Home Ownership: the path to slavery

Hey genius, you owe 280K the Fed prints money and uppps you got fired! The house goes gets back to the bank and you are pissing against the wind. All the while the guy who paid of that 280K is ready to buy your house as a rental for 60cents on a dollar (or better). :D :D

I'll take paid off house over tax benefits any day of the week. Living in a tent city or in a homeless shelter is way over rated and not that sexy when you got kids.
 
Everyone has to set their own priorities, if home ownership isn't yours then rent.

Financial aspects aside, renting isn't like owning, there is only so much effort you are going to put into improving & customizing a place that isn't yours.

Cars are almost always a lousy investment but I bet many people on this site don't drive safe, inexpensive, boring cars.

You only get one life - enjoy yourself.
 
Quote from wilburbear:

With home ownership you also have to run a gauntlet of leeches.

1)Real estate commissions

2)Property taxes (increasing now, to fill budget gaps)

3)Fire, flood, etc. insurance

4)Interest on mortgage (yes, tax deductible, but that doesn't nullify all outflows from interest payments).

5)Closing costs

6)Inspection fees

7)Property upkeep

8)Neighborhood association fees

9)Security sytems

These are just a few I thought of off the top of my head. Add more.

Housing: "Industry of Leeches"
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As opposed to what? Renting? When you rent your landlord has to pay all those expenses. Guess who gets to pay those expenses in the end. You do.
 
Quote from drjekyllus:

As opposed to what? Renting? When you rent your landlord has to pay all those expenses. Guess who gets to pay those expenses in the end. You do.
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They are still a liability. In a poor market, owner might not be able to rent for enough to cover his nut...
 
Quote from saxon22:

Hey genius, you owe 280K the Fed prints money and uppps you got fired! The house goes gets back to the bank and you are pissing against the wind. All the while the guy who paid of that 280K is ready to buy your house as a rental for 60cents on a dollar (or better). :D :D

I'll take paid off house over tax benefits any day of the week. Living in a tent city or in a homeless shelter is way over rated and not that sexy when you got kids.
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So if I remove $280K from my bank account to pay off my house early, I'm in a better position to buy a house in a depressed market? And if I keep my $280K and lose my job, why couldn't I ride out the storm on my savings? And inflation is obviously a risk over the next decade or longer. Who's hurt more with that $280K note when inflation is in a death spiral? The bank or me?

With a cheap loan like a 5% mortgage, I'd rather keep my money, invest it and use the tax credit on the interest. Maybe I'm way off base here.
 
Like any market, you should aim for value and try not to take on a big mortgage (and feed the fat bankers). I bought a big old house 9 years ago for peanuts. How come? Because it's not in a 'trendy' area. Town is a bit of a dump, but not too many social problems, just ugly. Surrounded by woodlands and countryside though, so I never go into town and enjoy the fresh air as often as possible. Living cheap gives me freedom with a tiny mortgage.
 
Quote from 4444CJones4444:

So if I remove $280K from my bank account to pay off my house early, I'm in a better position to buy a house in a depressed market? And if I keep my $280K and lose my job, why couldn't I ride out the storm on my savings? And inflation is obviously a risk over the next decade or longer. Who's hurt more with that $280K note when inflation is in a death spiral? The bank or me?

With a cheap loan like a 5% mortgage, I'd rather keep my money, invest it and use the tax credit on the interest. Maybe I'm way off base here.
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You do what you want. Some people get a hard on looking at numbers on their bank statement thinking how much $$$ they got. It is a free country. However, having a house paid off is IMHO a much safer situation than having a mortgage. That 280K paid off gives you freedom and stability. If you prefer to keep paying that note off for the next 30 years which will cost you 500K in the end, assuming nothing bad happens along the way which would force a removal of you and your family from the property (the dreaded f word), then have at it.
 
Quote from dandxg:

A good related thread. http://www.elitetrader.com/vb/showthread.php?s=&threadid=180709

So if I pay off my mortgage what do I when I want the money and it's tied up in illiquid investment?
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1. Well, that means that you bought a house that was too expensive since really the money you have invested in that property is needed somewhere else.

2. Sell the place and either buy a smaller house, a condo or start renting.

3. I still remember when I rented my first apartment, it was $264 a month, now it probably goes for at least a $1000.

4. You should not think of your house as an illiquid investment. Do you consider a car as an investment? A house is a place to live and grow your family, not some magic trick that will make you rich in 30years.
 
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