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The real cost of owning a home

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Re: The real cost of owning a home

#321

Post by technothrasher »

akudha wrote: post #139
mholm wrote: post #6

Beyond the financials, the psychological impact of both being able to make greater-than-superficial changes, and having extremely predictable payments for years without worrying about substantial rent increases, is substantial. I redid/improved the bathroom to exactly what I wanted. I renovated the kitchen. I added paneling to the walls. I added a few outlets to rooms that needed more. I wouldn't do these things in a…

“Extremely predictable payments” - I don’t own a home, so I don’t know about this - I have heard mostly horror stories about HOA. Can they hike maintenance fees arbitrarily? Also, what about insurance? Last I read, at least in FL, insurance cost is out of control, is that still true?

Real estate tax is also somewhat unpredictable year to year (except that it rarely goes down), and can be a large part of your monthly payment. We got hit with a 21% increase in taxes this year because the town voted to rebuild the high school and the main road.

Luckily, at least, we don't have an HOA. Well, actually, we technically do, because we have a shared driveway with three houses on it, and legally here shared driveways are required to have an HOA. But all three of us despise HOAs, so it doesn't have any money, rules, meetings, or do anything. It's just on paper only. We have informal meetings to sort it out when the driveway needs maintenance. After just a couple meetings we figured out that meeting first, alcohol second is the correct order.

Re: The real cost of owning a home

#322

Post by mholm »

shadowpho wrote: post #109
mholm wrote: post #6

Beyond the financials, the psychological impact of both being able to make greater-than-superficial changes, and having extremely predictable payments for years without worrying about substantial rent increases, is substantial. I redid/improved the bathroom to exactly what I wanted. I renovated the kitchen. I added paneling to the walls. I added a few outlets to rooms that needed more. I wouldn't do these things in a…

> and having extremely predictable payments for years I’d argue rental is more predictable. Housing has a huge amount of upkeep — $10k ac, $5k water heater, $20k roof…

Predictable for a year or two, yes. I know how much I'll be paying a decade from now, exempting property tax and insurance fluctuations.

Re: The real cost of owning a home

#323

Post by defen »

jandrewrogers wrote: post #316
jstanley wrote: post #298

Earlier quoted context omitted.

You're missing that most people are able to buy houses on borrowed money, so their housing investment is effectively levered up 10x or more, at least at the beginning. It's not a choice between $1m in housing appreciating at 3% and $1m in stocks appreciating at 9%. It's a choice between $1m in housing appreciating at 3% or $100k in stocks appreciating at 9%.

The problem with leveraged investments is that they can put you deep underwater. Many people in Seattle that bought $1M leveraged with $100k now own a $800k asset. They've lost twice as much as they invested. They would have been much better off investing that in stocks without leverage.

Multiple people in this thread have mentioned the Seattle real estate market going to shit (for sellers) - is that related to tech layoffs or is something else going on? San Francisco's market is just as crazy as ever.

Re: The real cost of owning a home

#324

Post by monegator »

jedberg wrote: post #164

The benefit of owning a home is almost always psychological, not financial. If you take the money you'd use for a down payment and mortgage and invest it instead (after paying rent) you end up in about the same place. But the psychological benefits can be huge. You have much greater control over the place you spend most of your time. You can change it to your liking. You don't have to worry about rent increases or ow…

Yeah, no. Fuck renting. It may be ok for 5 maybe 10 years, while you're figuring yourself out, but after that it's just wasted money.

If you buy property it will be yours, forever. You will pass it down, you will be forever part of the community, and your children, and so on.

Both my parents come from big farmer families, and lots of poverty. When my grandparents managed to end serfdom in the late 50's and their rented farm became their it was a huge deal: that became the family home. Like our own castle of sorts.

But i guess it's a different culture, my country has the higher percentage of home owners in europe for a reason, whereas most of northern europe housing marked is dominated by speculation and renting agencies, among the worst sort of leeches that have ever lived.

Re: The real cost of owning a home

#325

Post by funksta »

Galanwe wrote: post #303
jedberg wrote: post #164

The benefit of owning a home is almost always psychological, not financial. If you take the money you'd use for a down payment and mortgage and invest it instead (after paying rent) you end up in about the same place. But the psychological benefits can be huge. You have much greater control over the place you spend most of your time. You can change it to your liking. You don't have to worry about rent increases or ow…

> If you take the money you'd use for a down payment and mortgage and invest it instead (after paying rent) you end up in about the same place. That is not the right way to see it. If you have the cash to buy upfront, then yes, real estate is not that good an investment, unless you have a loaded portfolio already and want to diversify a bit, get some high inflation hedge, etc. The real value of buying a home is lever…

Leverage is great when prices are increasing, but not when prices are moving in the opposite direction. The recent 40-year trend of decreasing interest rates lulled a lot of people into the belief that real estate leverage is an unalloyed good.

Re: The real cost of owning a home

#326

Post by Mezzie »

c0nsumer wrote: post #205
JuniperMesos wrote: post #184

Earlier quoted context omitted.

> There’s also a psychological benefit of not having to worry about most problems. Sink broke? Call landlord to fix. Roof leaking? Call landlord to fix. And so on. You never have an unexpected $20k repair show up. I've never understood why people argue that the model of appealing to a landlord to perform house work is psychologically superior to doing that same work yourself. As a tenant, you have an inherently somew…

You illustrate this nicely. Just something as simple as "that ceiling fan doesn't work so well, and squeaks once in a while when on high" can easily be remedied yourself when owning the house by just going buying and installing a new ceiling fan. Regardless of how handy one is, with a landlord that's generally not allowed without permission, the landlord often won't install as nice of one as you might like, etc. This…

If you live somewhere long enough and under a negligent enough landlord, you can just do a lot of those upgrades anyway and either take them with you when you leave or just chalk them up to practice for when you own a place.

I've lived in my current apartment for 9 years and I've never met the guy who owns it now (it was sold). I'm also not getting my deposit back, so that doesn't matter.

It's the big stuff that's annoying. Can't install A/C or an exhaust fan in the bathroom, for example, simply because I can't afford it. I'd totally feel comfortable upgrading the stove/fridge and tossing theirs or putting it in the basement. They're not going to find out until I move out anyway.

Re: The real cost of owning a home

#327

Post by kylehotchkiss »

1970-01-01 wrote: post #305

Completely missed the tech-heavy features of owning your own home: Wire your network however you like. Those walls are yours. Invest in as much solar power as you want. The only limit is the sun itself. Want to be a Ham? Be a ham. The antenna goes wherever you want. Charge your EV as long as you want. The EV charger is yours and only yours. Also, do you want a cat? A dog? A massive tree? Just get it. Nobody can say n…

For virtually all new construction in USA, HOAs influence a lot of your freedom in these items

Re: The real cost of owning a home

#328

Post by yardie »

akudha wrote: post #139
mholm wrote: post #6

Beyond the financials, the psychological impact of both being able to make greater-than-superficial changes, and having extremely predictable payments for years without worrying about substantial rent increases, is substantial. I redid/improved the bathroom to exactly what I wanted. I renovated the kitchen. I added paneling to the walls. I added a few outlets to rooms that needed more. I wouldn't do these things in a…

“Extremely predictable payments” - I don’t own a home, so I don’t know about this - I have heard mostly horror stories about HOA. Can they hike maintenance fees arbitrarily? Also, what about insurance? Last I read, at least in FL, insurance cost is out of control, is that still true?

A HOA on a house never made sense to me. There are no amenities they provide worth what you pay. Condos in are different story. You're using shared resources in a limited space. Condos in a bustling urban core are great. A condo in the middle of the suburbs makes no sense.

Re: The real cost of owning a home

#329

Post by Leherenn »

malfist wrote: post #11

This is nonsense. The person counts the 12 month escrow prepayment during closing as "cost to get a loan" It's not. It's the cost of 12 months of taxes and insurance on your property. Also notable is the "1 year insurance premium" either they're double counting the escrow, or this 1 year insurance premium is mortgage insurance where the bank makes you take out insurance to protect them. This can be prepaid, split pai…

As a non American, I have to admit a lot of things sounds very weird to me, especially on the "mortgage loan fees" part.

In particular, the title part sounds horrible (and expensive). As far as I know, over here it's all handled by the state, no insurance required. I don't know if it's because of different laws regarding future claims (the registry is the truth, too late to change it?) or just better records?

Same with tax/insurance escrow, you just pay directly as it comes, but since we have essentially no property taxes, it's probably not required?

On the other hand, here mortgages only have a closing fee (and quite often even none at all, with all the small fees being invisible and rolled into the margin), so that transparency is welcome.

Re: The real cost of owning a home

#330

Post by darknavi »

dividefuel wrote: post #315

Beyond financial costs, I was caught off guard at how much time home ownership took up. House maintenance and projects have taken up most of every single weekend of mine for the past few years. Part of it is simply that I bought a house with more space than the places I usually rented. More to clean, more to maintain, more things that can go wrong, etc. But the biggest thing is that I'm the only one in charge of main…

> House maintenance and projects have taken up most of every single weekend of mine for the past few years.

Mine come and go but it's no where near every weekend since I've purchased in 2019. What sort of things occupy this much time?

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