc. For the average homeowner, who turns his/her house over in something less than five years, those costs are significant.

For me, in a career that had me move 14 times in 27 years, those turnover fees made renting a much, much cheaper proposition than buying, and shielded me from the risk of being forced to sell into adverse market conditions. Many people thought it was a shame that I was "throwing my money away" all that time, when in reality I was ultimately paying less for my housing than most of those who I worked with who bought every time they moved.

Do I advocate that everyone rent until they can buy a house for cash? No, I don't. But if your employer is moving you around like mine did, it may be the smart move. That said, I see huge problems in how most people approach their homebuying decisions. That starts with asking the bank "how much do I qualify for." That's like asking a car salesman what car you should buy. The bank will give you an answer that will almost certainly leave you overextended. Didn't necessarily used to be that way, but today, asking your lender how much you qualify for and then shopping at that price range is a great recipe for trouble.

I like Dave Ramsey's counsel...first save up a cash emergency fund of 6-12 months of expenses, and then save a down payment, and then take at most a 15-year loan with a payment of no more than 25% of your take-home monthly pay. That'll leave you enough money on hand to take a vacation without running up credit card debt, and to absorb life's little surprises when they inevitably hit you.

But the hideously overextended sheeple have sunk themselves into far more debt than this sort of prudent guidance would allow. And they richly deserve the beating they are taking now. As an old John Wayne movie (The Sands of Iwo Jima) poster says..."Life is tough...it's tougher if you're stupid."

Last, the NAR propaganda that renting is wasting your money, that homebuying is always a smart financial decision--it's self-serving bull**** that often is dead wrong.
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Old 07-21-2008, 12:34 PM
 
11,715 posts, read 40,309,597 times
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Quote:
Originally Posted by Bob from down south View Post
I like Dave Ramsey's counsel...first save up a cash emergency fund of 6-12 months of expenses, and then save a down payment, and then take at most a 15-year loan with a payment of no more than 25% of your take-home monthly pay. That'll leave you enough money on hand to take a vacation without running up credit card debt, and to absorb life's little surprises when they inevitably hit you.
And where might I find the $90k house that can be afforded on such a payment?

And your's is an unusual case. Most people don't move 14 times in 27 years. Of course you'd get eaten up in transaction costs if you'd bought a home every time you moved. And not thinking that the renter doesn't ultimately pay for the maintenance of the house is like someone in Canada or the UK saying they don't pay for health care.
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Old 07-21-2008, 12:50 PM
 
Location: Foot of the Rockies
90,316 posts, read 120,147,178 times
Reputation: 35920
Of course the real cost comparison has to take into account how much has been put down on a house, the turnover costs, and maintenance and landscaping costs, among others. A standard composite shingle roof needs replaced every 15 years or so. Air conditioner compressors last 10 years on average. Furnaces 10-20 years, depending on type. Renters do not bear these costs...but owners do. And of course a comparison that only considers the house payment misses this in the analysis, and is therefore incomplete and flawed.

If you think renters don't pay for these things you have another think coming. These all get passed through to the renter. And your estimates are a little off. We replaced a shake roof that was about 20 yrs old with a composite roof that is supposed to last 40 yrs. Our air conditioner is 19 years old and shows no signs of needing to be replaced. We have not replaced our furnace, which is 30 years old. Perhaps it is because you haven't owned a house that you think these things don't last very long. The other missing variable in this analysis is the tax write-off, which at an income level you would have to have a job that transfers you ~ every two years, is not insignificant. The feds pay a significant portion of my house payment. It's hard to itemize anything else if you don't have a mortgage, b/c you don't have enough deductions w/o one to make it worthwile.

That said, if you are moving often, it may be better to rent and invest your money elsewhere. Which brings me back to my point: buying a house is what worked for my family.
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Old 07-21-2008, 07:35 PM
 
705 posts, read 1,283,729 times
Reputation: 1772
Quote:
Originally Posted by Bob from down south View Post
I don't think so. Miles logged on vacations are nothing in comparison to the miles accumulated in the daily commute of the average American. The great American Road Trip is alive and well...and now since I live in Colorado, that road trip is much shorter as I travel to the many and varied places of interest in this state.

If fuel prices are really having an effect on travel, then traffic will decrease, not increase. And as to the number of places where "true freedom reigns"--that sounds like liberal self-flagellating crybaby poppycock to me. If you think freedom doesn't reign in the U.S., you must not get out of the country much.



Anyone who makes life's choices based on political correctness is an intellectual weakling. Political correctness is nothing more than quasi-codified mob influence.



I own both an SUV and a 45 mpg diesel car. The SUV is 3.5 years old and has 13,000 miles on it. But when I need to get up or down a hill in the snow, or take 4 people and their gear on a camping trip into the mountains, it's a necessity. My 6 year old car has 28000 miles on it. Better to conserve by intelligent choices on housing location than by driving the latest hybrid clown car on the same long commute. Some of those Prius owners are gonna fly right out of their Birkenstocks when they see the $3500 bill for their first battery change.
Exactly what is it that you have against Birkenstocks? Have they ruined your life in some way? And what is it that you have against Prius owners... perhaps a bit pompous in your condemnation of people that want to live a simpler life, getting great gas mileage and GOD FORBID, help the air quality on this planet of OURS. I own a hybrid, not a Prius, and currently get 39 mpg. I have more faith in Toyota to come up with a battery fix years down the road than I do in your prophecies.

You assume (you know what they say about assume) that battery replacement will be $3500. Haven't you seen the prices of all high tech equipment, computers, hard drives, in fact everything that has to do with technology coming way DOWN year by year.

So please get over your phobias about shoes and cars that are good for the planet.

Oh by the way since you mentioned clowns, there were two cannibals eating a clown and one cannibal says to the other, "does this guy taste funny to you."
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Old 07-21-2008, 09:04 PM
 
Location: Colorado Springs, CO
2,221 posts, read 5,245,953 times
Reputation: 1703
Quote:
Originally Posted by Katiana View Post

If you think renters don't pay for these things you have another think coming. These all get passed through to the renter. And your estimates are a little off. We replaced a shake roof that was about 20 yrs old with a composite roof that is supposed to last 40 yrs. Our air conditioner is 19 years old and shows no signs of needing to be replaced. We have not replaced our furnace, which is 30 years old. Perhaps it is because you haven't owned a house that you think these things don't last very long. The other missing variable in this analysis is the tax write-off, which at an income level you would have to have a job that transfers you ~ every two years, is not insignificant. The feds pay a significant portion of my house payment. It's hard to itemize anything else if you don't have a mortgage, b/c you don't have enough deductions w/o one to make it worthwile.
The average figures I quoted come from industry sources. And not owning a house isn't the same as not living in one. I have seen roofs going bad, air conditioner compressors go out, and furnaces replaced.

Nobody's saying that some costs are not passed to the renter. What I am saying is that those costs are included in the rent, where they are not included in a house payment. You were comparing your house payment (which does not factor in all those things) directly with rent (which, as you just told us, does).

As for the tax deduction (it's not a write off), it's generally not advantageous to pay the bank $1 to avoid $0.15 or less in taxes. But the real estate propagandists have done a good job in convincing people that can't do accounting and math that they are winners by going in debt up to their eyeballs to keep the bankers in the life they have become accustomed to.

I sat down with a friend who had been drinking the bankers' KoolAid and did a cash flow analysis for him to show him that his tax deduction, when counterbalanced with interest expense, wasn't nearly the good deal he though it was. And Katiana, if you're in the last 9 years of your mortgage, the feds aren't offsetting nearly as much of your housing payment as you probably think they are.
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