Homeownership 2012 going forward. (2013, mortgage, buying, property taxes)

[syracusa]

Originally Posted by shmoov_groovzsd

I think people need a reality in understanding the financial risks involved. While it can be rewarding to own a home, its not just for everyone.

What type of people (what categories) do you think should not be home-owners?

[Sonnenwende]

I'll buy when I can afford to buy the house that I am about to rent. As it is, the house is way out of our price range to buy, but the rents are extremely depressed in the area (vacation/retirement home area in BFE).

[selhars]

You live in the NE so you should thats hard to do. Most people don't make 100k/yr and anything less than that up there gets you a row home in a bad neighborhood with 1970s interior and a 100sqft backyard with electrical lines 10ft above your head.

It's not QUITE that expensive or bad a situation

I'm SINK and bought my house in the Maryland suburbs of DC in 2003. I ONLY bought it as an investment (and place to live). I was quite happy in a luxury apartment saving money to invest. But co-workers and friends had houses that were appreciating faster than my investments. So my home purchase -- "re-directed" some of my disposable income into my house.

While I am NOT underwater in my house at all -- in terms of PURCHASE PRICE. Given all the upkeep, maintenance, improvements, tools, furniture, decor -- and other "home" things I spend on -- that I NEVER would have spent on in an apartment.....I don't know that I'm a head financially dollar for dollar, of where I'd be if I'd stayed in the apartment and kept renting. (I used to do the math, now 9 years later I just quit and figured it is what it is I don't need to track it.)

BUT -- it's also a lifestyle decision that you can't put a price on. My apartment was a one bedroom with no room for visiting family or friends really (the LR sofa and floor). Visitor parking was a pain. In my house I have a 3 BR, 2 1/2 BA home to myself, which allows for visitor comfort. In my apartment I never really wanted to have people over, now I do. Somehow I feel like my life has broadened. It could just be getting into all the things the homeowners have to do, that renters DON'T -- but I enjoy my home, and I guess that's all that matters.

I'll let the money, potential profit, and if/when I ever have to move take care of itself.

Whether you're a renter or homeowner -- SAVING AN EMERGENCY FUND is paramount. I DO think many Americans have now gotten THAT message. The last five years of the US economy have rattled/awakened/ruined/destroyed a lot of people financially. People who NEVER expected it. I feel SO sorry for some of them. Some profiles on the news or "60 Minutes" -- entire towns decimated -- just break your heart....and it didn't have to be.

[shmoov_groovzsd]

Originally Posted by syracusa

What type of people (what categories) do you think should not be home-owners?

syracusa,

Thats a tough question but for the sake of blanket and generalized statements...

People that understand the running costs (maintenance, upkeep, improvements) and neighborly responsibilities that go into living in a non managed neighborhood or community.
Now, lets face it, that is something that is not written in stone, but probably understood when one drives in a neighborhood where there is that 'pride in ownership'.
The home valuation is irrelevant or almost secondary because that is only a benefit after the fact. The motivating factor is that folks in said neighborhood understand the value of owning a home and the respect what goes with it amongst neighbors.

This may not apply to urban or rural areas. But presumably for most of suburbia, in some ways its sad that the housing industry had to shift to HOA type communities. Now, I am not bashing HOA communities, because quite frankly they were born out of necessity. In modern society where there are two parents working in a family, having someone home to help maintain a house is simply in the minority. HOAs, even though you are paying into it, is sort of that guarantee that a neighbor that is not mindful of appearances, is via HOA rules and bylaws.

So with that being said, generally speaking, just because a bank said they will finance a potential buyer to buy a home, that buyer should really understand the above examples as to what it means to be a responsible neighbor/homeowner after the purchase.

I know where I live in San Diego, there were far too many people using their home equity as ATM machines and over leveraging.
Being prudent and in a perfect world, there should be a clear distinction between savings and a home purchase. There are plenty of people that own million dollar homes here that have 0 net worth and no money for retirement! Its incredible. On the other hand there are also plenty that have wealth but you would never know it.

[hueyeats]

Good!
I encourage as many people to rent as possible.
For if they p!$$ away more of their money, I get to keep it.

Tenant vs LL, I'd rather be that LL anytime of the day... even if it is just one small room shared.
Renter's money = building LL equity = paying off that home for LL

And its possible via buying low, selling high = buy that home cheap & making money from it.

[hueyeats]

Originally Posted by syracusa

What type of people (what categories) do you think should not be home-owners?

Category = Lazy people who won't want the hassle to upkeep & maintain that home.

Can't be lazy if you want to own a home.
Think about it... even that human body needs maintenance from time to time.. to keep that home in great condition, you need to maintain repairs or you'll have a non-running bathroom / fridge / roof that will portray that home owner like those hoarders in the buried alive episodes.

The therapist won't come out to say it but that mental illness is actually called "laziness" or "sloth" as 1 of the 7 sins in the bible.

[selhars]

I encourage as many people to rent as possible.
For if they p!$$ away more of their money, I get to keep it.

Please consider that .......renting is not necessarily 'pissing' money away.

[hueyeats]

^^^And why not???
Unless that say $1000 goes toward's one's parents home that one day you that child will inherit...
If "all" that $1000 goes to a LL to build that LL's equity... how is that not pissing it away???

I've been a renter too many times over & that's what I've felt.

P.S. Please do not include the greedy who tried to buy more house than they can afford, hence is burnt when they drown (sour grape mentality)...
That is a lesson "some people" have to learn before they smarten up to know to buy what they can afford, property that is that real sale, hence NOT money pit.
Like both me & DH have advised a few of our friends not to even buy during 2007 or even 2009... but still they never listen.
I worked during the housing boom in housing... I was never roped into buying it when I know housing is overpriced then = why me & DH chose renting then waiting for the "right" time to buy & still never "willing to" over pay (low ball till we get our ideal, real sale = more house than even material "cost" even sans labor; add labor an even greater deal).

[hueyeats]

Add: If people today are wiser...
Why do they still involve blindly in a multi-bid situation??? I really really don't understand.
Really... if the housing market is that bad... you would think anyone offering for that same house is not only coincidental, must be fixed!

You don't think a smart investor who bought that investment home (even to rent if not staying there) at not only that 30% depreciation via housing economy & went further to protect themselves another 30% (buy time till 2016 or even 2020 at 2-3% depreciation a year), bought a home that is not only totally moved in (livable), the many updates has already more than make their money back via real home appraisal (eg. like new roof & siding so no more work for a good 20 plus year, updated kitchen, new deck, new carpet, new central air, new paint all done by seller) is not going to have that investment edge over that renter????

Than again, one may need to stay renting & not buying so one can really really learn what kind/ type of home to buy (learn the good home & can "know" that home as an inspector does, inside out; or be like my FIL, build a couple homes yourself so you actually know how things work etc.) so a home really is / become "that investment" you seek!

Homework people... its all about doing them.
No knowledge, cannot be wise = get burn & deserve getting burn.

Note: Notice more and more desperate LL are suing renters for their deposits / back rents & stuff (there is that rental thread in real estate is there not??? Good reads.)???
Works both ways that "fixing the moneypits"... especially if one can draft out a darn good lease to that desperate renter.

[GoCUBS1]

There are some misconceptions about the type of people who rent homes. I own 20+ successful investment/rental properties (for 15+years). Yet I rent my primary residence even though I can afford to buy.

I have never considered my primary residence an investment - it is a lifestyle choice. I rent a single family home in the best school districts, with the best amenities for my family. I am able to raise my family in the best environment possible and have the flexibility to easily move as necessary for school, business, lifestyle, etc. I rent because of the type of freedom and access it affords us. My other real estate is targeted for investment purposes.