Owning a home -- worth it?

[Danny83]

Owning a home is much better then paying somone elses mortgage

[Sprta]

Originally Posted by 1st amg

I am in the real estate management/property management for multi residential, ie apartment buildings. We have tenants coming to us getting out of home ownership because, they make one payment for the month....rent. They don't pay for water, they don't pay for hot water, they don't pay for heat(gas). Therefore, they don't have to deal with the increases every year that these utilites throw at you. Then, they don't have to cut the grass or find someone to do it, they don't have to pay for the snow removal of their parking space or lot. There is no bank to deal with for mortgage payments or increases, the insurance is only for apartment insurance which typically is about $50 per month. Then, there is zero money paid out for repairs, such as clogged drains, dripping water faucets, light fixtures or switches, wear and tear for flooring is replaced by us the landlord etc. So, it is a lifestyle choice that works for many. You could also pocket alot of money for your retirement.

Don‘t you think all of the above is factored into the monthly rent which can increase substantially from lease to lease. And you can only pocket money if the financials favor renting which is not a given. Plus zero equity when renting.

[mfer]

Let me pose this question. Do people who own rental properties do it for fun or for money? ( rhetorical )

Real estate is highly dependent on each individual market. That market can vary from one block to the next. Hence the location, location, location thought.

I always buy “hot” houses in good locations. Each time I’ve had to sell (3), I’ve sold in under a week. If I listed my house now, it would sell in a day because of the location and because of the layout/livability.

In almost all cases however you have to be permanent. I mean you don’t plan on moving in 6 months. Many of the costs come with the sale/purchase.

When you make your mortgage payment to, not all of that is throw away. Principal adds up nicely. I understand the need for 30 year loans but I think as people age (not all cases apply but I’m making a generalization) they should really not be getting 30 year loans again. This thought makes people really overspend on their home. Just because you can make the payment doesn’t make sense. It is all a balance.

One more benefit of home ownership. Any income from the sale of your primary residence is tax free (250k single 500k joint if lived in 2 of 5 years). Makes location even more important.

[Dan Pierce]

In our 2nd home for 18 years and paid it off a few months ago. A nice place to be.
dP

[brandrea]

Originally Posted by Dan Pierce

In our 2nd home for 18 years and paid it off a few months ago. A nice place to be.
dP

Congratulations Dan, mortgage free is a great feeling

[Dan Pierce]

Originally Posted by brandrea

Congratulations Dan, mortgage free is a great feeling

Thanks, Brian!

Yes it is.
dP

[JasoninDenver]

My rules...

1. Only buy in down markets.

2. Only buy when I plan on living there for 5-10 years at least.

3. Buy a home that I can also gain some sweat equity (just because I enjoy working on my places)

4. Treat my 30 year mortgage like a 15.

I have watched some friends lose hundreds of thousand making stupid decisions like jumping into a hot market thinking they would miss the boat.

[MonBK]

Originally Posted by Dan Pierce

Thanks, Brian!

Yes it is.
dP

Well deserved my friend.

[rolexpatek363]

My last place more than trebled in value in 20 years, meanwhile I paid off the mortgage. UK market is nuts though.

[andromeda160]

my girlfriend owns the house we live in, mortgage is very reasonable, house is outrageously expensive for what it is though, $250k for 1,400 sq ft. I want to get something bigger with more land myself, the neighbors asked us to close the blinds as they can see everything the other day. fairly embarrassing, a bit more privacy would be nice. couldn't see myself ever renting again though, always a drag living to others restrictions

My sister bought a house for $180k, which was 50-100k less than what she could part the lot out for and sell the house. I rented out the bottom floor and did a lot of improvements(got rid of the asbestos flooring, painted everything, and renovated almost the whole thing before my girlfriend asked me to move in. as long as you buy right, seems to be the way to go, but I don't mind fixing stuff. sweat equity is always a nice addition.

[JUSTIFIED]

Originally Posted by Dan Pierce

In our 2nd home for 18 years and paid it off a few months ago. A nice place to be.
dP

Congrats and that must be a nice feeling. It was the plan for till the big D occurred.

But I am wondering.... if you add up the cost of taxes, insurance, maint, replacing big ticket items, etc. is it really cheaper than renting? Plus, you could cash out and invest that money at a far better ROI. Therefore, I believe it's not only about having a house that is paid for, but the intrinsic value of owning your own home, which is certainly a great reason for doing so.

For me, it's not just about the cost, either. I just don't want the hassle of fixing one thing after another, fighting it out w/ the county over taxes, finding out that my mortgage is increasing by $300 due to some escrow screw up, etc. I am sitting here right now with nothing to do except whatever I want to do. Maid cleaned the apt. last night ($60 a pop) and I am just chilling. I never felt that way when I owned a house.

On top of that my credit score is 840, cash in the bank (and some invested), a car an motorcycle payment and no other debt. And...I know exactly what my out of pocket expense for my home will be next month and for the next 6 months. Taking on a house would change all of that.

That's my scenario. Again, everyone's is different and total respect for that.

[Ballzzz]

Originally Posted by Danny83

Owning a home is much better then paying somone elses mortgage

Agreed 100%, problem is a lot of people don’t want any variables and for those variables they are willing to pay the landlords there profit.

[bdex75]

Biggest thing for us has always been that we don’t live in an area where there is a (or any for that matter) supply of houses to rent. And the demand for single family rentals far outpaces the supply.

When we first moved to this community a few years ago we looked for a place to rent so that we could find land and build as this is likely where we will stay long term. There was 1 rental house that was big enough to hold our 4 person family that would let us keep our pets (that was non negotiable). And the rent was almost double what my mortgage is.

Then there is that Pet issue. We had 2 dogs (One has since passed) and 2 cats (which I don’t much care for, but we made a commitment to them). We will always have a dog as I need the stress relief they provide. I cannot do tiny dogs and most apartments and rentals do not allow bigger dogs.

The financial side could be debated until the cows come home but at this point in our lives owning a home is the right decision for us.


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[GB-man]

Originally Posted by HorologyK

Location, location, location. Stay put for at least seven years. Otherwise, it's a crap shoot.

Agreed.

You can generally change everything about your house except where it’s located.


Aside from that, it just feels good to own your home. But, if I were in your shoes and single looking for freedoms a condo or apartment could make sense.

[GB-man]

Originally Posted by bdex75

Biggest thing for us has always been that we don’t live in an area where there is a (or any for that matter) supply of houses to rent. And the demand for single family rentals far outpaces the supply.

When we first moved to this community a few years ago we looked for a place to rent so that we could find land and build as this is likely where we will stay long term. There was 1 rental house that was big enough to hold our 4 person family that would let us keep our pets (that was non negotiable). And the rent was almost double what my mortgage is.

Then there is that Pet issue. We had 2 dogs (One has since passed) and 2 cats (which I don’t much care for, but we made a commitment to them). We will always have a dog as I need the stress relief they provide. I cannot do tiny dogs and most apartments and rentals do not allow bigger dogs.

The financial side could be debated until the cows come home but at this point in our lives owning a home is the right decision for us.


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Haha my mom sent me an article stating that millennials were buying homes not because of family planning but because of their dogs!

I did the same after getting kicked out of my apartment for buying a boxer. Four years later our home has increased in value by about 50% so it worked out

[rebel_1]

I paid my house off a few years ago and I think that caused my credit score to tank! My score went from low 800s to high 600s. I couldn’t believe it! Oh well, to the OPs question, I have been living in apartments half the time for a few years due to work and I do like it. Especially, I like being able to change locations without the hassel of buying and selling a house. IMHO, unless it’s a permanent situation, renting is better because unless you tie up your capital, the real people that make the money are the banks and realtors.

[ejvette]

It’s the American dream !


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[Baco Noir]

We are home owners and are happy about it. I’ve built a waterfall in the backyard and a wine cellar in the basement. We’ve remodeled the kitchen and bathrooms over the years so the house is customized to our likings and is a spot of serenity in an otherwise hectic life.

We also have a 50% sure in a house in the mtns that we’ve recently remodeled with friends so it’s also a cozy place to relax when we get out of town.

You can’t do these things with rentals.

[Thatguy]

Originally Posted by andromeda160

my girlfriend owns the house we live in, mortgage is very reasonable, house is outrageously expensive for what it is though, $250k for 1,400 sq ft. I want to get something bigger with more land myself, the neighbors asked us to close the blinds as they can see everything the other day. fairly embarrassing, a bit more privacy would be nice. couldn't see myself ever renting again though, always a drag living to others restrictions



My sister bought a house for $180k, which was 50-100k less than what she could part the lot out for and sell the house. I rented out the bottom floor and did a lot of improvements(got rid of the asbestos flooring, painted everything, and renovated almost the whole thing before my girlfriend asked me to move in. as long as you buy right, seems to be the way to go, but I don't mind fixing stuff. sweat equity is always a nice addition.

Lol. $250k for 1400sf as outrageously expensive. If we could find 1400 sf for double that we would buy tomorrow. Out here a 1400 sf SF is about $900k.
That is our issue. If we have to move in a couple years and the market drops it could be very expensive.....


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[Reddy_Kilowatt]

Originally Posted by brandrea

In my opinion, owning a home is a lifestyle shoice, plain and simple. To each their own

This.

[The Libertine]

Originally Posted by Danny83

Owning a home is much better then paying somone elses mortgage

Truth.

[RXAPPP]

I’m not certain even owning an apartment makes sense TBH. I live out with my home country for work and move around every 5 years so have rented for the longest time. We sold up back home earlier this year and are currently contemplating our next move but arefirmly on the fence

[Bigblu10]

Originally Posted by Danny83

Owning a home is much better then paying somone elses mortgage

You never truly own it until the bank mortgage is paid 100% in full.

[bing240sx]

I own a couple properties and have been very happy with ownership. However, were I not married with children I would live in the cheapest accommodations I could and I'd just ball-out all of the time with all of the free cash flow.

[JUSTIFIED]

Originally Posted by Bigblu10

You never truly own it until the bank mortgage is paid 100% in full.

Yep. And then you must still pay for taxes (on all that appreciation), insurance and maintenance. I've run the numbers and I honestly do not believe you come out ahead financially by owning (exceptions certainly exist), but that assumes that you rent affordably & invest the difference.

Agree w/ the "owning is a lifestyle choice" sentiment, which is the intrinsic value I mentioned in my OP.

A lot of interesting answers, but am surprised that so many ardently believe owning is better financially than renting.

[JUSTIFIED]

Originally Posted by bing240sx

I own a couple properties and have been very happy with ownership. However, were I not married with children I would live in the cheapest accommodations I could and I'd just ball-out all of the time with all of the free cash flow.

[dddrees]

Being mortgaged free for about 8 years and not having to bother with a monthly payment, HECK YA!!

My worst maintenance year to date still does not equate to a full year of rental or mortgage payments.

I’ve lived here for about 12 years and very likely will be here until I expire.

[Rb10chris]

Condo life depending on where you live can be better than apartment living, my area has a nice community center, couple of pools, parks, places for kids to play. I guess for me its worth the extra freedom and peace of mind that if I put a hole in the wall or floor, the only person that cares about it is me. Plus paying an HOA for pool/park maintenance, gardening and exterior care basically takes away a lot of the homeowning headaches. If you can get into a situation where you pay less to own and get those benefits, I think it is a much better situation. Plus mortgage interest/prop tax deductions.

[austinp]

Originally Posted by bing240sx

I own a couple properties and have been very happy with ownership. However, were I not married with children I would live in the cheapest accommodations I could and I'd just ball-out all of the time with all of the free cash flow.

Hard to argue with that!

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[Spartacus]

Originally Posted by Danny83

Owning a home is much better then paying somone elses mortgage