Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So you think all landlords make a profit? That's a good one, if you actually analyze the costs that go into it versus the revenue that is a fallacy.
Yeah, but the costs that go into it are tax deductible.
Quote:
On owning your own home I still maintain it is a lifestyle choice,
And nobody disputes that.. People have different stages in their lives where "person A" might want to move in a couple of years, "while person B" has a stable job in a town they love and wants to stay put.. Different strokes.
Then you haven't spoke with many realtors. It isn't common sense and everyone doesn't "know it". Were you asleep for the last housing crash?
Where they were asleep was during the bubble, when everybody thought the price of real estate would always go up. Instead of buying a home they could pay for, they bought much more than they needed on spec, then mined their fictitious paper "equity" to live large and pay for things they couldn't afford. The people who lost their homes couldn't afford them in the first place. Nobody was upside down on their original purchase price for more than a couple of years.
There are always people with no idea how to manage assets. They sold their stocks at the bottom. They bailed on their house at the bottom. They locked in their losses in a panic. If they bought what they could afford and invested because they really had the money, then just rode it out, they have done very well indeed.
If your situation isn't a financially stable one, don't buy a house.
You shouldn't be renting if you're not financially stable either. I think it comes down to two simple factors: Does OP want to own a house and can OP afford it? Forget resale value. Forget how long OP will live there. Forget rent amounts vs. mortgage amounts. But don't buy making assumptions that:
A. My parents/friends will be proud of me
B. I'll save money in the long run
C. I'll sell it for a profit later
D. My future significant other will fall in love with me because I own a home instead of rent one. Etc. . .
If you buy the house, do so because you want it. Don't buy it for anyone else, including any future homeowners.
So you think all landlords make a profit? That's a good one, if you actually analyze the costs that go into it versus the revenue that is a fallacy.
If you can't make a profit while being a LL then there is something wrong with you and your business plan as a LL. You either paid too much for the property or don't understand the local market.
Where they were asleep was during the bubble, when everybody thought the price of real estate would always go up. Instead of buying a home they could pay for, they bought much more than they needed on spec, then mined their fictitious paper "equity" to live large and pay for things they couldn't afford. The people who lost their homes couldn't afford them in the first place. Nobody was upside down on their original purchase price for more than a couple of years.
There are always people with no idea how to manage assets. They sold their stocks at the bottom. They bailed on their house at the bottom. They locked in their losses in a panic. If they bought what they could afford and invested because they really had the money, then just rode it out, they have done very well indeed.
Even if my home was upside down in value it wouldn't matter to me because my mortgage is so low that it costs less than renting a one bedroom apartment.
Some people are still upside down because they bought at the height of the market and didn't do their homework, and got loans that they were not qualified for or spent money on upgrading the home instead of being happy with what you have, but even some of those have mortgage payments that are in line with what rental costs are in that area so they are not in that bad of a shape.
Why should it matter if a homeowner saves money owning over renting? People spend their money in far more frivolous ways: fancy clothes, fancy cars, fancy boats, gold digging boyfriends/girlfriends, whatever. Even if a person would save money renting, that's not a persuasive reason for them to rent, IMO. As many people have said, it's their money and if they can afford it, it's their choice on what to spend it on.
I do not know where the OP resides but in my area if you were to look to rent a single family home you might as well have a mortgage......the price point is essentially the same. That is what happened to me. I looked tomrent a house and ended up buying instead.
I rented a house when my daughter was growing up. It was expensive, but I needed to live in that town where my mother was there for her and the schools were good. I would have been able to make a mortgage payment, but I had no money to put down.
When she was 16 and I had gotten a couple of promotions, I looked at houses for sale in that town. I considered buying but at that point I knew I'd be taking on very high taxes (I live in NJ and this was Bergen County, one of the priciest/highest tax places in the nation) and she'd be going off to college in two years, so I chose to continue renting. Worked out. It was 2007, and I would have been way underwater in a couple of years, stuck as a divorced person in a town set up for families.
After she graduated, I moved to a cheaper part of the state that's got more of a diverse population and more things to do that aren't just family-oriented and bought a condo.
So sometimes buying is a matter of WHEN the time is right.
This scenario doesn't make any sense, if you don't own the home outright wouldn't you still have the money in some kind of account or are we assuming everyone would have blown it at a casino?
It is great that you have not lost any money, but a lot of people have, I don't see what is wrong sharing the other side of the coin with the original poster, buying a home is not a guarantee of any kind of return.
There's nothing wrong with sharing both sides and presenting both options. As I stated before, owning a home isn't for everyone, but it isn't wise to immediately assume that owning a home is a money pit. That depends on how you buy it and what kind of decisions you make. There are ways to minimize risk, and that is what you have to shoot for. ANY investment comes with risk, but if done right the rewards can be greater than the risk.
Not everyone can dip into a bank account and pull out $15-$20k out if an emergency pops up. All things being equal, let's say you have to have a surgery that insurance only covers a small portion of..... and you have $40k of equity built into your home.
If you have paid off your home (or paid down a large portion of it where you have equity built up, or purchased low enough that it came with equity) you can pull that equity out to cover the expense. You will have to pay that money back of course over time, but you do have the option to sell the home at market value and pay off the loan you took against the home at closing.
If you are renting and you don't have a large nest egg built up in savings, and no market investments where do you plan to get the money? You can potentially take out a signature loan at your bank at a higher interest rate but there is no way to pay the loan off other than making monthly payments for possibly years until it is paid back. There isn't an option to pay it off early unless you fall into a small fortune.
Not sure what part doesn't make sense in this I guess.
I guess I'll call my debt free landlord friend that owns 60 rental houses and 10 apartment complexes and ask him where he got the money to pay for his lake house, his motorcycles, his boats, wave runners, camper trailer RZR, his home in historic downtown, etc.....
Apparently he didn't get the memo that landlords don't always make a profit. He seems to be doing very well with it.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.