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The real cost of owning a home

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Re: The real cost of owning a home

#821

Post by alistairSH »

bell-cot wrote: post #806
alistairSH wrote: post #788

Earlier quoted context omitted.

There are other ground covers and plant options that don’t require weekly mowing. Creeping junipers and native bunch grasses come to mind.

True. But on a large and very steep hillside - "2/3rd of an acre, but most of it is a 45 degree hill" - it can be extremely difficult to replace the plants holding onto the soil, without experiencing horrible erosion during the transition.

Yep. Depending on the property layout, and how close that slope is to the house, it might be something to contract out and have hardscaping and drainage done.

My last house didn't have anywhere near as much land, but there was a fairly steep hill on the back of the house. We ended up having part of the slope dug out and a "seat-height" retaining wall installed, with drainage installed as part of the build, and lots of low-maintenance plantings. Reduced the work from weekly mowing on a slope to occasional weeding and trimming. But, it wasn't cheap to do properly.

Re: The real cost of owning a home

#822

Post by halostatue »

bigstrat2003 wrote: post #743
AnthonyMouse wrote: post #671

Earlier quoted context omitted.

> 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…

I'm sure it varies from location to location, but my handyman has said that the line here is modifying existing infrastructure versus installing new stuff. The former is fine without a license, the latter not. Thankfully, I've never yet needed him to do work that falls in the latter bucket.

There's a fine line between large modifications to existing infrastructure and "new stuff". You need a handyman you can trust in order to know the difference.

It also depends on your insurance situation. If I'm doing renovations, my house insurance company will not honour my insurance if the work is being done by a contractor without knowing the insurance status of the contractor.

One thing to consider is whether there is a reasonably-priced "emergency contractor" service to which you can subscribe. Enercare in Toronto offers plumbing protection for $21/mo and electrical protection for $16/mo. Service calls — 24 hour service calls — are included and covered in the plan, and labour for fixing the problem is included. We've had multiple cases where we've needed to call a plumber out to look at issues and it would have cost ~$200 to get them in the door and more than $400 by time the work was done. We've also used them for discounted plumbing work (15% off labour and most parts) in the past when we didn't have a different contractor for something we needed done.

Re: The real cost of owning a home

#823

Post by halostatue »

asdff wrote: post #515
ball_of_lint wrote: post #484

Earlier quoted context omitted.

3x/week is wild. I'd get a different type of grass at that point.

Just what happens with the rain load during the peak growing season. Later in the summer it will switch to a more drought condition though and there won't be so frequent mowing. But the peak parts, yeah, not much I don't think you can do via strain selection given the quantities of rainfall.

Fescue grasses mostly flop over rather than stand tall.

Most lawns in North America are Kentucky Blue or ryegrass which are what produce the eyesore.

But lawns in general are a pestilence.

Re: The real cost of owning a home

#824

Post by Sohcahtoa82 »

abalashov wrote: post #412
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…

Indeed. This is why I'm a preferential life-long renter, although I think the primary reason is that I can't stand living anywhere for more than 2-5 years. So much friction to move, unwinding this risky position very expensively, with loads of transaction fees stacked--I can't understand the appeal. Even owning a condo was enough for me to realise I don't want to own my own bare metal, and that I look at housing as a…

> I loved my super high-interest loan. It meant that my most of my housing payment was tax-deductible, and that's fantastic.

Absolutely insane.

I guarantee that the tax deduction did not offset the extra interest you paid and that overall, it's a net loss for you.

The deduction reduces your taxable income, it does not reduce your tax directly. If you paid $30,000 in interest, it might reduce your tax by ~$10,000, so you're still down $20,000. Meanwhile, if you had half the interest rate, you might pay $15,000 in interest, reducing your tax by ~$5,000, so you're only down by $10,000.

And that doesn't even get into how the standard deduction works, which you can't take if you itemize so you can take the mortgage interest deduction.

I don't think there's a single scenario where choosing to spend more money than you otherwise would just for tax benefits results in a net positive.

Re: The real cost of owning a home

#825

Post by Sohcahtoa82 »

csomar wrote: post #771
Sohcahtoa82 wrote: post #544

Earlier quoted context omitted.

> 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…

Are you saying that during the 11 years you never had an electrical issue, window/door breaking, a paint job, a clogged pipe, mold growing somewhere, a tree that needed handling, etc... You either have very high quality materials, don't care or were just lucky. Usually something (small/medium) breaks every 2-3 months or so and something (medium/big) breaks every 3-4 years or so. Depends on usage too (1 person is very…

> electrical issue, window/door breaking, a paint job, a clogged pipe, mold growing somewhere, a tree that needed handling, etc

I did forget about two of those. I did need to get some trees handled a few years ago. Was about $3,000 to get like 5 trees (A couple over 150 feet) removed. And we did get the house repainted, but that wasn't completely necessary, but was a nice to have. Wasn't that expensive, surprisingly.

But have not had electrical issues (Unless you count installing an EV charger), broken door/window (Unless you count my dumb ass trying to walk through a screen door and tearing it up, but that's a $150 replacement from Home Depot I install myself in 5 minutes), no clogged pipes, no mold.

Even my water heater has been fine. No idea when this tankless heater was installed, but it's been 11 years and no leaks or problems.

I did have the garage door tension spring suddenly snap, but I'm fairly sure that was only $300 to get fixed.

Again though, if I was renting the cost of all this work would have been included in rent. Sure, renting makes living costs more stable, but in the long run, I'm not convinced there's a scenario where it comes out cheaper, even if you're investing the difference. Rents in my area have gone up 75-100% in the last 10 years. My mortgage stayed the same.

EDIT: I suppose if you're in an area where rents are significantly cheaper than mortgage payments, it may be cheaper to rent. But in my area, it's very close to 1:1. When I bought my house, it was $340K, minus a $20K down payment. $320K at 4% for 30 years was $1527/month. Plus property tax brought it to about $1,900/month. Meanwhile, the rental estimated value was $1,800/month.

Re: The real cost of owning a home

#826

Post by bartoszcki »

So, roughly 16 years ago I bought a tiny flat. Renting tit for that long would already be more expensive than all the costs of ownership, even assuming that renting cost was constant (it TRIPLED). As a bonus, the flat is worth more than three times of what it was.

So in total, I've paid 1.5x for a flat worth x and now it's worth 3x and I don't have to pay the rent!

I'm not saying the article's author it wrong, just that your mileage might vary.

Re: The real cost of owning a home

#827

Post by Vaslo »

rogerrogerr wrote: post #634

Been thinking about this a lot. Curious what the rational folks of HN would suggest for me. Fact pattern: - I'm in the 25-30yo range, single male - Living with parents because I can; there's no friction and I mostly enjoy it. And I'm saving a ton of money. - Remote senior SWE for a non-FAANG, but still doing around $200k/yr between my W2 and a few other things - NW somewhere around 400-500k. I could easily go buy a h…

What about the relationship thing? Most significant others don't want to live with their in-laws and fear failure to launch. Clearly not the case of a failure with your great income. That said, this isn't as much a buy a house point as it is a get your own place point, which could be either rent or buy.

Re: The real cost of owning a home

#828

Post by [deleted] »

mancerayder wrote: post #800
alistairSH wrote: post #375

Earlier quoted context omitted.

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…

And people aren't including the interest deduction on income - up to 750K loan amount worth. This is a form of subsidy that renters are handing over to mortgaged owners.

[deleted]

Re: The real cost of owning a home

#829

Post by eudamoniac »

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…

Weeds are pioneers, helping the soil, when nothing else can grow (or is allowed to). First of all why do you need to get rid of those weeds? Second of all, if you improve the soil and go through successive plantings of larger things, the weeds will be outcompeted.

Re: The real cost of owning a home

#830

Post by abalashov »

Sohcahtoa82 wrote: post #824
abalashov wrote: post #412

Earlier quoted context omitted.

Indeed. This is why I'm a preferential life-long renter, although I think the primary reason is that I can't stand living anywhere for more than 2-5 years. So much friction to move, unwinding this risky position very expensively, with loads of transaction fees stacked--I can't understand the appeal. Even owning a condo was enough for me to realise I don't want to own my own bare metal, and that I look at housing as a…

> I loved my super high-interest loan. It meant that my most of my housing payment was tax-deductible, and that's fantastic. Absolutely insane. I guarantee that the tax deduction did not offset the extra interest you paid and that overall, it's a net loss for you. The deduction reduces your taxable income , it does not reduce your tax directly. If you paid $30,000 in interest, it might reduce your tax by ~$10,000, so…

It's absolutely a net loss, but the $55k deficiency when I walked away was worse. However, I realise that this was an artifact of the recession.

Less flippantly: I look at it as a question of government distorting the housing market with tax policy, and whether to have a deductible housing payment or not. Any conceivable appreciation is perhaps a bonus, but I truly don't care.

Re: standard deduction -- it wasn't then what it is today, post-Trump tax cuts.

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