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Not true at all ,this has nothing to do with the housing market crashing ...it is the fact if I buy instead of generating a minimum of 15k a year that money is tied up in equity where it does me no good as far as cash flow ..
You need to look at the entire picture .... sure buying cost less then my rent , 6k less a year ... but that almost 400k spent on buying will leave us with at least 15k less in income.. we will give up at least 9k in cash flow and likely way more.. sure it would improve a bit with a mortgage but the interest will eat in to that difference
Different areas will have different numbers of when it begins to make sense about considering purchasing vs. buying.
Generally, I tell people that if you are going to stay put in a metro for 5 years, it's a good idea to purchase for your own occupancy. That way you offset the closing cost and are slightly ahead at the end of 5 years, and that's in a scenario where housing doesn't move in price.
If we get a scenario where every month we're losing 3% property value(like the bubble in 2007) and the floor is nowhere in sight, I'd rent till the floor was stabilized.
Different areas will have different numbers of when it begins to make sense about considering purchasing vs. buying.
Generally, I tell people that if you are going to stay put in a metro for 5 years, it's a good idea to purchase for your own occupancy. That way you offset the closing cost and are slightly ahead at the end of 5 years, and that's in a scenario where housing doesn't move in price.
If we get a scenario where every month we're losing 3% property value(like the bubble in 2007) and the floor is nowhere in sight, I'd rent till the floor was stabilized.
Unless you know you’re in a downward slide you could buy today and in two years could be going down the rabbit hole. If you’re in the downturn we’ll you got a leg up. Hope to have th3 money to buy when the market bottoms. I know we tried buying in 09/11 but nobody knew wtf to do. Most banks only wanted to deal with cash and big hedge funds. There were a few scraps here and there. And scraps they were.
We went through two downturns. Last house we bought in 1993 I think in 1996/98 lost 35% of its value right off the bat. Pretty good financial hit on paper. My payment and property taxes weren’t any different though. We struggled as I wasn’t working as much but we made the payment. Just cut back on everything. The bad time passed and we went in the bubble. I was getting offers for 680,000 on the same townhouse. Over 3x what I paid for it. Crazy. At the bottom of the bubble crash I couldn’t get 320,000. (Neighbor sold same plan house at 325k) We stuck it out that time too. I got it remodeled fir about 1/3 what it would of cost normally as everyone was starving. Place is now worth about 570,000.
I’m sure there will be another downturn someday.
There are no guaranteed safe investments. Simply make preparations for the worse as best you can and hope fir the best. And hope you don’t get a Mike Tyson uppercut in a downturn
Buying a house is stupid. I rather just rent and not worry about all other stuff that comes with ownership. It's also easier to keep the place clean considering it's smaller compare to a house. Also no worry about paying property tax etc.
Buying a house is stupid. I rather just rent and not worry about all other stuff that comes with ownership. It's also easier to keep the place clean considering it's smaller compare to a house. Also no worry about paying property tax etc.
How about buying an apartment/condo. Is that also stupid?
Buying a house is stupid. I rather just rent and not worry about all other stuff that comes with ownership. It's also easier to keep the place clean considering it's smaller compare to a house. Also no worry about paying property tax etc.
To clarify, you would rather rent an apartment not just rent; millions of people rent houses. People that rent have made me a lot of money because it is by far cheaper to buy in the long term than to rent.
You pay the property taxes through your rent, an owner pays their property taxes through their mortgage payment, aka their rent. No one really worries about paying property taxes. Even on an unencumbered property it's only 2 payments a year.
Buying a house is stupid. I rather just rent and not worry about all other stuff that comes with ownership. It's also easier to keep the place clean considering it's smaller compare to a house. Also no worry about paying property tax etc.
On the flip side renting is stupid. That's why many seniors who have worked all their lives are becoming homeless, a landlord can raise the rents $500 as long as he gives you 60 days notice when your lease is up. And even a $25 a month increase will cost you $250 more a month at least in 10 years. A smart person who buys in a low cost state with low property taxes will pay off their home in 30 years. Buying a home is the only reason many seniors can still afford to live where they do. If you want a small home to keep clean you can buy a small home. A spare room that is not used is not going to get dirty. People who say they don't want to worry about the other stuff are not disciplined enough to ever buy.
I own a home and I live by my own rules, your landlord sets the rules, has keys to your apartment, can enter when you are not there, and can tell you who can live with you and if you can have pets or not or how many overnight guests you can have and for how long.
To clarify, you would rather rent an apartment not just rent; millions of people rent houses. People that rent have made me a lot of money because it is by far cheaper to buy in the long term than to rent.
You pay the property taxes through your rent, an owner pays their property taxes through their mortgage payment, aka their rent. No one really worries about paying property taxes. Even on an unencumbered property it's only 2 payments a year.
and where I am Landlords of homes can't have homestead exemptions on that home so they pay much more than someone who owns and occupies the property.
He's paying the property taxes and insurance and water for his apartment rental too in the way of rent, it's just a smaller area without private outside space and it's smaller and you are sharing walls or ceilings with neighbors.
I live in a cheap 1-br apartment and have no plans to stop. It's a lifestyle choice. I don't have a yard to take care of....
The only problem is retirement. At the end of the mortgage, you normally have something to sell or live rent free. Yes houses are expensive, but with proper maintenance alot of costs can be negated. WHat do you do when you retire and you no longer have the income to pay the rent? Your rent will continuously increase. What do you do when you are 80 years old and have to pay $1500 in rent alone?
There are pros and cons in renting vs owning. I think with renting you gain better flexibility, yet with owning you gain better control and independence within your property. The fact that real estate does not depreciate (normally) and rents are growing, it is also usually a better choice financially; if the RE market is not overheated.
Not true at all ,this has nothing to do with the housing market crashing ...it is the fact if I buy instead of generating a minimum of 15k a year that money is tied up in equity where it does me no good as far as cash flow ..
You need to look at the entire picture .... sure buying cost less then my rent , 6k less a year ... but that almost 400k spent on buying will leave us with at least 15k less in income.. we will give up at least 9k in cash flow and likely way more.. sure it would improve a bit with a mortgage but the interest will eat in to that difference
The only problem is...how much does your rent go up?
My first apartment went up 20% over the 2.5 years I lived there.
I don't think buying is all that its cracked up to be either...No free lunch it seems unless one lives in NYC where the rent is stabilized...
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