Is owning a home mostly a bad thing?

[Mav88]

Ownership of your residence has considerable use value, as I explained, for example being able to do it up how you want, make alterations, decorate, know you won't get evicted by a landlord, being able to keep who you want on the property (e.g. pets, sharers etc). So it is not an investment in the same way that a stock, bond, gold etc are investments.

That's it right there. People keep ignoring upkeep and all the accesories you buy with a home over renting (my lawn alone cost north of a grand last year), so that even with the tax break I am losing money over renting. However if my money isn't to make my life better, then what the hell good is it?

An apartment would save cash but my sense of peace would suffer.

 

[blackjack007]

most people here arguing in favor of buying have forgotten to include the opportunity cost of the down payment. here in Calif, you'd have to put down $200k to 300k to buy a mediocre house now. if the renter makes 10% annually by investing it, he comes out ahead over the long run. of course this is ET where 10% is easily accomplished!!

financially, renting is better. but practically speaking, owning has advantages like stability and more housing options. as i mentioned before, if you are looking at the high end, you have no choice but to buy because there are few rentals available

 

[NetTecture]

It totally depends where you are in your life. House purchase s not a trader / stock investor type of deal. It ties you down to a place, you can not move on.

Financially it may make little sense, but finance is not all in this regard. I was living all my life as renting out person, because i never wanted to settle. Now I plan on settling, and I am planning on building a house. Totally wasted money from a financial point of view, but I want a place to settle down, know I can have children there, wake up in a beroom that looks great and have an office area in the house that supports all my operations.

Money (as investment decision) does not even enter into my decision here.

 

[Bolts]

Quote from peilthetraveler:

No you cant save 1k without borrowing. You still need $1k to pay your rent. How can you save that if you have to pay it to your landlord every month...meanwhile the homeowner who has a $1k payment its broken down like this (assuming you have a pretty new mortgage) $250 for principal, $500 for interest, $250 for taxes/insurance.

So to break it down...the renter loses $1000 every month that he will never see again. The homeowner loses $750 every month that he will never see again. (and of course over time, that interest payment will be less and less) In 15 years, perhaps the homeowner is only paying $300 per month in interest and getting $450 per month paying towards the principal. Meanwhile the renter has had 15 yearly rent increases and is likely paying $2k per month now. Homeowner is really only losing $550 per month that he will never see again, while the renter is losing $2,000 per month that he will never see again. Homeowner now can save $1,450 per month 15 years later to invest, or pay down the house. Renter can only invest what he can save AFTER he pays $2,000 in rent.

I'm not talking about saving 1k over ownership expenses. I'm talking about saving as in building net worth. A guy makes $3000/month at his job, he spends $1000 on rent and $1000 on other expenses, he saves $1000.

Sure it's easy to imagine hypothetical scenarios where buying is a better value, but it tends to not be for all the reasons mentioned on the previous 9 pages of this thread. Worth a read.

 

[Trader666]

The same guy could still do that with a mortgage and build equity in his own house instead of paying off his landlord's house.

Quote from Bolts:

I'm not talking about saving 1k over ownership expenses. I'm talking about saving as in building net worth. A guy makes $3000/month at his job, he spends $1000 on rent and $1000 on other expenses, he saves $1000.

Sure it's easy to imagine hypothetical scenarios where buying is a better value, but it tends to not be for all the reasons mentioned on the previous 9 pages of this thread. Worth a read.

 

[Bolts]

Quote from Trader666:

The same guy could still do that with a mortgage and build equity in his own house instead of paying off his landlord's house.

Those numbers are very misleading. The average home owner has owned his home for many years. The average renter is much younger. He simply hasn't had time to build wealth. He could be fresh out of college with student loans to pay back. Wouldn't have surprised me if the average renter had a negative net worth. Those numbers don't show you how much wealthier the average home owner could be if he had rented instead.

Oh, and renters also include people who are forced to rent because they have a poor net worth to begin with, so they can't get a loan. So for them it's the poor net worth causing them to rent, not the renting causing the poor net worth. Correlation does not imply causation.

 

[dandxg]

Quote from Mav88:

That's it right there. People keep ignoring upkeep and all the accesories you buy with a home over renting (my lawn alone cost north of a grand last year), so that even with the tax break I am losing money over renting. However if my money isn't to make my life better, then what the hell good is it?

An apartment would save cash but my sense of peace would suffer.

As I mentioned in a different, related thread I would happily live in a apartment if they were well built like in Europe. Solid Concrete, double pane windows with a much larger air gap for insulation than the crap here. The only way to get it here is move into an expensive high rise which costs more than my house now. Prof Logic was correct building ICF concrete is the way to go.

 

[IanMacQuaide]

I'm beginning to think my renters have a better deal than I do.
Maybe I'll move to a rented house, and rent out the one I'm buying.

 

[bestautomatedtr]

Quote from IanMacQuaide:

I'm beginning to think my renters have a better deal than I do.
Maybe I'll move to a rented house, and rent out the one I'm buying.

owning a house is a best thing, you can do with this what you want and don't bother any1 else, have good your own view in your house

 

[WhiteOut56]

Quote from tomdavis:

A mortgage is an "enforced savings plan," especially if you finance for a reasonable period of time. We used a 15-year mortgage and now own our house free and clear.

-------- that's a very good point