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Old 08-22-2013, 09:28 AM
 
55 posts, read 65,097 times
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May be he saved and invested money that his owner friends spent on home ownership expenses. There are other ways of investment.
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Old 08-22-2013, 09:34 AM
 
3,029 posts, read 6,821,893 times
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Quote:
Originally Posted by Maple Shade View Post
May be he saved and invested money that his owner friends spent on home ownership expenses. There are other ways of investment.
True, but market rent will ideally include the costs of home ownership expenses such as repairs and replacement of short-lived components of the property. A landlord doesn't own or buy investment property to lose money every month.
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Old 08-22-2013, 09:37 AM
 
6,341 posts, read 7,113,638 times
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Quote:
Originally Posted by ridmap View Post
Thats admirable. However, if you took a mortgage you may not have paid "rent" but you did pay a cost.
Well, I never had a mortgage either, so I saved doubly. I bought a fixer-upper and did all of the repairs myself, paying cash along the way. Granted, that's not for everyone, but it's a great strategy if someone can manage it. Besides, a lot of rehab work doesn't require a great amount of skill or extraordinary physical effort; although some clearly does. It's not something that I would wish to tackle now, but it enabled me to save enough to subsequently buy other houses for cash--ones which didn't need much in the way of repairs.

EDIT: I have taken out mortgages for investment properties...but in those cases the tenants paid for the mortgage payments.

Last edited by jackmichigan; 08-22-2013 at 09:57 AM..
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Old 08-22-2013, 09:39 AM
 
6,341 posts, read 7,113,638 times
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Quote:
Originally Posted by GripeWater View Post
This is the reason that makes renting a better option in some cases and owning in other.
I see that you like to juggle apples and oranges.
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Old 08-22-2013, 09:41 AM
 
2,341 posts, read 5,972,649 times
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What about all the buyers who are upside down??A home is to live in not an investment,also a lot of work.
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Old 08-22-2013, 10:40 AM
 
Location: St. Louis, MO
758 posts, read 1,295,687 times
Reputation: 936
Quote:
Originally Posted by sweetness8t5 View Post
Where I live it cost less to buy than rent... especially if you got in when interest rates were super low.

Even at a 5.5% interest rate my mortgage payment, taxes and ins would still less than my apartment.
Plus I can do whatever I want to the place and have a yard for my dog, and a garage.

Like a previous person posted.. different strokes for different folks.

Me too! We bought our house. Our neighbors recently moved (and since they were asking for the moon to sell their house) and decided to rent it out to friends instead. Nearly identical houses. Same floor plan, same size. They have hardwood floors and an occasionally leaky basement. We have carpet, a slightly bigger lot and a professionally fixed basement. The cost to rent? 1500/month. Our mortgage? 800/month for a 30 year. (though when we refinanced we dropped our loan time and pay around 1100/mo...still less than 1500)
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Old 08-22-2013, 01:45 PM
 
14 posts, read 14,269 times
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Quote:
Originally Posted by sj08054 View Post
why would someone sink $500K into home just to rent it out for $2800/month?

True, but millions of people are underwater still. These houses are in every large metro. I'm assuming the renter is the recipient of the favor of the large down payment the home owner made which will lower the payment he can charge on the full market.
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Old 08-22-2013, 02:22 PM
 
Location: North Beach, MD on the Chesapeake
31,409 posts, read 38,207,707 times
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Quote:
Originally Posted by ridmap View Post
True, but millions of people are underwater still. These houses are in every large metro. I'm assuming the renter is the recipient of the favor of the large down payment the home owner made which will lower the payment he can charge on the full market.
Don't assume that. Rents are market driven and most will have nothing to do with an owner's down payment.

When the bubble here was expanding prices were going up but rents stayed fairly stable. What that led to were people who bought rentals in a rising market who then discovered that the market rent didn't cover the mortgage payment.
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Old 08-22-2013, 05:00 PM
 
Location: The Old Dominion
774 posts, read 1,335,135 times
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Most such analyses ignore or downplay the substantial costs of taxes, insurance, and most especially maintenance. Those three together greatly outweigh mortgage costs for many. My house has cost about $40K to $60K per year in maintenance and upgrades alone--just to stay even with my local market. Houses need work--lots of it--and it's not cheap in terms of time or money. Granted you can buy a new house and get a few years without major costs, but new houses are built really cheaply for the most part.

Quote:
Originally Posted by jackmichigan View Post
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?
Quote:
Originally Posted by North Beach Person View Post
Don't assume that. Rents are market driven and most will have nothing to do with an owner's down payment.
That is exactly right. Landlords can lose their shirts buying too expensively. The lucky/successful ones are those who bought a couple of decades ago. Their costs in any case do not affect market rents which are--oddly enough--decided by the market.


Quote:
Originally Posted by marksmu View Post
If you build your home now, you should be future proofing everything. I am building now, and anywhere there is Audio Video equipment, or speakers, doorbells, alarms, security cameras, etc - all of that is going into orange low voltage conduit and being pulled to the attic. Makes it a very simple process to rewire and replace using all of today's or tomorrows newest toys/technology. Ive also got several places where I terminated conduit this way to the outside just in case something really cool that I dont even know about yet comes along that needs wiring to the outside.
The future is wireless
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Old 08-22-2013, 11:10 PM
 
1,914 posts, read 3,022,156 times
Reputation: 1084
Quote:
Originally Posted by Archguy View Post
Most such analyses ignore or downplay the substantial costs of taxes, insurance, and most especially maintenance. Those three together greatly outweigh mortgage costs for many. My house has cost about $40K to $60K per year in maintenance and upgrades alone--just to stay even with my local market. Houses need work--lots of it--and it's not cheap in terms of time or money. Granted you can buy a new house and get a few years without major costs, but new houses are built really cheaply for the most part.
I read your posts from the link you provided, and it sounds like you had no idea what you were getting in to from the get go.

The blame should not be put on "home ownership", it should be on you because you apparently had no clue what it would it would cost to fix your house up/maintain it - as a middle-aged first time (?) clueless homebuyer.

And I say all the above in the nicest way.
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