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The real cost of owning a home

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Re: The real cost of owning a home

#671

Post by AnthonyMouse »

asdff wrote: post #470
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…

>But the biggest thing is that I'm the only one in charge of maintenance. There's no one person I can call for every single problem. Keeping track of regular maintenance, performing that maintenance, and learning how to DIY things takes a lot of time. And even if I want to pay someone to do it for me, I still have to research contractors, coordinate estimates, and schedule the project. And I still need to learn enoug…

> Seemingly he can do every trade. He's under the building doing plumbing or electric one day. Landscaping the next.

Doing this is basically illegal in modern day. The requirements to get even one trade license, much less more than one, are set up to make it uneconomical unless that trade is your full-time profession. Who can justify doing a multi-year full-time apprenticeship in each trade when they expect to spend 85% of their time mowing lawns and painting decks and other things that aren't that trade?

There are still people who do it, of course, but then you're stymied by their inability to lawfully advertise their services.

Re: The real cost of owning a home

#672

Post by drcode »

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…

[dead]

Re: The real cost of owning a home

#673

Post by mizzao »

iteria wrote: post #380
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,…

A house is an inflation hedge. Any calculation about investing the difference has to subtract the rent you are paying and rent goes up every year. There is no where where you can pay a rent anywhere close to what I'm paying for my mortgage in my area and I'm only 5 years into this. Of course I lucked out by locking in that sweet sub-3% rate, but still, I find it hard to believe that over time if you took the money yo…

Don't forget the mortgage interest deduction as well, which is a huge subsidy for those who can afford to buy.

Re: The real cost of owning a home

#674

Post by stego-tech »

xnx wrote: post #249
stego-tech wrote: post #241

This is an excellent post for folks just getting into the homeownership racket: what is pitched as a necessity for wealth creation and an “easy” transaction with nothing but upsides is - unsurprisingly - a nuanced and complicated financial transaction that has no guarantee of upside. A few things I’d note to add more data points to the pile: * Property tax caps like the OP discusses are likely to go away in the near…

The ponzi scheme of property-values-always-go-up only holds when population is increasing. In the US, immigration and fertility changes are bringing population growth to a halt. Good news: We may yet enter an era of housing abundance!

Yes and no, at least in the USA. Thanks to companies rug-pulling with RTO, the populace won’t leave cities again this generation regardless of how cheap other places might be; we have to stay near the place of employment, and those are predominantly in cities.

Frustratingly, cities have a housing crisis in that there’s not enough stock to meet demand - period. We can carve up the rationale in a variety of ways (too expensive, too many vacant units held hostage for investing, NIMBYs, red tape, etc), but the blunt truth is that companies and the government have made it abundantly clear that the only chance at a successful career is in a major metro, and thus more folks will move to them seeking their lottery ticket to the middle class.

So what ends up happening is rural areas will continue to thin out due to a lack of local work to support existing workers as well as a dearth of remote work to allow city salaries to come back to Small Town USA and prop up businesses through outsized taxes and spending. This will cause a contraction, forcing more locals to cities, deflating rural property values further while cities keep struggling with a lack of supply.

The silver bullet - the only silver bullet for any crisis we’re currently facing - was widespread remote work allowing humans to relocate based on preference rather than career need, and thus alleviate urban sprawl and revitalize smaller communities. Capital and Government have killed that dead, and there’s no way to bring it back.

Re: The real cost of owning a home

#675

Post by siavosh »

There should also be a counter article titled the real cost of NOT owning a home. At least in the macro sense, there are consequences for a generation spanning the global that is willing but unable to afford to purchase a home.

Re: The real cost of owning a home

#676

Post by chongli »

blackjack_ wrote: post #455
darth_avocado wrote: post #425

Earlier quoted context omitted.

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 labo…

Why not get rid of most of the grass (especially on the hill) and put in a perennial garden of hardy (for your zone) shrubs and trees?

Re: The real cost of owning a home

#677

Post by mizzao »

Der_Einzige wrote: post #385
Our_Benefactors wrote: post #129

Earlier quoted context omitted.

Of course, you should never sell the car to the dealer and should always make the effort to sell private party, which will often get you 50% or more greater than the dealers best offer.

The amount of people who refuse to do private party sales and who insist on losing money by trading into the dealer is mind boggling. Americans really get extremely stupid when car related anything comes up.

Time is money, and it's easier to negotiate with a dealer from whom you're buying a car than to coordinate many meetings with randos on Craigslist.

Re: The real cost of owning a home

#678

Post by strix_varius »

notepad0x90 wrote: post #632
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…

Even psychologically, i don't get it. you're still renting, except insurance and property taxes replace your rent, even if you pay it off fully.

Insurance and property taxes will never decide to occupy the house and force you to move from your home despite being willing and able to pay.

Re: The real cost of owning a home

#679

Post by 01100011 »

hunterpayne wrote: post #594
01100011 wrote: post #500

Earlier quoted context omitted.

I'm fine with keeping most of my post-tax cash pile in cash equivalents. I don't think you understand investing if your only measuring stick is returns. You do sound like a finance bro though given you took time out of your day to trash talk someone for something they didn't even claim.

If your investment return is less than the rate of inflation, you are literally getting poorer. Sort of defeats the purpose of an investment. It isn't much better than literally keeping it in your mattress. Just because you don't understand that, doesn't make it not true. And software I wrote probably has managed or touched your money at some point.

Ok, and? You don't manage money. You don't seem to understand risk tolerance and opportunity cost. You're also comparing near-inflation returns with cash at zero pct return.

I can see why you only write software and don't actually get to touch other folks' money. Good luck buddy.

Re: The real cost of owning a home

#680

Post by strix_varius »

doom2 wrote: post #240
com2kid wrote: post #9

It is suggested to set aside 1%-3% of your home's overall value for repairs every year. Most people do not do this, and many homes thus slowly degrade in value. It is a fast track way to destroy potential generational wealth. Home repair issues also tend to be bursty (rule of three...). You'll have a few years of nothing that'll lull you into a false sense of security, then suddenly three major issues will come up. S…

This has been us the past few years: * Fall 2024: we had to get star bolts[1] installed to reinforce our front wall - $24k * Spring 2025: our (finished) basement flooded, requiring a French drain to be installed and the basement restored - $18k * Ongoing repairs to our roof to address leaks - $8k Just a seemingly never ending stream of major repairs, which is taking up money we could have used on actual improvements…

I feel you. That's been my life for a few years too.
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