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The real cost of owning a home

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Re: The real cost of owning a home

#51

Post by throwaway894345 »

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…

I agree with this, but there's also the psychological impact of being able to easily move when you get a new job or when your state government allows agriculture/industry to poison your water or whatever the case may be. You may also buy a property only to find out you have a certifiably insane neighbor and you can't easily move out because said neighbor has created a dispute that requires disclosure to prospective buyers and you are under water (as is the case for a friend of mine). While this is admittedly a niche case, there are millions of such things that can happen where you are suddenly under water (including a mortgage crisis) and flexibility becomes an advantage. I don't think there's a clear psychological winner between renting and buying.

Re: The real cost of owning a home

#52

Post by zackangelo »

If you're in SF and weighing this decision, it's easy to get tilted in the buy direction because the rental stock is so horrific. Landlords have very little incentive to update properties or provide basic amenities that people take for granted in other major cities (good luck getting a washer/dryer).

Re: The real cost of owning a home

#53

Post by sowbug »

bpt3 wrote: post #24
someuser54541 wrote: post #3

Aren't quite a few of these concerns alleviated by owning a condo?

Condos basically just force you to pay for the ongoing maintenance that the author mentioned, but with the downside of not actually having any control over the quality of the work or the decision making process at all unless you're on the condo board. Condos are generally the worst of both worlds, because you have almost all the responsibilities of homeownership combined with nearly all of the restrictions of renting…

And the worst of another world: hyperlocal politics.

Re: The real cost of owning a home

#54

Post by m_w_ »

FrustratedMonky wrote: post #26

Is there someplace that takes all of these inputs. Then graphs them over 10 or 20 years and include some adjustment for inflation? I didn't see in article any discussion about mortgage rates versus appreciation versus inflation. Article did sum all the inputs/outputs, and came out at loss. I'm just wondering if there is some other trends over 10 or 20 years that make the house better.

Not all the inputs, but Ben Felix’s company (makes videos on this topic) has a rent vs buy calculator, mainly focused on investing the cost difference for mortgage vs renting: https://research-tools.pwlcapital.com/research/rent-vs-buy

Re: The real cost of owning a home

#56

Post by jandrese »

RIMR wrote: post #20

>You've probably heard someone say something to the effect of "renting is just throwing your money away". Don't believe it. It's a glib statement that simply isn't true. If you take literally anything away from this article, this opening line is it. People who say this bought their house decades ago and have no clue what the present situation is.

I don't know. I get a reminder of what housing inflation looks like every year when the annual tax assessment goes up another 6-8%.

Re: The real cost of owning a home

#57

Post by vips7L »

fulafel wrote: post #47
vips7L wrote: post #34

Earlier quoted context omitted.

Rent only goes up.

"February 2026 Rental Report: National Median Asking Rents Hit Four-Year Low" according to https://www.realtor.com/research/february-2026-rent/

Now extrapolate that over 3 decades (30 year mortgage) and not 4 years.

Re: The real cost of owning a home

#58

Post by carabiner »

cosmic_cheese wrote: post #12

On the other hand, renting comes with hidden (and some not so hidden) costs too. The main one for me is the inherent precariousness that comes with renting. You don’t know how much longer you’re going to be able to stay in your apartment, whether that be due to rent hikes or the landlord deciding that they want to give the apartment to their nephew or any number of other things. The constant low level stress of knowi…

Owning a house is a hedge against risk. You are paying a premium to have certainty, like insurance.

If that premium is too high though, you can be worse off than accepting the risk of variable costs.

Re: The real cost of owning a home

#59

Post by mothballed »

M4R5H4LL wrote: post #4

With a mortgage, you are forced to save money. In other words you have no way around being disciplined. So yes in theory you could probably make more money with aggressive investing, but chances are most people would risk too much and lose a lot and never have the mental discipline of saving the excess they have no matter what happens in their life.

And then hope you're not one of the ~1/3 that end in a divorce at which point your house gets firesold to first low-balling flipper. House can be really bad anytime it's multiple people liquidating it -- I watched some other family members inherit a house and it sold for about half it's value because some family members weren't willing to wait more than a millisecond for the inheritance payout.

Re: The real cost of owning a home

#60

Post by FireBeyond »

This isn't an overly apples-to-apples comparison. It factors in costs like "updating your kitchen", making things more stylish, etc.

The author also seems to assume you'll be paying more to heat and cool your house because if you're renting you're in an apartment? Just down the road from him, four of the five homes I rented before buying in 2021 are larger than the home we bought.

"Less than 21% of my monthly payment is going towards paying off the loan" - well, yes, because it is front-loaded with interest. And as you get through the loan, 80%+ will be paying off the loan.

Maybe different loans are different, but generally your home insurance and property taxes are rolled into the mortgage (and often paid on your behalf by the servicer) - indeed, it seems like there's a double dipping of breaking down his mortgage payment and the component that is tax and then saying below "I currently pay $515 in taxes monthly".

There absolutely are additional costs to owning a home, to be very clear.

But there's definitely a contingent (and this post isn't the "worst" of them) that likes to paint home ownership as nothing more than opening your check or pulling out a credit card every month for "the next four digit expense".

Especially in Western Washington where the property market 2010-2020 was "a good one". (I put down 10% and at the contractual "year-and-one-day" on my loan for the soonest I could remove PMI I was able to because I'd hit 20% equity on value increase - only making my regular payment), something that he benefits from, too:

> I bought my current home in 2011 for $420k, and the Zillow currently estimates its value at $757k. I've put a lot of money into it catching up on maintenance, repairs, and improvements, but the appreciation will definitely exceed whatever I've put into it when I decide to sell it.

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