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i guess the 3x the purchase price many paid or pay in interest on a 30 year mortgage to the banker and dont get back doesnt count as far as paying for someone elses mortgage.?
thats over and above the cost of the house.
dont be fooled , renters can do just fine by investing in other asset classes that grow much faster then residential real estate.
the income we get now from owning other assets instead easily meets our rental increases long term.
sold both our primary home in 2003 or 2004 i forget, and our 2nd home last july.
dont miss either one and all the work and expenses that went with them.
having said that ,considering that for the most part the public are lousy savers and even worse investors they may do better with a house.
at least they get a consolation prize and depending on real estate taxed they may have lower housing costs down the road if taxes, repairs and renovations dont end up eating that savings up..
there i no general rule about which is better. where we live our rent is being paid with just the income on the money we would have to tie up buying our place and we would still have about another 1k a month to spend on maintaince charges.
those include heat, water ,sewer and real estate taxes, and the buildings mortgage so in our case i love renting.
When people talk about throwing their money away on rent, they generally use examples like " I bought for $200,000 and sold for $225,000.....compared to throwing away $200,000 on rent and not having $25 in profit.
But, never do interest,taxes and maintance get added to what has been spent on owning.
If actual cost is factored in, many may see that they did not come out ahead.
The last place we sold after 22 years did,in actuality, cost us more but I don't regret it because of what the extra bought....privacy, freedom to remodel/decorate, etc.
When I figure paying cash for next house verses investing money and renting,
it makes sense that renting is better for me , but..
When I think of paying a 1000/month mortgage for 15 years verses 1000/month
rent it confuses me ..It does seem that the owning would have something to show for
that 1000/month..
Don't let this affect your decision.You will not be turned down for a mortgage just on that basis.
I was trying last year to get approved when I almost had a buyer for my house ..
At lease 5 banks(even my own) said " NO Job, No Loan..
Good retirement portfolio & excellent credit did not seem to matter at all...
I want to work part time contract work , but that will not be the type employment they meant...
So I just figured cash will be needed...
When I figure paying cash for next house verses investing money and renting,
it makes sense that renting is better for me , but..
When I think of paying a 1000/month mortgage for 15 years verses 1000/month
rent it confuses me ..It does seem that the owning would have something to show for that 1000/month..[/quote]
I vote for this. This represents freedom and something to fall back on should yet one more market crash happen. One more means to diversify.
I was trying last year to get approved when I almost had a buyer for my house ..
At lease 5 banks(even my own) said " NO Job, No Loan..
Good retirement portfolio & excellent credit did not seem to matter at all...
I want to work part time contract work , but that will not be the type employment they meant...
So I just figured cash will be needed...
No way to know what the reasoning was but for those with what is considered an assured income....pension,Social Security......those are often considered as more solid an income as a job that can be quit or lost.
Obviously, there are other considerations.
A friend of ours mortgaged a second home last year with only a very modest pension and Social Security for income.
No way to know what the reasoning was but for those with what is considered an assured income....pension,Social Security......those are often considered as more solid an income as a job that can be quit or lost.
Obviously, there are other considerations.
A friend of ours mortgaged a second home last year with only a very modest pension and Social Security for income.
I remember those questions...
I am too young for SS and don't get a set income off my investments..
I am in those "between years" where I am in good shape financially but seem
"unemployed"
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by kelly237
I remember those questions...
I am too young for SS and don't get a set income off my investments..
I am in those "between years" where I am in good shape financially but seem
"unemployed"
yep.... from early retirement age > 'access to qualified $$$' (age 59.5) or to SS age (62 +). a 'donut hole' of sorts for getting a mortgage.
Even tho I escaped employment at age 49, I wish I would have made it at plan A (age 35), then I would have had MUCH more experience living w/o income.
I expect there will be some yrs that I rent, and others that I own (only when working on a 'deal' to get the $250k/$500k TAX FREE capital gains every 24 months. Repeat as necessary to keep funding 'retirement') Who can argue with tax free gains? (except the rich and famous... that would not be me.... tho just eating and in good health make me QUITE rich. (at the moment). (still OWNING.... Casa Grande... really nice place, can't get her sold, so will need to declare one of my other places as 'Primary Residence' to collect $250k and pass 'GO'
SORRY there stealthrabbit ! you better get that get out of jail free card BECAUSE YOUR NOT PASSING GO TO COLLECT THAT 250K .
what your advocating about the capital gains exclusion is not true anymore on a rental and hasnt been for almost 4 years now.
in 2009 the rules changed as far as converting a rental or vacation home to a primary residence.
its a little confusing so ill try to explain it as best as i can although i think the example ill give makes it easier to understand.
As of January 2009, new tax rules require that, if you sell a home that was a rental or vacation property prior to you converting it to your primary residence ,you're eligible for only that portion of the capital gains exclusion that corresponds to the amount of time you actually lived there as your primary residence pro rated against your total ownership period. . the calculation is made over more than a five year period now as it applies back to January of 2009 .
so if i owned a rental property or vacation home prior to or bought after 2009 then the clock starts ticking on jan 2009 as my starting period..
if it was a rental for 8 years from the starting point of our clock on jan 2009 and then i converted it to my primary for two years my total ownership period is 10 years from jan 2009 if i sold it .
i would only get 2/10 of the 250k capital gains exclusion if single since out of 10 years of total ownership only 2 years were my primary and you would only get 50k tax free .
as another example if you owned it 20 years from 2009 and for two years it was your primary before you sold then you would get 2/20 the exclusion or 25k tax free.
the exception is if your home was your primary first . then if a rental you get the full deduction. thats so people who cant sell now can rent out until conditions are better.
for me living on small budget is easy to own home. since retired don't have to be close to work place in high tax area. keep busy with house maintenance, yard work, keep goats, chickens, ducks for meat, milk,eggs that itself keep you from getting bored then do things that cost money just to cure boredom.
house maintaince,yard work and farming sounds to much like work for my taste. i think i would rather just work and do what i do then all that..
when we had our second home in the rural pocono mountains we had a guy to take care of just about everything that was routine since we werent there full time .the little bit i had to do each time i came up was getting to be something i didnt want to do.
sold all my tools with the house too. they got my hammer and duct tape.
anything that was supposed to move and didnt got whacked with the hammer. if it moved and wasnt supposed to i used the duct tape.
now in our apartment when i change a bulb and i dont break the socket i want at a boys...lol
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(at the moment). (still OWNING.... Casa Grande... really nice place, can't get her sold, so will need to declare one of my other places as 'Primary Residence' to collect $250k and pass 'GO'
