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Thread summary:

Home purchase not the investment once thought, market bubble, location importance, rental income, property flipping, property taxes, fixed income rental options and home buying

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Old 04-13-2007, 05:31 PM
192 posts, read 798,133 times
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Originally Posted by hiknapster View Post
Do I have an emotional need to own my own home? More than you can possibly imagine. I'm not looking to get in over my head. Just have a tiny little house with a tiny amount of land to call my own ..
I agree and think that goes to the heart of the matter. There is a huge difference in how one feels about a rental (paying money to live in/on something owned by someone else) versus an owned home.

Also, an owned home provides equity. You can't borrow money (should you ever need to) on your rented house or apartment!

As far as property taxes go, well yes of course they must be paid but at least they are still deductible! A tenant can't deduct his/her rent from income taxes. My property taxes, horrendous as they are, nevertheless allow me to pay either very little or no Federal taxes on my yearly income because they are twice the amount of the standard deduction for my filing status.
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Old 04-13-2007, 08:30 PM
Location: a primitive state
9,875 posts, read 20,157,792 times
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Hiknapster, 45 is not that old and I know you will be able to do it. Just keep moving in that direction.
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Old 04-13-2007, 08:43 PM
Location: Vero Beach, Fl
2,949 posts, read 12,178,123 times
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Similar articles have been printed over the years. We were conditioned that owning our own home was stability, having made it, and all those things. Plus the idea was to purchase while we were young so that by retirement age we wouldn't have a mortgage.

Economics have changed home ownership making it far from reach or if we are able to reach it, we find ourselves owning a white elephant that costs more to own than to rent and where renting becomes more economical - but not on all cases.

Unfortunately, we never considered that to own a home without a mortgage would cost just as much as having one, example Florida - without a mortgage our monthly payments for insurance and taxes exceed $1000 - this was not what we expected..

Last edited by jhlcomp; 04-13-2007 at 08:44 PM.. Reason: typo
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Old 04-13-2007, 10:37 PM
192 posts, read 798,133 times
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Originally Posted by jhlcomp View Post
Unfortunately, we never considered that to own a home without a mortgage would cost just as much as having one, example Florida - without a mortgage our monthly payments for insurance and taxes exceed $1000
Could you explain further? I don't see how your yearly outlay on the same home without a mortgage (in other words, you paid cash for it) would be more than if you added a mortgage payment (interest) to the mix. You would be paying the same amount to insure that house, and to the property taxing entity, in both instances.
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Old 04-13-2007, 11:44 PM
Location: Midwest
1,903 posts, read 7,281,789 times
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The Supreme Court says that the Feds can Kelo you anytime they want. Your home or business is not really yours ... but thanks for paying your taxes.
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Old 04-14-2007, 01:26 AM
Location: here at the the present time, but on my way to heaven to meet my Criator
45 posts, read 178,051 times
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Wink is home ownership just emotional manipulation?

It May Be. Sure! It Is All About Money! Banks Make Money, Realtors,inspectors And You Name How Many More Can Make Money On One Single Purchase, From Contractors All The Way Up To Lenders.
But For Many Buyers( I Am One Of Them) It Is Not All About Profit. Off Course I Want The House I'm About To Buy To Go Up In Value, But That Is The Last Of My Worries.1- I Want A Place To Live That I Call My Castle. It Does Not Have To Be Fency, But ,again But,it Is Mine And I Can Do Whatever I Want, At Least On The Interior.change Wall Colors, Carpet, Make Curtains Without Having To Worry If They Are Going To Be The Right Size In My Next Place,otherwise It Is Lost Money,area Rugs,furniture Size, Etc.
My Friend In Ny Is A Very Good Exemple Of The Not So Good Renting Situation.she Was Renting This Place For Nearly 14 Years,there Her Child Was Born And Lived Since Birth Until The Day They Had To Move Out . The Place Was Sold And She Could Not Afford To
Buy It.anyone In Ny Can Tell That If You Rented A Place 14 Years Ago,you Probably Would Not Be Able (money) To Rent About The Same Again 14 Years Later. Result: She Had To Move To A Much Smaller Place, Much More Expensive,away From The Subway And Everything Else Was For The Worse. She Pays A Lot More And Gets A Lot Less.her Child Had To Change School, They Do Not Know Any Of Their Neighbors,she Does Not Like The Place And There Was Nothing She Could Do About Her Situation. She Did Not Want To Move, She Had To, Also Most Of Her Things Do Not Fit In The New Place.
The Street She Loved So Much For So Long,the Street She Saw The Neighbor',s Kids Grow Up And Knew Them By Their Names , Even All Christmas Decoration Was Familiar Every Year,the Same Flowers In The Same Houses Spring After Spring And The List Goes On.
Some People Do Not Like Routines And Moving Means Nothing To Them, Some Of Us Love Familiar Things,where We Feel Part Of The Whole.
It Was Simply Devastating For Her, It Would Be For Me Too And For Many Out There.
2 Good Enough Reasons To Buy?
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Old 04-14-2007, 10:07 AM
Location: Tucson, AZ
1,697 posts, read 3,123,834 times
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Originally Posted by christina0001 View Post
I don't think real estate is any way to get rich. But having to pay rent in your retirement years can be a huge burden. I think it's financially wise to buy a home while you are still relatively young, and have it completely paid off before it's time to retire.
Provided that you live in an area where you aren't going to get drowned by property taxes, as you can appreciate being here in NJ. Nothing like paying off your mortgage and looking forward to retirement only to realize that your taxes keep going up at a rate that outstrips your fixed income.
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Old 04-14-2007, 10:44 AM
Location: Missouri
6,047 posts, read 21,650,017 times
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Amen! I don't know how anyone retires in NJ. Taxes here and elsewhere can be just as high as rent, plus you have the added expense of maintanence. Having a house that is paid off is still beneficial IMO, because you can sell it and pay cash in full for a house in a more affordable area. Ideally I'd love to have a house paid in full by the time I'm in my 50s, so I can save that much more money every month for retirement.
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Old 04-14-2007, 11:43 AM
1,229 posts, read 3,153,888 times
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Buy the most expensive land you can get your hands onto and then plop down a manufacutred home if you rather not worry bout the house, you can always sell the land and not worry bout maintaing a home or its value. Yes, real estate value is in the land.

I am having serious reservations of even buying a home after I sell mine this spring. Cause of homes being so rare that are under 200k, I will be able to sell in one year, and not lose any money! Real estate agents all tell me that I am lucky my home is under 200 where its located now and in the market, I am so happy too bout this...and I seriously doubt we will buy again here, it would have to be a really good deal too, if we did.
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Old 04-15-2007, 11:37 AM
3,020 posts, read 23,618,531 times
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Default Nope, not if you did it right

To the original question "Is home ownership really just emotional manipulation?"

No but you had to do it like in the old days. As also pointed out the entire situation changed where local governments totally screw the pooch and make what should be your castle, into your nightmare.

If you originally bought your house with say 25% or less of your monthly income and made all the payments or better yet paid it off early and totally own it outright, then you should have a super situation. The least cost to live in a particular area. The most flexibility, the most security, the most peace of mind.

It is not what happened in far to many cases. Peeps became "House Poor" even with super good practices. That nasty old government went wild and used them as a bottomless pit paycheck and they did not exercise proper control at the ballot box.

There were lots of ways to get it wrong. Believing it was an investment that could not fail, paying all the outstretched hands at whatever rates were asked, paying too much to begin, playing what turned into a rigged game in far too many cases.

Somewhere along the line, they forgot the prime reason was to have a place to live totally under their control. This idea of house value and its continuous escalation is a killer. Increased value just drives up normal yearly costs until you sell there is zero benefit. Trying to treat the house value like an ATM was a game with only one possible outcome.

If you bought into any of those strange theories, you probably got your head handed to you. If you bought and tried to play by the old rules, you probably did ok, even in today's market. The last people in the World to listen too were the brokers and folks running the game, such as banks and all the rest. They could have cared less, their interests were being served in the short term, the longer term risk was being held by the suckers who believed the fairy tales being spun. If the average Joe had not been willing to play the game, it could not have happened.

I did it the old fashioned way. Sold the over priced pig just right and bought the next in a total downsized mode for cash. Difference looks like real money to me.
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