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Old 04-19-2016, 07:04 AM
 
Location: Wonderland
67,637 posts, read 60,168,407 times
Reputation: 100946

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Quote:
Originally Posted by Lowexpectations View Post
Your assumption is incorrect. 50% of Americans wouldn't benefit from itemizing. Only a third or so do itemize and that's not because 15-20% just decide not to do so even though it would benefit them
Over 50 percent of Americans make over $50k, and 20 percent of Americans make over $100k. If they are homeowners (which most are) they would probably benefit from itemizing. Over 60 percent of Americans own their own home.

And I already posted several articles regarding who would probably benefit more from itemizing and those articles stated that many people are not aware of the benefits of itemizing, or don't feel like they have the savvy to itemize or whatever.

What's your source for your assertion that my assertion?
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Old 04-19-2016, 07:43 AM
 
26,145 posts, read 21,352,787 times
Reputation: 22706
Quote:
Originally Posted by KathrynAragon View Post
Over 50 percent of Americans make over $50k, and 20 percent of Americans make over $100k. If they are homeowners (which most are) they would probably benefit from itemizing. Over 60 percent of Americans own their own home.

And I already posted several articles regarding who would probably benefit more from itemizing and those articles stated that many people are not aware of the benefits of itemizing, or don't feel like they have the savvy to itemize or whatever.

What's your source for your assertion that my assertion?


You are making assumptions about homeownership and ability to itemize. The facts show roughly a third of Americans itemize, those facts refute your opinion and assumptions about taxes. The facts don't support your many assumptions
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Old 04-19-2016, 08:06 AM
 
105,670 posts, read 107,628,943 times
Reputation: 79308
the data is all there .
36% of returns take the home mortgage interest deduction and 40% take real estate taxes .
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Old 04-19-2016, 08:21 AM
 
Location: In the outlet by the lightswitch
2,306 posts, read 1,688,893 times
Reputation: 4260
Why is it in these kinds of threads, people always talk about it as if you don't pay a mortgage you are free to invest "That money" elsewhere? You still need a place to live. What you have left over to invest is what you would have put down as a down payment and the difference between renting and a mortgage. And as time goes on an rent goes up with inflation, you lose that difference. The big advantage is any opportunity cost lost on a downpayment.

And why do they assume people who own still don't invest money? I max out my IRA, put 15% in my 401k, have other investments, and am a home owner. I actually have more invested in retirement savings and personal savings than I have equity in my home. I don't see my home as an investment for the most part, but it is... and it diversifies things for me. Where else can I save money and make what I've made? I put $80k as a down payment on my house 5 years ago. Three houses just like mine just sold in my neighborhood. The equity in my home now based off recent similar sales, $180k.

And why do so many people assume those costs owners pay like HOA dues, taxes, maintenance, etc are "free" for renters? Landlords aren't in it for charity. They are in it for profit. Renters pay that too, it's just rolled into one nice monthly payment. Sure a person will still be paying property taxes and maintenance on their home when the mortgage stops, but so does a renter (rolled into the rent of course).

And why do renters always leave out their hidden costs in these discussions? Like moving costs (I have a neighbor who is upset because they are being forced to move in the coming months. Their landlord sold the house and the new owner wants to live in it, not rent). And what about damage caused by moving? I was moved for work for a few years and every move, EVERY move, stuff was damaged and needed to be replaced. And the "insurance" never quite covered the cost. What about increased utilities? When I lived in an apartment, it was so poorly insulated that my electric bill (heating and cooling) was $150 a month. My house (which is a lot bigger), costs me on average $70 a month because the homeowners before me installed good quality insulation and windows.

It's true that owning isn't always right for everyone, there are some places in this country where renting makes the best financial sense. But let's not pretend the extreme opposite is true. Renting isn't right for everyone either. It all depends on where you live, your goals in life, your investment strategy, etc.
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Old 04-19-2016, 08:22 AM
 
Location: TN/NC
34,799 posts, read 30,852,651 times
Reputation: 47082
Quote:
Originally Posted by Linda_d View Post
Why are you comparing a 1 BR apartment with a 3BR house? Of course, your apartment is going to look "better" because you pay less rent for less space. If you want an honest comparison, compare a 3 BR house to a 3 BR house of approximately the same market value, one purchased and one rented.
It's really a bit of a stretch. The apples to apples comparisons are the only ones which make sense. People can be picky and make the evidence show whatever they want.
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Old 04-19-2016, 08:33 AM
 
18,475 posts, read 15,419,258 times
Reputation: 16116
Quote:
Originally Posted by TMBGBlueCanary View Post
Why is it in these kinds of threads, people always talk about it as if you don't pay a mortgage you are free to invest "That money" elsewhere? You still need a place to live. What you have left over to invest is what you would have put down as a down payment and the difference between renting and a mortgage. And as time goes on an rent goes up with inflation, you lose that difference. The big advantage is any opportunity cost lost on a downpayment.

And why do they assume people who own still don't invest money? I max out my IRA, put 15% in my 401k, have other investments, and am a home owner.
The renter would have those investments, PLUS extra, if and when their out of pocket payments were less than the owner's. Only the difference matters. The fact that the owner can have some investments is a red herring, because it is the DIFFERENCE that is relevant.

Quote:
Originally Posted by TMBGBlueCanary View Post
I actually have more invested in retirement savings and personal savings than I have equity in my home. I don't see my home as an investment for the most part, but it is... and it diversifies things for me. Where else can I save money and make what I've made? I put $80k as a down payment on my house 5 years ago. Three houses just like mine just sold in my neighborhood. The equity in my home now based off recent similar sales, $180k.

And why do so many people assume those costs owners pay like HOA dues, taxes, maintenance, etc are "free" for renters? Landlords aren't in it for charity. They are in it for profit. Renters pay that too, it's just rolled into one nice monthly payment.
Landlords charge what the market will bear. It does not matter if a landlord just had $30k in flood damage that insurance would not cover, if they raise the rent over market value by $200 the tenant will likely move out. The tenant is NOT paying for it!

Quote:
Originally Posted by TMBGBlueCanary View Post
Sure a person will still be paying property taxes and maintenance on their home when the mortgage stops, but so does a renter (rolled into the rent of course).

And why do renters always leave out their hidden costs in these discussions? Like moving costs (I have a neighbor who is upset because they are being forced to move in the coming months. Their landlord sold the house and the new owner wants to live in it, not rent).
Why do owners ignore the lost wages due to inability to relocate, or the added commuting costs of not being able to move closer to a new job, or the added costs of moving compared to a renter's move?

Quote:
Originally Posted by TMBGBlueCanary View Post

And what about damage caused by moving? I was moved for work for a few years and every move, EVERY move, stuff was damaged and needed to be replaced. And the "insurance" never quite covered the cost. What about increased utilities? When I lived in an apartment, it was so poorly insulated that my electric bill (heating and cooling) was $150 a month. My house (which is a lot bigger), costs me on average $70 a month because the homeowners before me installed good quality insulation and windows.

It's true that owning isn't always right for everyone, there are some places in this country where renting makes the best financial sense. But let's not pretend the extreme opposite is true. Renting isn't right for everyone either. It all depends on where you live, your goals in life, your investment strategy, etc.
Yes.
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Old 04-19-2016, 08:43 AM
 
4,369 posts, read 3,694,263 times
Reputation: 2479
Homeownership can outperform the sp 500 especially with rental income dividends https://en.m.wikipedia.org/wiki/San_Francisco_Peninsula
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Old 04-19-2016, 08:45 AM
 
Location: In the outlet by the lightswitch
2,306 posts, read 1,688,893 times
Reputation: 4260
Quote:
Originally Posted by ncole1 View Post
The renter would have those investments, PLUS extra, if and when their out of pocket payments were less than the owner's. Only the difference matters. The fact that the owner can have some investments is a red herring, because it is the DIFFERENCE that is relevant.



Landlords charge what the market will bear. It does not matter if a landlord just had $30k in flood damage that insurance would not cover, if they raise the rent over market value by $200 the tenant will likely move out. The tenant is NOT paying for it!



Why do owners ignore the lost wages due to inability to relocate, or the added commuting costs of not being able to move closer to a new job, or the added costs of moving compared to a renter's move?



Yes.
That's why it all depends on where you live. I written about this before. The house next door to mine is a rental, I own. My mortgage (including taxes and insurance which is paid though escrow) is $1800 a month. The house next door rents for $2500 a month. It goes up each time someone moves out and a new person moves in (I know, because I a nosy and I check). When I rented it kept going up and up every 6 months months.

So I have more money to invest now. If I stayed where I was renting, I'd be paying more now than my $1800 a month mortgage. And part of my mortgage is an investment too, so there is that. Maybe it's not the best investment out there, but it beats a lot of other options and I am not about to put everything (all my eggs) in the stock market basket.

And rentals are hard to find in my area. So renting here costs more than owning. The problem for most people is houses are so expensive that they can't save the down payment and we have a large military community too that move a lot. So renting is their best option.

If I need to move, I can rent my house and make a tidy profit each month (heck, I would rent it cheap and still be ahead based on the other houses and what they rent for on my street). I don't, "have" to sell just because I want to move and I am not stuck either. I just become a landlord. But if I wanted to, I don't think it would be an issue. The three houses that just sold on my street, all where on the market less than a month. But that's specific to my area, and I get that.

The renters on my street pay the same commuting costs I do. So I am not sure what that would be an issue. It's not like they get a free ride to work.

Again, I say it depends on a lot of factors. Renting might be the right option for some, but I get really sick and tired of this idea that renting is always the better option. It's just as annoying as those who will tell renters that they are throwing their money away and that buying is always the better option. The truth is in the middle and is very dependent on a lot of factors. It's not simple.

EDIT: Had to update, I googled it. The house next to min rents for exactly $2595 per month.
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Old 04-19-2016, 08:50 AM
 
105,670 posts, read 107,628,943 times
Reputation: 79308
if your house was paid off how much money do you have tied up in the house that you can't invest elsewhere vs your neighbor who rents but has that money liquid ?


that is our story , if i buy again the dough i give up on what would be spent and tied up in the house is greater then the savings i would see buying .

i can save 6k a year buying but i give up 12k on the money i would now tie up . being retired cash flow is a concern .

there is more to a comparison then it cost me x to own and if i rented it cost me y so owning is cheaper .

time is your greatest resource growing money so the fact you have extra money to invest 30 years down the road after a mortgage is paid is not the same as having liquidity 30 years earlier .

part of the equation is the resources you have to have choices .

but today 43% of home sales are all cash deals so a lot of folks have that option of buying and possibly cutting costs or renting and possibly generating higher returns

Last edited by mathjak107; 04-19-2016 at 09:00 AM..
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Old 04-19-2016, 08:55 AM
 
2,189 posts, read 3,298,005 times
Reputation: 1637
Quote:
Originally Posted by TMBGBlueCanary View Post
That's why it all depends on where you live. I written about this before. The house next door to mine is a rental, I own. My mortgage (including taxes and insurance which is paid though escrow) is $1800 a month. The house next door rents for $2500 a month. It goes up each time someone moves out and a new person moves in (I know, because I a nosy and I check). When I rented it kept going up and up every 6 months months.

So I have more money to invest now. If I stayed where I was renting, I'd be paying more now than my $1800 a month mortgage.
The thing is most people invest a significant chunk of money to have a reasonable mortgage. How much equity is in your house for the payment to be $1,800? In other words if someone wanted to live on your street they could rent a house for $2,500 with very little cash outlay(and no maintenance costs) or they could buy and have an $1,800 mortgage with a down payment of ______. I imagine it's a big number. So you have a cheaper house payment and more money to invest but probably made a huge cash outlay the renter didn't, which they can invest. There are a lot of moving parts in the calculation which I think people who think one way is always right don't get.

But you're right it varies by situation, and mostly timeframe. If someone is staying in their house for 20 years buying will almost always win. The thing is people move a lot. And every time you move you reset your mortgage to where it's mostly interest(not principal) for the first half of the mortgage so you're paying it down very slowly.
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