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When the housing market began to collapse a few years back I saw it coming and wisely sold my house before it was too late. I was one of the lucky few who made money on my house and was able to put it away for a future house.
Thankfully I was able to sell. Unfortunately the people I sold to where not so lucky as the house was on the market again about a year ago for around half of what they paid. I played around with the idea of buying it back but decided the whole transaction would have been too awkward.
My plan was to rent for a while and watch the market and see how far it dropped. I found a nice 3 bdrm 3 bath with a large garage for $1250 so I was happy and stayed there for about three yrs until the market bottomed out. Eventually the cost of renting became more than owning so I decided it was once again time to buy. I'm now living in a a much nicer home than I had before I sold and a much nicer home than I was renting and paying just a little more than the rental cost each month.
5 yrs ago I would tell you that renting was a good option as home prices where way beyond what the average family could buy. Today the market has changed. A 2 bdrm apartment in a crappy complex is $950 a month but nice 2 bedroom condos are under 100K and many 2 and 3 bdrm homes are under 200K. In today's market I feel renting is throwing your money away.
So then, how do you justify the $45,000 you spent on rent?
i'm sure it beats being homeless, don't you think?
Not at all. This is what he said, that he "made money" and "put it away". For what? : to pay rent with it until he found another house. (he was not going to be homeless) If he had stayed in House #1 and not moved twice, House #2 that he eventually bought was depreciating at the same time. But in the interim, it cost him $45,000 plus moving costs to rent.
Originally Posted by johna01374 When the housing market began to collapse a few years back I saw it coming and wisely sold my house before it was too late. I was one of the lucky few who made money on my house and was able to put it away for a future house.
Not at all. This is what he said, that he "made money" and "put it away". For what? :
as he said: for a future house
Quote:
But in the interim, it cost him $45,000 plus moving costs to rent.
so? why does that even matter to anything?
as to the money and projecting "what if's"...
what if like 90% of people who sold after he did...
he would have lost a pile and probably close to that $45k figure
Well, that makes you the first person I've seen that would prefer homelessness to renting. I guess there's a lifestyle for everyone.
Quote:
This is what he said, that he "made money" and "put it away". For what? : to pay rent with it until he found another house.
You don't know that. For all we know he paid his rent with his income, while he collected interest or dividend payments on the lump sum he invested from his home sale.
I sold in 2005, and bought a house in Chiang Mai, Thailand for 23,500--it was furnished. I re-entered the US housing market in 2009, with a condo purchase in Summerlin, NV. Possibly, the best financial decision I ever made.
I own a home. But... I do NOT think that rent is "throwing money away."
Especially not in the current RE market. Not even in my area, that is still doing fairly okay.
Rent pays for a place to live. Much in the same way that the electric bill pays for power and the cable bill pays for tv and/or internet service.
Why is rent "throwing money away?"
Unless you're being taxed excessively due to your very high income (which is not the case for most Americans) and want the write off, why on earth rush to buy in an unsure location/market?
I am a native of NC. My husband is a transplant of many years.
Both our companies are going through (again) the "we may have some layoffs" thing.
So... we are cautious about buying a larger home. We are looking, and if the right thing comes, we will buy it.
I read all the time about people desperate to grab a slice of the current market wherever they are located. If they don't have a large family that need shelter? I think they're nuts.
Why hurry? What is happening right this minute that makes people wanna buy a house?
I think the market is still sinking somewhat.
Interest rates appear to be good, but unless they're at 2%, I'm not gonna buy a house because of them.
I dunno.
Someone help me grasp this?
It's a sales ploy for lenders, plain and simple. A home is an expense, not an investment whether you rent or "buy" with a mortgage.
Considering only $300.00 of my $1500.00 mortgage payment last month went to the actual loan and my home value has dropped, it seems I'm not doing much better than a renter.
Depends on what you can rent, and how long the rent stays the same. The "investment" aspect of a home is somewhat secondary. I've always viewed buying a house in these terms.
1) I'm in it, and don;t have to move anymore
2) I can modify things in a minor or major way, If I choose to
3) Some stability, and fairly predictable costs.
4) I view it as a "hedge" against inflation, not necessarily a true investment.
Given the choice of renting a 3 bedroom house for $1700 a month, or buying the same house with total monthly costs of $1200 or so, I'll take the latter. I realize that savings is a key to maintaining a house, because roofs do need replacing, and there are many other things to care for. I'll also take the house deductions thank you, because I need them too
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