[aardogfsu]

Originally Posted by Trader Joe99

You sound like those Idiots from 2005-2007.
Let me burst your bubble again.
You are up $0 until you sell it and receive cash.

So I should sell the positive cash flowing machine and sit with cash against inflation? Put it in the stock market when the dow is 5% from it's all time high in this economy?

I've had stock winners too, first stock I ever bought, NGS, I saw go from 10 to 35 overnight. Nothing is guaranteed and I like to be able to sleep at night. Waking up to xx,xxx loses overnight when the dow drops 600 points isn't something I want to experience again, especially when my time is better spent running my business than on market research.

[Wardendresden]

Somewhere between Austid and Eureka. It's a pretty fair drive to anywhere big on 50--but, yeah, there is inexpensive housing in NV.

When we drove across there, I was worried about a breakdown. A tow truck would have had to pull us a hundred miles---if there were a tow truck available.

But, yep, housing was cheap when you could find one for sale.

[lvoc]

Originally Posted by Trader Joe99

Recovering????? Recovering where to overpriced homes of 2005-2007????
That is not recovering.....that is another housing bubble that is unsustainable?
The entire economy of ours is smoke and mirorrs.
More then half of Las Vegas residents are broke and you see housing price to go back to 2007 level?
Investors are already moving to other areas like Atlanta GA. Who is going to buy those overpriced homes?????

Uhh no. If you simply project the cost of housing between 1990 and 2000 to the present we are about 30% below that level. We are probably still 15 or 20% below replacement cost.

So we likely are on our way to returning to something like reasonable historical levels.

That is a very long way from 2007 pricing. There is no indication that we are headed for those levels. Maybe in 5 years we get back to 2003.

[djslakor]

To the person who claims renting is nothing more than putting money into a hole ...

Do you pay property taxes? Do they give that back?
Do you pay interest on your mortgage? Do you expect to get that back?
Do you pay insurance on your house? Do you expect to get that back?

I pay $450/mth to live in an all inclusive very nice master bedroom situation with my own private garage and entrance. Considering I use highspeed internet and utilities that would run me $200 at the minimum anywhere else, the real base rent is basically $250. I've rented entire homes before, and I'm 100% just as happy renting less space. It makes no difference for me as a single bachelor with simple needs.

Would that cover property tax, interest, and insurance if I owned a home? I doubt it. I don't particularly feel like I'm losing anything by renting. Living cheap like this has allowed me to save 160gs in just a few short years. I could pay cash for a house if I wanted to, but the prospect of paying property tax, insurance, and maintenance which would be (probably much) more than I pay to have a nice place as it is doesn't seem worth it. I guess the question is how much you value having extra space you don't need, and how delusional one is to think they actually "own" a home (try not paying "rent" to the government and see how fast they throw you out). We're all renting one way or another. Most home "owners" are renting cash from a bank as well as land from the government. Stop paying either rent and you will be removed.

Look at it from a red pill perspective. It's all an illusion to keep the slave on the hamster wheel as far as I'm concerned.

[ScoopLV]

Originally Posted by djslakor

To the person who claims renting is nothing more than putting money into a hole ...

Do you pay property taxes? Do they give that back?
Do you pay interest on your mortgage? Do you expect to get that back?
Do you pay insurance on your house? Do you expect to get that back?

You pay ALL of that too. The landlord bundles it all up into one easy monthly chunk called rent. You pay all the same things I pay -- but I get to deduct them from our taxes. And I'm not paying an extra premium on top of it all to enrich a landlord. Do you think your landlord is paying the taxes, mortgage interest (if not just paying cash) and insurance and then NOT passing it along to you? That landlord must be named Gandhi. You pay for the same things -- it's just not itemized and you can't deduct them. Your landlord can. This is GREAT for the landlord. Not so much for you.

You will figure it out sooner or later. The sooner the better -- if you're going to stick around in one place for any length of time, at least.

Yes, rent is throwing money down a hole.

[8bravo]

Here's a nice article about the downsides of buying a home from May 2012:
6 Simple Reasons Why You Shouldn't Buy a Home - DailyFinance

I find #2 intriguing:
Homes appreciated at an inflation-adjusted 0.4% annually from 1890 to 2004

The long-run track-record of stocks is close to about 10% p.a. Add the lost flexibility and maintenance cost of owning a house to that. Now I still believe that I'm better of renting.

It has been proposed earlier that our type of life-style looks like active military duty. It is not. We're not ready to settle yet (even when I'd leave the possible move from CA to NV next year out of the equation). I just counted that I've lived in a total of 10 places since I was born (the last 2 in California and the other ones before that in Germany).

It is most likely that we're going to move to Nevada with our company next year. So I'll have to rent again to get a feeling for the new environment. Currently I see myself buying no sooner than 2024, which is the year our retirement accounts are (knock on wood) supposed to hit the $200,000 mark and our daughter will be 20 and (again, knock on wood) will have moved out of her parent's home. But even then I can't see us draining our nest egg just for the ego-boost of owning a house. So in practical terms we'll be more inclined to finally settle on a house in 2034 or so. At that time I'll almost be 60.

[ScoopLV]

I see this as the wrong way of looking at things.

You will spend $X on housing. Whether you rent or buy, you will spend $X per month. (Barring a rich uncle giving you a house.) The goal should be to own the house as quickly as possible. Get free and clear, drop the monthly $X down to next to nothing. And then start REALLY investing.

The homeowner can sell the house and recoup some/most/all of their accumulated payments when they sell. How much the homeowner recoups depends on how the market has done. (If the homeowner is upside down -- that is the homeowner's problem. The homeowner should have arranged better financing and paid down the principle.)

No matter the market or the scenario, the renter gets nothing back.

There is a great deal more to home ownership than "ego-boost." And you don't have to drain your nest egg down to nothing. Put down a reasonable amount of money, and then get the shortest-term loan you can afford. Frankly, what are you going to do with $200,000 in 2024? That isn't a whole lot of money TODAY, let alone 11 years from now. Certainly not enough to carry a couple through retirement. And while there are many people who rent until they die, I don't agree with this strategy. Not for people who don't have money to burn, at least.

[Trader Joe99]

Djslakor you are doing the right thing - smart man.

This market is too crazy. It is not normal. This scares many buyers and sellers. Most people will wait until things become normal again. No matter how many people buy into this market, valuations propped-up by unusual and fragile government manipulation are ultimately unsustainable. I fear what lies ahead. It brings to mind NYC about 40 years when most didn’t want to own real estate under any circumstances.
[mod cut-- off topic]

[logline]

Originally Posted by djslakor

To the person who claims renting is nothing more than putting money into a hole ...

Do you pay property taxes? Do they give that back?
Do you pay interest on your mortgage? Do you expect to get that back?
Do you pay insurance on your house? Do you expect to get that back?

I pay $450/mth to live in an all inclusive very nice master bedroom situation with my own private garage and entrance. Considering I use highspeed internet and utilities that would run me $200 at the minimum anywhere else, the real base rent is basically $250. I've rented entire homes before, and I'm 100% just as happy renting less space. It makes no difference for me as a single bachelor with simple needs.

Would that cover property tax, interest, and insurance if I owned a home? I doubt it. I don't particularly feel like I'm losing anything by renting. Living cheap like this has allowed me to save 160gs in just a few short years. I could pay cash for a house if I wanted to, but the prospect of paying property tax, insurance, and maintenance which would be (probably much) more than I pay to have a nice place as it is doesn't seem worth it. I guess the question is how much you value having extra space you don't need, and how delusional one is to think they actually "own" a home (try not paying "rent" to the government and see how fast they throw you out). We're all renting one way or another. Most home "owners" are renting cash from a bank as well as land from the government. Stop paying either rent and you will be removed.

Look at it from a red pill perspective. It's all an illusion to keep the slave on the hamster wheel as far as I'm concerned.

I can't believe renters STILL don't get it!

You DO pay for property tax, maintenance, HOA, etc. That all comes out of your rent! By the way, owners do get some of their interest back thanks to the IRS. Renters never get their rent back, that's for sure. Worse yet, you actually pay MORE than owning because your landlord is making a profit on top of all those expenses you *think* you're avoiding.

You have no equity.

In 30 years, you'll still be renting a room in someone else's house who made a profit off you. You'll have nothing to show for it. If you decided to buy, you would have 30 years of a stable monthly "rent" and would own it outright at the end of 30 years (or 15 or 10.. whichever loan you choose). No inflation on your housing payment for 30 years! It's really a no-brainer... obviously.

[djslakor]

I'll make the math a little more simple to follow:

I pay $450/mth total for my current living situation. The utilities, cable, HSI, etc. are all included. If I had a house, I'd pay for all that myself (probably $200/mth).

This leaves a $250 balance. Are you telling me that property tax, insurance, interest expense, hoa, and maintenance is less than $250/mth? All of those expenses do not go towards any equity, they're purely expenses. When you move in 30 yrs, do you get any of those expenses back? No. So tell me how my loss is any greater than yours as a renter (on this amount)?

I don't see how I'm spending money that could be going towards equity. If I had a home, this $450 would be going towards the aforementioned expenses having nothing to do with equity.

It may be a futile effort to try to explain it any more clearly.

"Own it outright" ... is an illusion. Stop paying your property taxes and see how long your paid off home remains yours. In TX, property tax is easily $6k a year on a median home, that's $500/mth in property tax for life ... more than I currently pay in total to be a happy renter.