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How many years you think one should live in the same home continuously to break even considering selling/buying costs as well.
That is entirely dependent on the market. In California, circa 1998, it took just a few years (sometimes less), but currently there are places in the upper midwest that may take decades to recoup one's money.
I bought a 1,200 sq ft "starter" home 32 years ago and liked it so much that I never moved up to a larger house. It's been paid off for many years and I've spent some $$$ remodeling (new windows, new flooring, large patio, remodeled kitchen and baths, etc -- but I used a great contractor and got a great deal with him) and, of course, had two new roofs and two HVAC systems over the years.
1. Mortgage Payments: Currently 0. House Cost $40,000 32 years ago. Interest was minimal because I paid the loan off within 2 years.
2. Insurance: $80/month
3. Property Tax: $30/month (using the Homeowner's Exemption and the Over-65 Exemption)
4. Maintenance Cost: Utilities $140/month. HOA: $15/month.
5. Lawn/Garden maintenance cost: $25/month
6. Others: Currently 0. Repairs, Remodeling, Roofs and HVAC over the past 32 years: @ $55,000.
Other houses exactly like mine are renting for $1,200+/month. But I've never rented and hope I never have to. I like owning, even if it were to cost more overall than renting.
Did I miss any other costs?
How much you are paying monthly for the above? How big is your home interms of Sq Ft, No of Bed/Bath etc.,
With all these costs do you think would it be better off Renting...
How many years you think one should live in the same home continuously to break even considering selling/buying costs as well
Thanks!
You may never break even. But you gotta live somewhere. In fact, I don't ever expect to 'break even'...I mean, think about it...just in interest, you have to make a HUGE profit on your house.
Mortgage - $2500 (low interest rate makes it - 2.8%)
Insurance - $250 a month (it's bundled with car insurance, but I still know what it is)
Property tax - $1000 (we pay all at once at the end of the year, but divided by 12...)
Maintenance - that's a tough question...like what does that include? I mean, for the most part, repairs are sporadic and not that much. But hell, I just had a $10,000 electrical job done. That won't happen often, though, and now I have a great box and surge protectors, I'm up to code with grounding, etc. The house is 25 years old - it was going to happen. It has a new roof and 3 new AC units, so I don't expect to have to deal with those for a long time. I'll tell you one thing - I buy the home warranty. It's paid for itself every year (first year with the Subzero and the next year with the Viking range).
Our pool guy is $150 and our yard guy is $90-180 a month (depending on summer vs winter). Maids are about $400 a month.
HOA is $500 a year.
4677 sq ft, 4 bed, 5 bath, study, movie theater (now kid's playroom), 3 car garage, 2 driveways on 1/2 acre.
Why not pay cash for a home and not worry about monthly payments? Avoid the interest.
You usually miss the appreciation of the home while you are "saving" and your opportunity cost is the rent you are paying while "saving" to pay cash?
Wouldn't rent be considered your "interest" while saving for your home?
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