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Come on.. some one has to have a great reason to buy.. We know investment is a lousy reason..
Not everyone should buy a house. But for those who wish to, financial reasons are oftentimes not the prime motivation.
For me, however, financial reasons have always been a prime consideration in owning a house. After college, I never paid a penny in rent. I saved thousands of dollars by not paying for someone else's house or apartment building, and I never experienced the uncertainty of eviction on a whim. Sure, there's pride of ownership--and more freedom to do as you please--but the bottom line is it has saved me a ton of money. In that sense alone, home ownership has been a great investment (and that's not even taking into account the value of appreciation).
But there's no good reason to buy a house above your means, or to put yourself so deeply in debt that you can't get out. With discipline, most people should be able to pay off a house within 10-15 years, if not much sooner.
... there's no good reason to buy a house above your means, or to put yourself so deeply in debt that you can't get out. With discipline, most people should be able to pay off a house within 10-15 years, if not much sooner.
Absolutely true. Mortgagors often don't want big down payments (like 50%) but they'll make 'em.
It's interesting how home buying is now "not an investment", but until 5-6 years ago, it was considered the best investment and often the largest investment most people ever made. Now, because of a stale economy like we haven't seen in 80 years, it's suddenly not an investment.
How many people have bought a home, paid it off in 20 years, and NOT realized a major profit?
My first house (1972) paid $26,000. Sold it after 3 years for $52,000.
Second house (1975) paid $69,500. Ex-wife sold it in 2011 for $280,000
Current house (bought as a rental in 1981) for $87,000. Appraisal 2 years ago was $240,000.
Normally, houses do appreciate in value, just as the stock market does. There will be ups and downs with both, but held over time, both go up in value, usually to several times the original purchase price before the mortgage is paid.
As for the person who said he/she wouldn't buy unless interest rates fall below 5%, that's a bad decision. If rates fall, refinance. If they increase, you're locked in at the lower rate. But don't gamble on an adjustable rate loan.
I think, in most places, now is a great time to buy a home. Interest rates are still very, very low. When I was selling homes, interest rates were 15-17%! I still managed to sell 20-25 homes per year. Most of those homes sold for $70-80K and payments were around $1500/month. As interest rates dropped, they were refinanced. Today, 30 years later, those homes are selling for $250K.
That's right, home prices go up but homeowners spend more than their gain in mortgage interest, property tax, property insurance, realtor commissions, repairs and maintainace. Renters don't. It's almost the same financially, unless your home values appreciate miraculously higher.
That's right, home prices go up but homeowners spend more than their gain in mortgage interest, property tax, property insurance, realtor commissions, repairs and maintainace. Renters don't. It's almost the same financially, unless your home values appreciate miraculously higher.
Now you're getting silly. Renters pay for all those expenses and more--they're just paying for someone else's expenses through their rent. I should know. I used to be a landlord.
Now you're getting silly. Renters pay for all those expenses and more--they're just paying for someone else's expenses through their rent. I should know. I used to be a landlord.
It depends upon how high rents are in an area compared to price of owning. We can't apply it as a universal law.
It depends upon how high rents are in an area compared to price of owning. We can't apply it as a universal law.
Not so. Regardless of whether rents are high or low, if a landlord doesn't cover all of his expenses through rental payments, he will soon be out of business.
How many years of experience do you have as a landlord?
Not so. Regardless of whether rents are high or low, if a landlord doesn't cover all of his expenses through rental payments, he will soon be out of business.
How many years of experience do you have as a landlord?
This is the reason that makes renting a better option in some cases and owning in other. I've been a landlord since 50+ years.
Thats admirable. However, if you took a mortgage you may not have paid "rent" but you did pay a cost.
The home that you bought in when you were young must be extremely outdated unless you have rehabbed it
And too me that ability, the skills to re-hab a house, give a huge advantage to buying a home over renting. No rehab skills? You are at a disadvantage as a homeowner in my opinion. I ain't got them skills, nor do I like lawn work.
I hire folks to do it which is an incremental cost. Older people often say to heck with that part of housing, but it's not clear if they care about ownership as much as younger folk.
Simple - what will you have 20 or 30 years down the road if you just rent all your life? I attribute more than 80% of our net worth to real estate, that is either paid for or almost paid for. That investment will afford us a comfortable retirement. And we did it with funds little or no more than we would have been paying the last 30 years, in rent. Our current home is almost paid for, and our total house payment including taxes and insurance, is about half what it would rent for. Is your rent tax deductible like mortgage interest is?
Rent vs Buy depends on many factors. It's not a simple answer that apply to all. Everyone situation is different. There are some market that it makes absolutely zero sense to buy.
Now with the example of a $500K home renting for $2800/month. If the number work out so favorable for the renter? Why would an owner want to rent it out? If they do, there would be a very short supply of those rental. From an investment perspective, why would someone sink $500K into home just to rent it out for $2800/month?
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