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Consider the alternative to "owning" a house. And that would be "renting" a house. When you rent a house, you still pay all the expenses for maintenance, utilities, upkeep, repair, taxes of various kinds, etc, plus a profit to the landlord. All those things are included in your rent. Then, after your paying of all these expenses for umpteen years, the landlord boots you out and sells the house and pockets the profit for himself. You're left with a stack of rent receipts.
So, by renting, you've benefitted from not having a lot of your money tied up at any one time, but over the long run, it is YOU who is still paying all the expenses, but someone else will get to reap the profits when it's time to sell.
And another point that's important to many people, a renter is very limited in what changes he is allowed to make to a property. If you don't like the interior color, don't like the appliances, don't like the floor covering, don't like ANYTHING, there's little or nothing you can do about it. You MIGHT be able to get the landlord to make some changes for you, but that's generally rather difficult to do in most cases. Changes are usually made AFTER you move out to make it more appealing for the next renter.
As a friend of mine used to say, "When I own a home, if I want to dig a big hole in the front yard, all I need is a shovel." Try doing that as a renter and see where it gets you.
This is not a valid point "And another point that's important to many people, a renter is very limited in what changes he is allowed to make to a property. If you don't like the interior color, don't like the appliances, don't like the floor covering, don't like ANYTHING, there's little or nothing you can do about it. You MIGHT be able to get the landlord to make some changes for you, but that's generally rather difficult to do in most cases".
The benefit of being a renter is you know going in what is appealing "as is" or the property has MULTIPLE floor plans and color schemes. As a homebuyer, you only have that option to change in NEW homes within the area you desire. In apartment living, whether new or existing, there is more from which to choose.
The term " insignificant" I mentioned earlier was about an aspect that would applied to a majority of people who live in America. For example, 5 millions of dollars is not a big amount of money to maybe 5% of Americans, it's indeed a huge money to probably 95% of people who live in the United States.
People who live in high tax states such as TX, NJ, IL, NY, WI, OH, etc... can pay 4k to 15k or more yearly. So while those tax money is acceptable to people who are working and making money, they can be a burden to the lower income people who are on a fixed income, who happens to have big expenses such as lost jobs, retirement, family crisis, divorces, health problems... which cause they unable to pay for their taxes even when their houses paid off.
There have been many retirees move to a low tax states in the South from CA, NY, NJ, IL,.. for lower taxation, including lower property tax because they don't want to pay the less significant money of 1k-2k/ year, instead of the significant money ( to the majority of them) of 5-10k/ year where they move from.
While I'm not complaining about the tax system as taxes are necessary to keep the economy running and the society in order, the fact is every state has different ways to spend their tax money. Many Californians, NYers complain about their taxes and there were some merits in theirs.
To me, in America, when an old lady who live in a big house after her husband passed somewhere in NJ, then later she is forced to sell her house to move to some southern states because although her house paid off, the property tax was too much a burden and make her living life not as enjoyable. While she 'd like to stay there to be closed with her kids and grand kids, but they have their small families and they like to stay that way.
So IMO, when a person has a paid off house forced to leave her house although the house is still livable because of the nature of their income, then she doesn't really own the house.
Americans are used to be in a system where you have to earn some money on a regular basis to in order to handle the expenses, but not everyone can be that fortunate. There are a lot of Americans don't have their SS high enough to handle the high COL where they lived.
There are countries with no property taxes or with very low PT where retired people can feel comfortable with their low incomes. I would say the US has one of the highest property tax countries in the world. It's not a secrete, many Americans move to abroad countries for their retirement and bought their properties there. In those cases, THEY REALLY OWN THEIR HOUSES. Whether you prefer to live there or not because you don't like their political, people, environment, etc... it's a different story. However, if you do some research, you'd be surprised with the amount of Americans and Westerners who move there to live even at young age or for their retirement, not counting the Americans who can speak those languages that can fit in with the lifestyle much easier. It's also a known fact that wherever you live, from any big or small cities in the US from Miami, Atlanta to Savannah, Mobile, Battle Grounds to the cities in Asia or East Europe... you can find good safe areas with all the materials, living conditions you can imagine, as long as you have the money required, and it's not that much in many cases.
In Thailand, Vietnam... home owners don't have to pay property taxes yearly. They only have to pay taxes when they buy/ sell their houses. There are many other Asian countries like The Philipines, Indonesia... with low taxation, so home owners don't have to worry too much even when they don't have good money. Many European countries with low PT too. Switzerland, Luxembourg, Czech, Austria all have PT less than 0.1 %/year ( while it's 2.0 to 3.0% /year in the America's high PT states). Even the Canadians have more room to breath when it come to paying their yearly PT.
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Here is an article I found with the title Countries With No Property Taxes Where You REALLY Own Your Home
While I found the author only covered a very limited areas and countries on the subject, probably due to limited resources, it's interesting and worth some time to read.
Regarding property taxes, I don't know about other states but in Texas there is a homestead exemption of $25M (netted against tax assessed valued) to help offset property taxes. https://comptroller.texas.gov/taxes/...r%20this%20tax.
If the homeowner is 65 or older, an additional $10,000 exemption is available in Texas.
I don’t think this discussion is really about ownership …it is more about the fact that depending how much all the other expenses went up and how long ago you bought , as to whether that paid off mortgage really adds much to affordability as far as staying in that house forever if you wanted to ..
Like I said many who have their homes decades and have paid off mortgages in the tristate area can’t afford to keep those homes when taxes alone are 5 digits nor can many do the repairs many lenders want done in order to qualify for a reverse mortgage.
Most are doing so because they are already in a cash crunch
You keep bringing this up, but if you were to rent the house next door it would most certainly be much more expensive.
Regarding property taxes, I don't know about other states but in Texas there is a homestead exemption of $25M (netted against tax assessed valued) to help offset property taxes. https://comptroller.texas.gov/taxes/...r%20this%20tax.
If the homeowner is 65 or older, an additional $10,000 exemption is available in Texas.
I think most states have this (which is another reason I should have worked until age 65).
You keep bringing this up, but if you were to rent the house next door it would most certainly be much more expensive.
Nope , here it would take a landlord just buying in quite a while to break even No comparison early on
But the fact is most don’t rent single family homes here. , they rent in apartment houses We rent a two bedroom 2 bath apartment at market with pool and tennis courts in a high rise for a fraction of what a house cost
The economy of scale are totally different in fact we have home prices rising while rents are falling
I don’t think this discussion is really about ownership …it is more about the fact that depending how much all the other expenses went up and how long ago you bought as to whether that paid off mortgage really adds much to affordability as far as staying in that house forever if you wanted to ..
Like I said many who have their homes decades and have paid off mortgages in the tristate area can’t afford to keep those homes when taxes alone are 5 digits
The discussion was meant to be a philosophical one that conflates the concept of personal chattel with real property. And, honestly, they define "personal property" as chattel, when personal property can be a security, intangible asset, etc...
They claim that the requirement to pay taxes or have the property liened implies that one doesn't own the property.
Any property, real or personal, may become untenable to keep long term. If you can't afford to feed your horses, and people see it, the ASPCA or whoever can legally take your horse. If you have a car that's inoperable and can't pass inspection and is parked on the street, eventually it gets towed and sold for scrap.
If I own 5 shares of Ford Motor Company, that doesn't mean anything as far as my say in running the company, or allow me to buy a car any cheaper. It can be forcibly bought from me if Ford is acquired. It's still my property.
The idea that all property must have the same ownership dimensions of a microwave is ridiculous.
Actually no it didn’t because of the fact many said that the paid off mortgage gave them a cheap place to life forever and that may not be true So there are multiple discussions here
Some people have the strangest ways of looking at things. Sure if you keep buying and selling homes and never staying long enough to build any equity, you would basically be renting them. I bought my first home in my early 20's with a 15 year mortgage and paid it off early. I lived in it for a number of years with no mortgage payment. I still own it and have been renting it out for a number of years with a high profit margin. I bought commercial properties on 15 year commercial mortgages to use for my businesses. I paid those off early and use them without having to make any mortgage payments. I bought my second home back a few years ago with a 15 year mortgage and have been paying more than the payments each month. I got a really good deal on that home too because it was due a remodel and updates. I have been remodeling it and at this point I have somewhere in the neighborhood of $200,000 to $250,000 in equity and still have some remodeling and second floor space to finish out which will add to the square footage and value. So I guess my point is sure, I have to pay property taxes on them but I have amassed a ton of equity that I could borrow against if I wanted or needed to and I even profit from the rent. So people trying to rationalize not buying a house or property just makes no sense to me.
Some people have the strangest ways of looking at things. Sure if you keep buying and selling homes and never staying long enough to build any equity, you would basically be renting them. I bought my first home in my early 20's with a 15 year mortgage and paid it off early. I lived in it for a number of years with no mortgage payment. I still own it and have been renting it out for a number of years with a high profit margin. I bought commercial properties on 15 year commercial mortgages to use for my businesses. I paid those off early and use them without having to make any mortgage payments. I bought my second home back a few years ago with a 15 year mortgage and have been paying more than the payments each month. I got a really good deal on that home too because it was due a remodel and updates. I have been remodeling it and at this point I have somewhere in the neighborhood of $200,000 to $250,000 in equity and still have some remodeling and second floor space to finish out which will add to the square footage and value. So I guess my point is sure, I have to pay property taxes on them but I have amassed a ton of equity that I could borrow against if I wanted or needed to and I even profit from the rent. So people trying to rationalize not buying a house or property just makes no sense to me.
Well rationalize this .
The fact is people may have different resources , lump sums and options at different points of their lives and that makes a big difference in outcomes .
Early on you may have no choice but to rent our find something in that price range to buy . There likely is no other decent option other than buy .
But later on life we sold our house and had a nice lump sum . Since I hate maintenance and chores we decided to rent and invest in commercial real estate in Manhattan ..
Well today we sold that real estate off , we made enough to buy multiple homes like we had.
Those multiple 7 figures we made with the money no longer tied up in a house made us enough to generate the money we now live on yearly as wellas that money is still growing .
So how is that for rationalization.
Our housing costs are reasonable renting , and our income and growth generated by what we made by no longer having that money tied up in a house is fabulous and we are retired on it .
Last edited by mathjak107; 07-29-2021 at 11:09 AM..
The fact is people may have different resources , lump sums and options at different points of their lives and that makes a big difference in outcomes .
Early on you may have no choice but to rent our find something in that price range to buy . There likely is no other decent option other than buy .
But later on life we sold our house and had a nice lump sum . Since I hate maintenance and chores we decided to rent and invest in commercial real estate in Manhattan ..
Well today we sold that real estate off , we made enough to buy multiple homes like we had.
Those multiple 7 figures we made with the money no longer tied up in a house made us enough to generate the money we now live on yearly as wellas that money is still growing .
So how is that for rationalization.
Our housing costs are reasonable renting , and our income and growth generated by what we made by no longer having that money tied up in a house is fabulous and we are retired on it .
Don't forget to add that your apartment is rent-controlled, so you never have to worry about it increasing.
Correct?
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