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The real cost of owning a home

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Re: The real cost of owning a home

#451

Post by hibikir »

pc86 wrote: post #362
colordrops wrote: post #337

Earlier quoted context omitted.

Not gp, but I bought a fixer-upper and it was at least weekends for the first two years, then slowed down quite a bit after that. Now it comes in fits and starts similar to you.

This is the answer - there are plenty of move-in ready, turn-key homes that require basically zero maintenance unless you want to remodel or change something, but those cost more (sometimes a lot more) than the ones that need more TLC or true fixer-uppers.

Eventually the maintenance comes back again: The turn-key homes have typically had most of the things that needed maintenance replaced, but they eventually come back, and they can be quite the headache. See the wonders of having a plumbing stack going past its useful life, land resettling leading to having to do regrades, or lift concrete slabs, or just general tree maintenace.

Re: The real cost of owning a home

#452

Post by notnaut »

wwweston wrote: post #365
Galanwe wrote: post #303

Earlier quoted context omitted.

> 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…

Love that the two most solid pro-homebuying points I've ever encountered (jedberg's about the psychological benefits, yours about leverage) immediately surface in an HN discussion. It's probably worth making a closer comparison though: * Buying a House on Loan: commit to paying off a $450k loan over 30 years at 5% interest, with an immediate $50k down payment and the home itself as collateral. So ~$2500/mo payments,…

Uhhhh where are you getting that $2500 a month to invest? That’s your landlord’s money, dawg. And they’re gonna expect at LEAST another $100 year over year if you don’t want to move.

Re: The real cost of owning a home

#453

Post by Aeolun »

I don’t share this experience at all. I bought a fully finished new house in Japan, and I haven’t had to do or pay anything extra (other than mortgage and yearly tax) for the past 6 years.

Maybe it is different if you buy an old house?

Re: The real cost of owning a home

#454

Post by no_wizard »

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…

Condo is suppose to be that nice hybrid but they became enshittified long ago and have routinely proven to be bad deals for the average buyer in too many circumstances.

The US doesn’t understand how to make the housing market functional. I’d love to have a condo where a great many things are handled by the association but the math never maths, as they say, and a great deal of the issues is because condo associations aren’t well regulated and they often don’t account things correctly.

Re: The real cost of owning a home

#455

Post by blackjack_ »

darth_avocado wrote: post #425
alistairSH wrote: post #393

Earlier quoted context omitted.

Yard work, gutter cleaning, power washing exterior, cleaning windows, bi-annual HVAC service, exterior paint (especially if the house has any wood) and trim upkeep. And as the house ages, you get things like repainting interior rooms, more frequent plumbing issues, major HVAC repairs, roof replacement, repaving driveway, electrical upgrades, remodeling, etc. We downsized to a townhome to avoid some of that (half the…

If you have a big enough yard, yard work in itself is a constant stream of work even if you have all the right equipment

I have 2/3rd of an acre, but most of it is a 45 degree hill, so it's more like a full acre equivalent of flat ground (except drastically more of a pain). Pulling weeds up several hundred feet of steep hillside that grow back constantly is a punishment worthy of Sisyphus.

It hadn't been done for about 5 years when we moved in, so one of the neighbors spent 200 hours cleaning it up for us. Not joking, 200 hours of labor. Scotch Broom is a literal nightmare.

Re: The real cost of owning a home

#456

Post by abalashov »

no_wizard wrote: post #454
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…

Condo is suppose to be that nice hybrid but they became enshittified long ago and have routinely proven to be bad deals for the average buyer in too many circumstances. The US doesn’t understand how to make the housing market functional. I’d love to have a condo where a great many things are handled by the association but the math never maths, as they say, and a great deal of the issues is because condo associations…

I had this, but as you say, it's risky. I do like renting condos, though -- not my problem either way.

Re: The real cost of owning a home

#457

Post by barchar »

wwweston wrote: post #365
Galanwe wrote: post #303

Earlier quoted context omitted.

> 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…

Love that the two most solid pro-homebuying points I've ever encountered (jedberg's about the psychological benefits, yours about leverage) immediately surface in an HN discussion. It's probably worth making a closer comparison though: * Buying a House on Loan: commit to paying off a $450k loan over 30 years at 5% interest, with an immediate $50k down payment and the home itself as collateral. So ~$2500/mo payments,…

Eagh, the leverage really isn't that cheap, and you can think of renting as giving you cheap leverage too (it's just your borrowing the house instead of the money).

Re: The real cost of owning a home

#458

Post by jp191919 »

alistairSH wrote: post #375
wwweston wrote: post #365

Earlier quoted context omitted.

Love that the two most solid pro-homebuying points I've ever encountered (jedberg's about the psychological benefits, yours about leverage) immediately surface in an HN discussion. It's probably worth making a closer comparison though: * Buying a House on Loan: commit to paying off a $450k loan over 30 years at 5% interest, with an immediate $50k down payment and the home itself as collateral. So ~$2500/mo payments,…

The one thing missing from that calculation... the rent goes up over the 30 year period while the mortgage is fixed (subject to changes in tax rate and insurance as value hopefully increases). 9 years into my current home and my 20 year mortgage is substantially less than renting a similar house in the same subdivision. And because it's 20 year, the interest rate is lower, and when I retire, I'll only have to cover t…

Exactly. After 8 years there is absolutely no way I could rent a comparable house in my area for what my mortgage costs.

Re: The real cost of owning a home

#459

Post by hawaiianbrah »

mchusma wrote: post #449
abalashov wrote: post #431

Earlier quoted context omitted.

True, but you still have to cough up. The benefit of renting is that it's an SEP (Someone Else's Problem).

There are also home warranties or tech solutions/concierges like tidy.com. The issue historically is that these concierge things are expensive (should be solved by tech/ai) and the warranties create their own class of problems (claim frustrations etc). But home ownership is expensive, no way around it. But the work in coordinating etc doesn’t fundamentally need to be.

Yep, I debated mentioning home warranty services, but that is also a thing a lot of folks surprisingly don’t know about.

Re: The real cost of owning a home

#460

Post by woopwoop »

I got my mortgage at 2.5% interest. The mortgage was about equal to all of the cash I had before buying, and I'm pretty sure I could (and should) have gotten a much larger mortgage before buying. Mortgages are essentially the only way for ordinary people to access that kind of credit. That's why buying a house is such a good deal. No one's lending an ordinary 30-year-old hundreds of thousands of dollars at 2.5% interest to plow into the S&P 500.

Of course, this kind of credit is _incredibly_ risky. People don't think of it this way, but a mortgage is essentially a massively leveraged bet on your local housing market. Which is already gives your risk profile an incredible lack of diversity. The most valuable thing you "own" in the time of your life when you buy a house is usually your future earnings potential, and your house will be the second most valuable thing you own. The thing is, both of these things are highly correlated with your local economy, so buying a house doubles down on your already high exposure to local economic conditions. People think of owning a home as a kind of boring, safe, low risk/low reward investment, but it's really exactly the opposite.

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