Was/Is it worth it?(Owning a home) (plumber, sale, accept)
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For us home "owning" was a 23 year financial black hole. I will never buy again unless I am absolutely certain we will not relocate, and the payment including tax and insurance is no more than renting. House prices are still way too high.
What happened? Bought more house than you could afford, or a home repair money pit?
The most basic reasons for owning a home haven't changed over the decades... It's the people and expectations that have switched gears with regard to what a home is "worth". Frankly, it's completely out of whack and kind of sad.
So if you're asking if it's "worth it" from a purely financial aspect - no, there are much better investment opportunities out there right now.
Now, is it "worth it" emotionally as a place to live and raise a family over the long haul? That's a personally subjective answer and I would agree the answer there is yes for most people. All things being equal, if you can afford it the non-financial drivers to owning far outweigh the emotional drivers to renting.
What happened? Bought more house than you could afford, or a home repair money pit?
Job moved so had to rent it out. Had to rent for less than the mortgage payment for years to keep renters in it, prop tax and insurancetripled. two roofs, lost count of paint and carpet, two evictions, cracked slab from drought, etc, etc. As it turned out, any house was more than we could afford. FWIW, bought the 2 year old house at 57k in 1979.
As has been pointed out, when this happens and you are renting... the costs are passed on (By the homeowner) to the renter...
Nope. Properties rent for what the market will bear, which has little to no relationship on what the landlord needs to break even or make a profit. It's similar to the concept that houses only sell for what the market will pay for them regardless of how much the homeowner needs to pay off the mortgage.
Home ownership is a good choice for us, primarily due to personal preferences and lifestyle choices. We don't buy a home with the intent of making a profit on it down the road - we buy it to live in.
Reasons that owning a home is a good fit for us:
We hate moving. The idea of packing up all our belongings and moving every two or three years is anathema to both of us, so buying a home and keeping/living in it for decades is the ideal solution.
We like our privacy. Leases include clauses that allow the landlord to enter to make repairs, show the apartment, do inspections and so on, and we just don't want people entering our home unless we invite them to do so.
We want to be able to paint the walls, put pictures up, change the drapes, re-do the floors, and make similar alterations in our environment, and we want to do so without asking permission.
We want to have the freedom to own a pet if we so choose. In our community, most apartment complexes will allow tenants to have one or two cats at most, and very few allow dogs. Even fewer allow dogs over 50 pounds. Owning our home means that we can choose what kind and how many pets to have.
Downsides to home ownership certainly include lawn care in the summer and snow shoveling in the winter. And if the water heater or the furnace suddenly conks out, we're on the hook to repair or replace them, rather than letting the landlord bear the cost. On the other hand, if that does happen, we don't have to wait for days or weeks for the landlord to get around to making the repair.
I'd never buy a home solely as an investment. Yes, it does wind up being the single biggest part of most people's net worth, but there are a lot of much better and less laborious ways to invest one's resources. If your lifestyle and personal preferences are such that apartment living is better for you, don't buy a home just for the sake of owning property. The only reason, in my admittedly inexpert opinion, to buy a home is to live in it, and that's only worth doing if home ownership meets your lifestyle needs.
I'm probably out of the ordinary, but it so far hasn't been worth it. I hate how my hard earned money is being spent on maintenance and stuff all around the house. I feel like I'm wasting my life by working my tail off for a darn house. 5K for a new HVAC, 3K for a new patio door (included installation), 1600 to get rid of squirrels in our attic, 1000 bucks for a leak on the 2nd floor that damaged all the way down to the 2nd floor, trying to get rid of all the gold brass fixtures, new switchplates/lights because they are disgusting/broken/dirty, 400 dollar water bill because of trying to grow grass that had patches. I could go on. All that money, I could have done so many other things with had we just continued to rent our 800 dollar a month apartment.
Since my house is 100% paid for and I can do all my own work on it, yeah, totally worth it. It needs another ~$15k in work on it (If someone else did the work) but only a few hundred in materials, so it doubles as something to do for fun. You know, if you're weird like me and enjoy that sort of thing.
Since my house is 100% paid for and I can do all my own work on it, yeah, totally worth it. It needs another ~$15k in work on it (If someone else did the work) but only a few hundred in materials, so it doubles as something to do for fun. You know, if you're weird like me and enjoy that sort of thing.
I notice one of the main things people say the reason they like home ownership is "so they can do whatever they want to it"............well I'm not a kind of person the wants to work on a house and change it all around.
I like things simple and left alone not to mention I'd rather do other things besides tinker around on a house.
i was just discussing this in another forum . this is my opinion on home ownership from a financial perspective. there are reasons for owning but they are non financial reasons..
whether you buy or rent doesnt matter when it comes to housing costs. both are expenses. the lifetime of costs owning a home will easily eclipse the residual value of any home. typically taxes and mortgage alone run 2 to 3x the cost of the house and thats with out any other costs,renovations ,repairs ,insurance and all the other hundreds of costs that go with a house over a lifetime.
even if you buy another house the clock keeps ticking and adding up those costs. sell a house at a profit and rent? now that money goes to rent.
its all an expense folks ,dont fool yourself.
its not about whether you buy or rent .its about what do you do with the money as a renter that you didnt spend on the home . there are very few areas you arent at least 10 years of rent increases at 3% a year from catching up to the costs of buying.
a renter who invests the money he would have put down,the closing costs and the differences each month they saved will easily surpass anything the homeowner will have if he invests it elsewhere in a diversified mix.
my own home cost me 169k in new york in 1987 and sold for 330k in the early 2000's. the same amount following my fidelity insight news letter was 1.8 million. enough to buy 2 homes today and subtract out all the rent i paid.
typically by retirement it shakes out like this.
the homeowner can have lower housing costs but a smaller nest egg because he tied up the money in the much slower appreciating house along with many many expenses long term..
the renter will have higher housing costs but if they planned right a higher income from their larger nest egg.
the wild card is whether a renter has the discipline not to spend that extra dough and the answer is most of the time no.
so the homeowner at least gets the consolation prize of some residual value in the house.
in any case a home represents your cost of housing and its only an expense. .
my example is this.
suppose you rented a house and bought the house next door instead and rented that out.
suppose you got even more money than your paying in rent. are you at a disadvantage because your renting ? of course not.
suppose that rent increased along with your rent increases as well.
now picture this. instead of buying that house,suppose you invested in other asset classes that did even better and produced even bigger gains. are you at a disadvantge to the home buyer? no way..
thats the point. its all about what the alternatives are a renter does with that money he didnt spend on a house.
in either case you will spend a ton of money towards your housing costs and all are expenses in both cases . its only at the end of a lifetime of housing that you can tell who came out ahead.
Last edited by mathjak107; 08-17-2011 at 03:49 AM..
The financial benefit of owning a home is having more of a grasp on your cost of living going forward. If inflation plays a part, you still pay the same amount in mortgage (or own the home outright). Whereas rent could go through the roof.
investments made by a renter with the money instead of buying can soar as well easily paying the rent increases. in hyper inflation renting and gold investing instead will far out eclipse home appreciation if any..
dont forget you can buy any assets with a loan or margin not just a home so paying back with cheaper dollars applys across the board.
in high inflation housing values can plummet too leaving you worse off. in the 70's i saw 18% mortgages cripple housing and that wasnt hyper inflation. that was just high..
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