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If I was single, I also would rent. Having a house is more trouble than its worth anymore. Repairs can get very expensive. If there is a job change, or you don't like the neighborhood, picking up and moving is very expensive and complicated if you buy a house. Plus, the house might just go down in value. Buying a house was standard wisdom 40 years ago. Prices continued upward because of inflation, and people's jobs tended to be more stable.
No, because he wouldn't. The crass cutting was for the house, not the apartment.
No, he said he's comparing the cost of renting vs owning and specifically says he's in a one bedroom. Why would you think there are any similarities between the costs of a small apartment vs a house?
We bought one house in 2013 for $442K and sold it five months later for $608K. We were able to get out of capital gains, because there were IRS approved mitigating factors for the sale. The subsequent house we purchased cost $716K. We only put $30K into work in it and it just appraised at $825K. Zillow puts the house at $1MM. Truthfully, we'd need to do some big ticket upgrades before it appraised for that amount, but still...
I love the stock market and invest aggressively, so I'm not dissing it; but I have to say, these last two real estate purchases have had a much more favorable ROI.
So your appreciation on the first house was 37% in 5 months. I think something was going on there, either you got it well below market for some reason, or you put money into it to increase that value that much in 5 months. But let's go with it.
Appreciation on the 2nd was 79k(825-716-30), or 11%. So your total appreciation 2013-2015 was 48%.
So even with your ridiculous 37% gain in 5 months in 2013, which probably very few people could achieve, you only kept pace with the stock market.
In reality most housing markets are appreciating at a pace far less than that. Case Schiller national index increased from 144 to 166 from January 2013 to present, which is a 15% gain. Real estate is local so some markets did better, some did worse, but I doubt very many kept pace with the stock market which has been on a tear since the recession ended.
No, he said he's comparing the cost of renting vs owning and specifically says he's in a one bedroom. Why would you think there are any similarities between the costs of a small apartment vs a house?
I wouldn't. I'm just saying the OP did not mention cutting the grass of an apartment.
Wow....talk about being stuck on an idea without looking at research that you quoted to support your idea. So even after I gave you a specific page from your OWN link you didn't bother to read it. That tells me you obviously never read the whole 50 report you sent me since cant bother to read a single page.
As I said the research states that it wasn't exactly an apples to apples comperison. This is from your source!! If your own source is saying the same thing I'm saying mabye there some merit to it dont you think? I knew this was going to be pointless, just like last time. Feel free to reply to me if you wan't but I'm done.
The source says that the analysis might be biased towards renting. Conceded. However, it does not say that buying is almost always better. It does say the chances for it are increased though.
You could save a lot of money by doing things such as cutting the grass yourself.
If the alternative is a ripoff lawn care company, sure. OTOH, if it's the neighbor's teenage son, surely the cost is not that high?
Quote:
Originally Posted by Slowpoke_TX
Did you use property tax rates from Harris Co., Chambers Co., Ft. Bend Co., or Montgomery Co.? I know Ft. Bend County is reputed to have some of the highest property tax rates in the state. Please show how you came up with $3600 per year in property taxes.
And how did you come up with $250 for utilities? You must use a lot of electricity. I live in a 1350 sf house in San Antonio, and my electric bill is just under $50 a month - with the thermostat set at 70 degrees 24/7, an aquarium that uses 5 electrical outlets, and an old refrigerator that is not the most energy efficient. Are your "utilities" including things such as cable TV, internet, cell phone, alarm monitoring, etc.?
Also, you forgot to include the fact that the increase in rent outpaces the increase in property taxes by a considerable amount per year.
By itself, sure. But the other non-mortgage costs also go up with inflation, not just property taxes.
The real problem, of course, is that the OP is not comparing apples to apples as has been pointed out ad nauseum.
I think it makes has much sense as buying a sports car if you want one and can afford one. Perhaps more when you have choice of either buying or not living where you want to; which is common.
So your appreciation on the first house was 37% in 5 months. I think something was going on there, either you got it well below market for some reason, or you put money into it to increase that value that much in 5 months. But let's go with it.
Appreciation on the 2nd was 79k(825-716-30), or 11%. So your total appreciation 2013-2015 was 48%.
So even with your ridiculous 37% gain in 5 months in 2013, which probably very few people could achieve, you only kept pace with the stock market.
In reality most housing markets are appreciating at a pace far less than that. Case Schiller national index increased from 144 to 166 from January 2013 to present, which is a 15% gain. Real estate is local so some markets did better, some did worse, but I doubt very many kept pace with the stock market which has been on a tear since the recession ended.
Yes, we bought both houses well below market value. Both of the houses were our primary residences, neither one was an investment property. As stated in my previous post, we LOVE the stock market. We just happen to invest in both it and real estate. Both types of investments have merit. Why limit oneself to just one type?
Very true, I agree with what you are saying here. The original idea that you were in fact responding to within this thought is that someone would have invested the $13,000 instead of buying a home with the money. Even back in the 1950's and the 1960's people may not have had the cash to buy a home outright, meaning that they probably did not have the $13,000 to invest in the market. They could have maybe invested the amount that they were going to pay for the home with but then that would not be $13,000 growing during the time frame, that would be $100 a month growing in the market over a 30 year period, I am betting still much better than if the person had bought a home, but not sustainable for the majority of people. These people would still need someplace to live.
Chances are if someone had in fact had $13,000 in their bank account at the time that they may be better off buying a home on credit, since they would be paying rent anyway, and investing the remainder in the market. If they had placed 20% down that would have been $2,600 from the $13,000 leaving them with $10,400 to place in the market. In the end they would have a paid off home, assuming they are like my parents and many other people that I grew up with, and stayed in the home for the time frame. They would also have a nice retirement account.
The truth is how many people are we talking about that could have done this? I would bet that the number would be similar to someone that could do it today. Lets be generous and say that 5% of the people buying their first home have the money to pay cash for that home. I don't think that evwen 5% could do it back in the 50's or 60's and I don't think 5% can do it today. I do think it is possible to do it though. Even for someone that does not have much, with dicipline they could live a meager life and build the net worth to do it.
$13,000 was a large sum in the 1950s and 1960s, probably 2 or 2.5X most people's salaries today. My parents bought an entire farm for $10k in 1960. It was common for families with 2-5 kids to live on $500 a month back then. My dad retired in 1982, and I don't think he ever made much over $10k in one year working in a factory full time and farming part time, and that was towards the end of his working days.
Yes, we bought both houses well below market value. Both of the houses were our primary residences, neither one was an investment property. As stated in my previous post, we LOVE the stock market. We just happen to invest in both it and real estate. Both types of investments have merit. Why limit oneself to just one type?
It does have merit, I love being a homeowner, but much of it is non-financial in nature. Being able to put down roots and stay in one place, being in total control of your house, not answering to a landlord, etc. The main discussion here has been which makes more financial sense, renting vs buying, and I think a great case has been laid out by a lot of posters that renting is better in most cases, strictly from a financial point of view.
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That tells me you obviously never read the whole 50 report you sent me since cant bother to read a single page.
