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I was on the fence just like the OP a couple of years ago. Without question, for me, I'm very glad I made the plunge to become a homebuyer although it was daunting at first.
+ Owning your own property with no annoying landlord telling you what you can't do.
+ Not hearing the tenants above you
+ Having a backyard
+ Entertaining Guests/Company
+ Summer BBQ's
+ My previous 2 bedroom apt rent approaches my mortgage payement (via rent increase) every year. At some point in the next decade it will surpass the monthly mortgage payment.
+ I can sell my house and get some return on investment in the future.
So if you rent out a nice apartment in a garden complex and you have a balcony or little patio out back you can't entertain guests or have BBQ's?
This argument doesn't really make that much sense unless you wanted to have a backyard and property if you want to have kids and make it safer, etc....
Also, another one of the posters said that the real estate values over the past 30-50 years have been proverbial roller coasters which is very true.....yes they went up in value during the "boom" years of 2002-2007 but now look at what happened.....just like all bubbles.....they crashed! And a lot of people are now underwater on their mortgages and the values of their homes....
It will take years to recover the 50-100K some people lost on the values of their homes the last 2-3 years.
And even now, after the crash, housing values on LI are still exhorbitantly overpriced and overtaxed.
If you took that money for the down payment you put on the house (100K) and invested it wisely in stocks or mutual funds (like Google stock or something) then you would be a millionaire now.
The stock market has snapped back a lot faster than the housing market for some reason....
I'm not sure about that. Renting in a nice neighborhood in NYC is a costly affair that would easily cost more in the long run than buying a house in LI at what I consder to be rock bottom prices.
Why are you comparing NYC renting to LI buying? Apples to oranges.
You don't have to buy a 400K house. There are plenty of houses out there on LI for 200K, they may not in the neighborhood you were hoping for but they exist. A lot of them are not bad either, and if you can get past the image of certain neighborhoods that's been implanted in your head since you were a child you'll find that you can have a nice place to live without selling your soul to a bank.
It's the people who can get around the preconception they've been given of an area's reputation who can bring about the change in that area. Look at the areas in NYC which have undergone gentrification. Unfortunately many people don't want to take that risk when there's a school aged child involved.
The stock market has snapped back a lot faster than the housing market for some reason....
The stock market is a fluid market with ease of entering and selling. A home is an illiquid investment which takes on average 30-60 days or longer to consumate a purchase or selling transaction. There are high costs involved in homes, whereas the costs to enter/exit a stock transaction are far less depending on volumes could cost 20 bps versus 5-10% on home purchase/selling prices and involve far more intermediaries - bank, purchasing attorney, sellers attorney, real estate appraiser, two sets of real estate brokers, state taxes for the seller, funding of transactions, etc.
If homes could be flipped the way stock could, then you'd either have an immediate drastic decline of home prices or on the way up, a skyrocketing price - the way it stands now, there is a more orderly move either up or down.
Also, another one of the posters said that the real estate values over the past 30-50 years have been proverbial roller coasters which is very true.....yes they went up in value during the "boom" years of 2002-2007 but now look at what happened.....just like all bubbles.....they crashed! And a lot of people are now underwater on their mortgages and the values of their homes....
It will take years to recover the 50-100K some people lost on the values of their homes the last 2-3 years.
And even now, after the crash, housing values on LI are still exhorbitantly overpriced and overtaxed.
If you took that money for the down payment you put on the house (100K) and invested it wisely in stocks or mutual funds (like Google stock or something) then you would be a millionaire now.
The stock market has snapped back a lot faster than the housing market for some reason....
The stock market is just as volatile as the housing market. If it was that easy to become a millionare everybody would be doing it.
Right now you feel renting is better than owning while you are in your 20-30's because you have the drive, energy, and resources to move around wherever and whenever. But as time goes by, not only does your financial situation change, you as a person will change. You may no longer enjoy the benefits of renting 20 years from now. You may suddenly take an interest in having your own backyard or building a kitchen/bathroom/basement they way you want it to be. Or the bulding you are renting in would end up with a bunch of 20-30 year old tenants who stay up late and get loud while you are trying to read or sleep!
Yes, people who bought houses in the last 6-7 years lost a lot of their property's value, but if their goal was for a home and not just a house, then they really didn't lose anything. Even a house that lost value would still provide enough capital to purchase another property. You can't do that if you are renting.
Stay away from co-op's. Condo's and townhouses are fine. Better resale
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