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I just bought and don't rent any longer…. I have a home maintenance fund which I put $200 a month in for surprises, I pay 100 bucks a month to have someone cut my small lawn and I don't wait for any maintenance crews….(?) I'm not a pool fan so that's cool with me, and I pay $10 a month to go to Edge fitness, which has a better gym than my old apartment complex gym (waaay better). With the common fees I was paying, what I pay for maintenance and my surprise fund is exactly the same. My mortgage in Orange is only $63 more than what my rent was, and I get a nice private yard, my own driveway, and don't have to listen to anyone else around me. Worth it to me...
Oh yeah and the best part is after 30 years of paying this, I'll have $300k in equity… if I continued to rent, I'd have nada...
But your last sentence is where the misconception is. For many people, yes you're right. If people have money, they spend it and have nothing to show for it. I save/invest it. I could rent for 30 years and have at least $300K in equity that I can tap into anytime I want. 30 years of $5,000 a year in taxes, $500 in insurance, and $200 a month in maintenance (All very conservative!) is $237K right there off the top. Are you still coming out ahead?
I just hear horror stories from my co-workers about home ownership. $1,500 to cut a few trees. Ice dams. New boiler. $19,000 for new siding. $200 a month is wise to set aside, but in reality, a big bill can come at any time.
But your last sentence is where the misconception is. For many people, yes you're right. If people have money, they spend it and have nothing to show for it. I save/invest it. I could rent for 30 years and have at least $300K in equity that I can tap into anytime I want. 30 years of $5,000 a year in taxes, $500 in insurance, and $200 a month in maintenance (All very conservative!) is $237K right there off the top. Are you still coming out ahead?
I just hear horror stories from my co-workers about home ownership. $1,500 to cut a few trees. Ice dams. New boiler. $19,000 for new siding. $200 a month is wise to set aside, but in reality, a big bill can come at any time.
Yeah…. my payment I gave you included property taxes and insurance… given I paid a higher than normal rent because it was in a complex with a pool/gym, but for a mere extra 50 bucks a month, I get a TON more…..
It's all about picking the right house…. for me, I searched until I found it…. New roof, new siding, new boiler, new(er) furnace, the interior needed updating but its definitely livable and I am pretty handy so I can add little things as time goes on. And yeah a big bill can come at any time but that's why you keep your 200 bucks a month in an account that only grows. Right now I have about $4500 in that account (mostly because I put a lot more in there than my 200 minimum) so if anything happens, I'm good… and if it's a larger bill than I expect (like a major incident or something), thats what my homeowners insurance is for…
I think a lot of people who don't own a house think it's a lot more expensive than it actually is to own. You should check it out and might be surprised.
Also with real estate taxes, where I bought has HIGH taxes. But if you can afford a town with a mil rate under 25 (Shelton, Oxford, lower FFC), your taxes will be a lot less….
I just bought and don't rent any longer…. I have a home maintenance fund which I put $200 a month in for surprises, I pay 100 bucks a month to have someone cut my small lawn and I don't wait for any maintenance crews….(?) I'm not a pool fan so that's cool with me, and I pay $10 a month to go to Edge fitness, which has a better gym than my old apartment complex gym (waaay better). With the common fees I was paying, what I pay for maintenance and my surprise fund is exactly the same. My mortgage in Orange is only $63 more than what my rent was, and I get a nice private yard, my own driveway, and don't have to listen to anyone else around me. Worth it to me...
Oh yeah and the best part is after 30 years of paying this, I'll have $300k in equity… if I continued to rent, I'd have nada...
X1000. We bought our first house right after we got married, almost 20 years ago, and the real estate market in northern Fairfield county was soft then too (in 1996/1997 it had still not fully recovered, or maybe it was just at the cusp of leveling off from the real estate boom/bust of the late 1980s - early 1990s). We paid $170K for a small colonial on a main road, with not much of a backyard. And we lived in that house for the next decade and two kids later. We definitely lucked out with the market when we decided we had grown out of that house, and that it was time to go. We sold at the height of the next boom for $430K, and walked away with a nice chunk of change to add to the down payment on our current home, which we would not have had if years ago we decided we wanted to be renters instead of homeowners. Fwiw, even after the horrible real estate bust, our little old house just sold again for $325k. So while it's still way below what we sold for, had we stayed until now, we would be ahead by $155k over what we paid, plus at this point 20 years later, we would have pretty much paid down our mortgage completely. So yup, we would have exactly the ~ $300k equity you mention above
Yeah…. my payment I gave you included property taxes and insurance… given I paid a higher than normal rent because it was in a complex with a pool/gym, but for a mere extra 50 bucks a month, I get a TON more…..
It's all about picking the right house…. for me, I searched until I found it…. New roof, new siding, new boiler, new(er) furnace, the interior needed updating but its definitely livable and I am pretty handy so I can add little things as time goes on. And yeah a big bill can come at any time but that's why you keep your 200 bucks a month in an account that only grows. Right now I have about $4500 in that account (mostly because I put a lot more in there than my 200 minimum) so if anything happens, I'm good… and if it's a larger bill than I expect (like a major incident or something), thats what my homeowners insurance is for…
I think a lot of people who don't own a house think it's a lot more expensive than it actually is to own. You should check it out and might be surprised.
Also with real estate taxes, where I bought has HIGH taxes. But if you can afford a town with a mil rate under 25 (Shelton, Oxford, lower FFC), your taxes will be a lot less….
My parents tax bill in Oxford is now north of 7K and has gone up 50% in 15 years. It's a much larger house than they need though now that the kids are gone.
To each their own. I'm glad you found the perfect house, and yes, there are non-monetary benefits to living in a house that you described. I have checked it out with my partner and I know how difficult it is to find the PERFECT house at the right price. I will probably end up buying at some point, just super hesitant about it with the current economic climate in this area.
X1000. We bought our first house right after we got married, almost 20 years ago, and the real estate market in northern Fairfield county was soft then too (in 1996/1997 it had still not fully recovered, or maybe it was just at the cusp of leveling off from the real estate boom/bust of the late 1980s - early 1990s). We paid $170K for a small colonial on a main road, with not much of a backyard. And we lived in that house for the next decade and two kids later. We definitely lucked out with the market when we decided we had grown out of that house, and that it was time to go. We sold at the height of the next boom for $430K, and walked away with a nice chunk of change to add to the down payment on our current home, which we would not have had if years ago we decided we wanted to be renters instead of homeowners. Fwiw, even after the horrible real estate bust, our little old house just sold again for $325k. So while it's still way below what we sold for, had we stayed until now, we would be ahead by $155k over what we paid, plus at this point 20 years later, we would have pretty much paid down our mortgage completely. So yup, we would have exactly the ~ $300k equity you mention above
This is a "your experience may vary" type of story, but I'm glad the timing worked out for you.
Yeah, this is keeping me from buying. Realistically, what will be a catalyst to reinvigorate home prices in metro Hartford? You can talk all you want about the quality of life in CT, and it's true. Great healthcare, great education, great parks and recreation. However, people are fed up, people are leaving, jobs are leaving, taxes are rising.
If I were to buy a $200,000 home, pay (conservatively) $4,000 a year in taxes, mortgage interest, PMI, maintenance costs, closing costs, etc. - only to sell my home for the same amount 10 years from now (as what has essentially happened from 2004-2015) - Why in the world would I buy in?
If you add up all those costs and then deduct the amount you get back when sold, you will see you are likely ahead. Now add up your rent receipts and you will see you have nothing for it but a pile of paper. The nice part is that you are living in a place you own and can do what you want with it. If you want to improve it, that is your choice, not some landlord who likely does not care about anything more than getting a check each month. Interest rates are low but not sure for how long so putting off buying is just an excuse some people use for not being disciplined enough to save for the downpayment. Again this is your choice but as rents keep climbing higher and higher, you will see owning is less expensive in the long run. Jay
Yes, definitely my experience and I acknowledge that we certainly lucked out when we decided to sell. But another thing renters don't fully grasp: if you buy a home when you're young, and you (hopefully) can afford the mortgage payment -- this is where so many people get into trouble! - then you have to realize that your salary in 10 years down the road is going to increase, but your mortgage payment will not. If you're a renter, your're always going to be paying market rate. The mortgage (tax included) on our first house when we sold was $1,100. I can guarantee you you could not find a 4 bedroom house, even on a main road, to rent in my town in 2006 for 1,100. Even today, a house like that would rent for about $2,000.
My parents tax bill in Oxford is now north of 7K and has gone up 50% in 15 years. It's a much larger house than they need though now that the kids are gone.
To each their own. I'm glad you found the perfect house, and yes, there are non-monetary benefits to living in a house that you described. I have checked it out with my partner and I know how difficult it is to find the PERFECT house at the right price. I will probably end up buying at some point, just super hesitant about it with the current economic climate in this area.
$7k tax bill must be pretty big house. A great family friend just bought in Oxford…1500 square foot ranch for the mid 300s, and they only pay 4200…
Anyway yeah it is difficult because when the perfect house hits the market you go into a bidding war. Thats what happened with me and we ended up OVER asking price… in the first 2 days on the market they had 3 offers, lol…
Good luck… I used to never want to own but now I could never go back to renting...
Because people have to stop looking at houses as an investment…rather a place to live. 50 years ago people bought houses not thinking "what can I get for this in 5 years"… we need to get back to that. Buy a house in a good area and forget what it will be worth in 10 years. Buy it to stay in it…
or you can waste your money paying someone else's mortgage i.e. renting.
So true. I wish younger people would stop thinking short-term. This is a long term deal, not just for 10 years. I think of it as a merry-go-round. Once you step on it (home buying) you will continue to receive benefits from it. Say you sell in 10 years, you likely will buy another home and the price of that home will likely be higher but you already have equity from your first home that goes towards your next home. Since home prices tend to be relative, you are that much further ahead. This keeps going, likely until you die. Again, this is long-term, a term people today tend to forget. Jay
Maybe it was mentioned earlier, but a house provides tax deductions if you itemize. I've itemized every year since owning a house. You can even put your property taxes on there.
IMO one of the biggest advantages of renting is you can up and leave any time you want. Get a job offer in California ? Sure I can be there next month. Not so easy to do when you have sell a house.
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