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I think it means you have achieved the American dream by owning a home,in some people's eyes.
You know,the white picket fence. Me personally,I have always wanted a loft in the city.
Yes, but it doesn't make sense, and it's a hackneyed statement, since everyone has different dreams and goals in life. I'm sure all those people were "living the dream" before they went into foreclosure. Owning a home simply does not equate to middle class and I wouldn't say my crazy MIL is living the dream either, since she can barely pay her bills. Lucky for us! We have to pay to fix her house when something goes wrong since she can't afford it.
I rented for over 10 years, spent about 7 years in one house rental. Had to move and buy when the new landlords (son and daughter in law of the original landlord that passed away) decided that they were not getting enough in rent and as I was month to month they started a campaign of raising my rent quarterly from $650 to $950 in less than a year. Needless to say my boss was not raising my wage at the same rate. I found that purchasing a small fixer upper in a not so great area of town was more affordable then renting, and my landlord at least gave me a good reference to the bank for the loan. It now is a rental itself and I don't screw with my tenants like that, its an annual lease only I don't rent month to month.
Not to say that they haven't screwed with me though but thats in other threads.
In any case, purchasing a home as 30 something single lady, nevermind one that needed a lot of work, was not exactly on my list of things to do, but there it is. I've now owned it for 8 years, and its been rented out for 5 of those years. If I did not have my fiancees house to move into and turn it into a rental I quite possibly might have lost it, as my boss fired me 3 months after I bought it. I was able to live off the line of credit I got immediately to make repairs and still have that to pay off as well as the 30 year mortgage.
I earn no profit on the rental, I pay more then I get in rent, but even if it were not slightly underwater I am hanging on to it. You never know what the next 25 years will bring and I feel its best to have an alternate place to go should something happen to my fiancee (he's older than I), and I will never be able to afford the house we live in now.
"You can't be middle class if you don't own a home" is simply a terrible idea. You can own a home, in some way or another, and live paycheck-to-paycheck or live off of disability. My MIL has a home and the only money she has is from SS. You think that makes her middle class in the middle of NYC at around 20-21K/year? She can't even pay her bills.
My friend and her husband, a lawyer, paid a ton of money to rent a fancy apartment in Manhattan. Most people in their building with six figure incomes were renters. They could have bought but chose not to. There are people who move around a lot and for them, it makes little sense to buy.
The tax breaks from home ownership aren't all they're cracked up to be. When you're renting, you're usually responsible for rent, gas and electricity. When you're a home owner, things can become very expensive very quickly. If somethings goes wrong in my co-op, I'm responsible for it. When my parents had their boiler breakdown and their taxes go up on their property, that's all on them. Add in a new roof, brick work, a new sidewalk, a leak, a new bathroom, etc. and there goes all of your money.
OP, I don't think anyone should buy a home if they don't really want to. I was renting for a little over four years before we bought our co-op and I still question whether or not this was the right move for us.
I agree. My mother owns three homes. One she inherited, and is currently living in, has many problems and costs her and arm and a leg just to keep it warm in winter and cool in summer.
Other home is my childhood home. Three hours away, she uses it as a rental income property but hasn't been able to keep up with repairs or updates (it was built in the 60's), can't always get maximum rent as a result, and I can't tell you how many times she's had to deal with renters trashing the place and she has to pay over and over again to clean it up and fix it. And she is strict with rental criteria, does credit and background checks and all that. Being a "long distance" landlady is a big part of the problem though.
Third is currently sitting empty; was supposed to be rental income too. So she is 70 and struggling on Social Security and the income from the one house 3 hours away.
I think you should do what works for you but don't let someone push you into home ownership if you aren't ready. We were not really ready, thought we were but we weren't. Had money saved, had it all planned out, but you know, crap happens, stuff can go REALLY wrong, incomes drop, disasters cost you more than you ever expected.
It was for those reasons that we spent one summer taking icy showers inside or "showering" in the backyard with the water hose, because we simply couldn't afford to replace the water heater. The backyard hose option was preferable since our summers are in the 100 degree range and it was much more bearable to put on a swimsuit, work out back in the yard for a bit then "shower" with the hose and a bar of soap. Much better than a cold shower inside. We did that for the entire summer until we had money to fix the problem. No thanks, I'd rather call the landlord!
For us, yes, our mortgage was a bit less than the average rent for the same space but other costs made it just a constant struggle. Way too stressful. Maybe we'll try again later.
If you know you're going to be planted somewhere for some length of time (think 8 years or more), then maybe owning a condo or home is right for you. Otherwise, it's not a huge deal. In fact, being tethered to a property when you want to leave can be quite frustrating. I speak from experience, as I'm currently going through this now!
A few factors that come into play are if you're saving for retirement (if not, you should be and if also not, owning a home that's paid off by the time you want to retire is pretty nice), if you have a stable career, if you intend to start a family.
For the longest, people assumed buying a home was always win/win. They'd just sell it later if they needed to move with the perception they'd sell it for more than they bought it for. That's not so much the case, especially these days. Don't let that be too much of a factor for you.
As a homeowner, I can deduct my mortgage interest and real estate taxes paid on my house. Renters can't do that.
What you are really doing is spending 4 bucks over and above the price of the house to get back 1 dollar.
Get rid of the expenses,forget the deduction and you will be ahead.
If you had no mortgage and no interest to deduct and if they reduced your real estate taxes so you had almost no deduction your piggy bank would be richer.
Know who has the real tax benefit? The renter.
Take a renter couple with a roughly 12,000 buck standard deduction. They may have a few thousand in state and local taxes and get to fly the empty seats. They get money back on the standard deduction they never spent.
They can take that dough they have left over from the standard deduction when they get it back and put it in their piggy bank or towards the rent.
Mr and mrs homeowner actually spent that standard deduction and are poorer for it. They pulled money out of piggy and got nothing back on that first 12k.
Remember too this is money over and above the cost of the house.
Folks deductions are not good things. They are expenses . They are no different then getting a rebate of 1 buck back for every 3 or 4 you pay the utility company.
Trigger the amt tax with your deductions and you can not even deduct your real estate taxes as well as getting penalized on all your income.
Last edited by mathjak107; 03-04-2013 at 07:14 PM..
I got off to a late start in life, so I've only been living on my own since June, 2012 at age 37, so that's only 9 mos of renting for me. I'm single, unmarried & have no kids either. If a person is single, unmarried & has no kids & enjoys renting, there's no rule that says the person shouldn't keep renting no matter how old they get. I have a cousin who's over 50, divorced & never had any kids & she's always rented.
For me personally, I'm sure I'll eventually get tired of the walking from my garage, outdoors & up one flight of stairs to get into my apt & I wish my main living room had more natural light, but other than those 2 things, I enjoy renting. Those 2 things are fixable as I could rent a different apt.
I have been renting apartments on my own since September 2003. When September 2013 comes around, I will have rented apartments on my own for 10 years. I am single, never married, and no kids. The apartments that I rented were always affordable, and I usually was able to put aside a good amount of money for savings every month. Do you rent an apartment or buy an apartment? How long have you rented or bought the property? Should I keep renting after 2013? How long should someone rent? I know that I could have lived with my parents but I didn't want to deal with all that drama and stress if I didn't have to. Any advice on what you think I should do would be greatly appreciated. Thank you and have a great day!
I've been renting for 3 years. I have a nice, quiet place and haven't had any problems whatsoever, but I'm thinking of buying a house. I'm also single with no children so there's really no great need for a home but I would like a bit more space and the mortgage would be comparable to my current rent. I'm only concerned about all the money I'd have to put down to buy a home and if anything major goes wrong, I'd have to pay to get it fixed unlike now. I don't plan to buy a house unless I get a really good deal though.
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No thanks, I'd rather call the landlord! 
