571–580 of 901 posts
Not surprised ownership is not cheap in the US. West EU here, bought a new, architecturally wrong (yikes) house in 2012. I knew its conception would spell trouble, and sadly I was not disappointed on this part almost right off the bat. But the location and the price (right on the aftermath of the 2008 financial crisis and economical fallout / market bottom) were good. After 14 years it cost an average of $130 per mon…
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Buy a house without grass :)
Actually illegal in a lot of the midwest I'm not even kidding.
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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.
However, I think it was on the phone with the company waiting on hold for about four hours total to process the claim. That was without any dispute or confusion, it’s just how long the process took. The person on the other end of the line would ask me one question, then put me on hold for another 15 minutes before asking the next question. I got the impression they are actually handling multiple customers at once and switching between us. I can only imagine this system is designed to deter folks from making claims. I was afraid to delay the call any longer by inquiring about whether there were multiple replacement models I could pick between. I received a $600 model from a manufacturer I wouldn’t have chosen.
If I’d paid $600 for that home warranty, I would not be a satisfied customer. I certainly wouldn’t recommend home warranties as a time-saver. It would be much easier to directly purchase products and services from people with some incentive to obtain my business.
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> I don't think home ownership is an "every single weekend" thing unless you bought a fixer-upper. It really isn't, and I don't know why so many homeowners act like it is. I bought my house in 2015. It was built in 1983. The only things I've had to do are a roof replacement, HVAC upgrade, and deal with a broken water main. Sure, none of those were cheap, but that's 3 events in 11 years, and the first two I expect to…
The incentives change when you become a homeowner. You reap the benefit of any improvements you do to the property; you also know for sure when you're going to leave it, and you have the freedom to do whatever you want to do to it. Before, when you were renting, any improvements you did were throwaway time and money, benefitting the landlord and future tenants more than yourself. Many homeowners respond to these ince…
Well, about that...
There is a thing called a Compulsory Purchase Order in the UK, with equivalent in the US for example.
Guess which freehold home owner with two thumbs can expect a CPO sometime in the next 10 years?
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>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…
> He's under the building doing plumbing or electric one day. I believe I've encountered that guys electrical work, and it ain't sage :) (I.e. there are a few of those "fix it all" guys, but they're not always code compliant. They do get stuff done, though)
Most other things (besides obvious big things like foundation, drainage, roofing, load supporting areas) can be done with a good "fix it all" kinda person, or (with patience) youtube.
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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…
So are Stocks ...
> I find it hard to believe that over time if you took the money you'd put into a house and subtracted out rent, you'd end up winning in the long term.
You are not alone. The thing is this is such a common argument that there are a zillion rent vs buy calculators [1].
That said, yeah sub 3% the math often does work out in terms of buy (assuming you don't sell before 7 years which the average person _does_ sell before). But sub3% and holding for 30 years is actually rare.
It basically comes down to that the down payment gives renters such a headstart in gains that the homeowner takes forever to overcome it. But keep in mind they're also comparing a similar rental house to the bought house. So If you'd rent a smaller 1 bedroom apartment but only going to buy a 4 bedroom house then you're really behind in the math.
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I always consult this calculator: https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal... It forces you to make some assumptions on market returns and such, but it gives a pretty clear picture. The biggest variable is how long you expect to live in the same place (longer favors buy) and the next biggest is the ratio of average rent to average housing payment. The inflection point being that if you live in one…
> but that requires you predicting your life 30 years in the future. This is true, but the vast majority of people - especially in the US - don't move around the country or even state every few years. One of the biggest, perhaps the biggest, pro of renting is that you're not tied down to one place for very long. It's pretty rare that someone buys a house then is suddenly forced to move hours away.
>"renting is just throwing your money away" Unless you think landlords are running a charity, some part of your mortgage is going to them as profit (over a large enough sample of renters anyways), and some percentage of your rent is covering 'bad tenants' (which you're not, right?). Their entire improvement section is also something renters tend to not think about. It's a weird situation when renting that you aren't…
This isn't true due to market dynamics.
If a homeowners mortgage is say 4k/month and they list the property at 4.5k/month and receive no renters they can only do this for so long before they are forced to down the price.
Of course, what actually happens is that they list it for 5k/month because other properties are renting for that amount and that's the market price. But if supply increases in the area or demand decreases then prices will go down possibly below the owner's mortgage cost because uh getting 3.5k/month is better than 0k/month.
You will own nothing and be happy.
- A happy home owner (not a boomer)
A lot of discussion of the cons without discussion of the pros. For example: 1) your home is a hedge against inflation, your $2000 to interest sounds terrible when rent is $2500, but doesn't sound so bad if rent rises to $3500. If you live in your home for long enough, this is all but guaranteed. 2) your home is a leveraged investment. You may only be getting 4% per year in appreciation, but that's 4% gains on the to…
> your home is a leveraged investment Which means the potential losses are leveraged too. Plenty of people have ended up in that position. It isn't all upside.
You largely will not get margin called over your house. The bank doesn't want it. And also the house largely won't get re-assessed in value so you can launder the volatility through bad markets.
However, if you take out a $1M stock position and it drops down to $0.5M the broker absolutely will re-assesse your position based on market prices and then take liquidate you to ensure they're whole.