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The real cost of owning a home

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Re: The real cost of owning a home

#731

Post by Suppafly »

asdff wrote: post #473
m463 wrote: post #467

Earlier quoted context omitted.

I don't think home ownership is an "every single weekend" thing unless you bought a fixer-upper. Honestly, it sounds like you enjoy it. If you are doing it with that frequency I think you just are "into" your house.

Depends where you live. In the midwest you might legitimately need to mow 3x a week and you might have a huge lot. If you say screw it and let it go to knee high weeds, city might show up and cut your grass and fine you for it.

Nah, I live in the midwest, even people that have lawn services have them come weekly or even every 10 days.

Re: The real cost of owning a home

#732

Post by notepad0x90 »

strix_varius wrote: post #678
notepad0x90 wrote: post #632

Earlier quoted context omitted.

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.

they can and do, if you're past eviction notice.

Re: The real cost of owning a home

#733

Post by LoganDark »

aidenn0 wrote: post #705
memcg wrote: post #558

Earlier quoted context omitted.

Realtors often have a list of contractors they rely on to help potential sellers get their homes ready for sale. I have found and used recommended roofers, plumbers, HVAC and electricians from a local realtor that wants my future business.

A good realtor will often not recommend the same contractors that they use for prepping a home for sale. The requirements for getting a home in saleable condition and getting a home in livable condition are not always the same. Instead they act as an information hub for homeowners. Obviously "good realtor" is doing a lot of work here, and I don't know how you find a good realtor (kind of lucked into mine after having…

It sucks to find good tradespeople because word of mouth does so much for them that they hardly advertise. So if you actively look for one, you tend to ONLY find the bad ones, and you're actually less likely to find the good ones... unless you know someone who happens to know someone. Which sucks since I don't know anyone (and trying to look for someone encounters the exact same problem)

Re: The real cost of owning a home

#734

Post by webprofusion »

Owning a home is like paying into a bank account made from bricks, but it increases in value. Yes it requires upkeep and maintenance, because entropy wants it to be a decaying pile of rubble. The land will always have a value, so maintenance is kind of optional-ish.

The people trying to convince you to keep renting are, sometimes, rental investors stealing from your children's inheritance. Renting is paying a property investors mortgage in return for a home you don't have to/cannot directly maintain but you are still paying for the maintenance on a weekly/monthly basis at an agreed rate with annual increases.

On the other hand if you're not going to have kids it's bit like Brewsters Millions where you try to spend everything you make without acquiring assets and without running out of money while you still need it.

You can always sell and go back to renting, but if you rent for 30 yrs you will put at least a couple of homes worth of your earnings into renting over that period.

Re: The real cost of owning a home

#736

Post by hansvm »

eikenberry wrote: post #524
m463 wrote: post #467

Earlier quoted context omitted.

I don't think home ownership is an "every single weekend" thing unless you bought a fixer-upper. Honestly, it sounds like you enjoy it. If you are doing it with that frequency I think you just are "into" your house.

Most homes are fixer-uppers. They graduate to that after just a couple decades. I owned 2 homes, both in the 20-30 year range in 2 different cities.. combined (sometimes both) they needed... new roof, new hot water heater, kitchen and bathrooms updates and water mitigation, pest damage and control, leaky pipe fixing, wood deck replacing, furnace and AC replacements, basement flooding issues, foundation issues, probab…

You can tell when a home was built like that though. Why did you purchase it regardless? Why did you do it again after your first experience?

Re: The real cost of owning a home

#738

Post by Galanwe »

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,…

Your calculation is bogus, you are 1) assuming infinite money 2) assuming infinite time.

1) When you say "add sustained regular $2500/mo contributions", you forget that compared to buying your place, you also have to pay rent, most likely at the same amount you would pay back your mortgage assuming same quality of life. So either you have a free $2,500 to spare (in which case you could also have invested that amount in the buying case, or borrowed more), or you have $0 to invest.

2) You cannot just take the expected value of two different returns distribution and assume you would earn it in both cases. That would assume you have infinite time to wait for the average rate of returns to converge. If your life depends on said returns, you cannot just say "oh nevermind I'll wait another 15 years to withdraw". In your example, stock market returns are immensely more volatile than real estate.

Re: The real cost of owning a home

#739

Post by QuiEgo »

havblue wrote: post #355

For my twenties, the biggest cost would have been opportunity. I was able to switch jobs multiple times in different states before meeting my fiancee. Renting allowed me to be far more adventurous than I would have been.

This. So this.

When you're 20 something and you can pack your 1 bedroom apartment worth of Ikea furniture into the smallest U-Haul, or just sell it on Craig's list and start over at the next place, renting is awesome.

When you have a house full of crap you've collected over 20 years and live somewhere you carefully picked for your kids to have a good school, the whole equation flips and you're willing to accept the downsides the author calls out, to give your family stability.

Re: The real cost of owning a home

#740

Post by markvdb »

esalman wrote: post #346
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…

This. Our household income is 300k, and I took a big risk purchasing a home in Socal where mortgage is 50% of our take home income. In a space of 1 year or so, we went from saving two out of four paychecks each month, to sinking two into mortgage each month. For me, we have one kid and we plan to stay put for at least 10 years. It's a good school district. The quality of life is excellent considering the weather, out…

> Renting is good advice, but in 5-10 years, we won't be able to afford rent here, let alone buy.

You don't know if you will get priced out. You don't know how housing prices will evolve in your area. They could as well go flat or fall. That uncertainty about local affordability can suffice as an argument for buying. Just don't confuse it with certainty about your future ability to afford the local area.

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