Owning a Home

[TickTockMan]

Do you think the article is correct? What do you think about "the downsides from the article?"

Home Economics: The Hidden Costs of the 'American Dream'

by by Aaron Task

The past few years have certainly challenged the idea that real estate prices only go in one direction. But the downside of the "American Dream" is even more pronounced, says James Altucher of Formula Capital.

Owning a home has "never been a great investment," Altucher says, noting housing went up a dismal 0.4% annually vs. 8% for the stock market from 1890 to 2004, according to the Social Security Advisory Board.

Moreover, Altucher says the notion buying a home is a ticket to financial security is a "scam" perpetrated on the American people by corporations seeking to keep us in debt, less mobile and with the storage to purchase all sorts of needless consumer goods.

http://finance.yahoo.com/tech-ticke...09285.html?tickers=REZ,IYR,XHB,HD,LOW,DHI,PHM

 

[Triple G]

You DO NOT own your home. You only rent it from the county. Miss a tax payment and they take it back.

 

[TickTockMan]

You DO NOT own your home. You only rent it from the county. Miss a tax payment and they take it back.

That is actually a great point. When I buy my house I plan on buying it outright with cash, but I still would have to make life yearly payments as long as I own it.

 

[ReluctantDaddy]

I just bought... I basically swapped rent for a mortgage. $37 above what I was paying for for rent at my last place. Vegas has some deals on houses... it'll be awhile before it gains some value. On the other hand, I bought very low, so it shouldn't drop much more in value.

So in not so many words... you gotta live somewhere. Might as well build equity.

 

[Pushyourluck]

The point is if you build enough equity or pay off the mortgage you will be able to sit pretty and do the things you always dreamt of in your retirement. This, despite the fact that the government now want people (and expect them) to work until they are in their 70's. It just doesn't seem worth it any more.

 

[Yooper]

At least with owning you have equity, which can be somewhat liquid.

One can borrow against it, or when you sell, you at least have something.

You can't borrow against the value of a rental, and when you move out of a rental, you NEVER get much back. If you are lucky, you might get your deposit back.

On the other hand, a home can be a pretty good investment.

My Grandparents bought their final home brand new in 1956 for $8,500.00.

Adjusted for inflation, that is $67,042.81 in 2009.

Appraised value in 2009 was about $175,000.00.

Better than a pile of rent receipts, anyway.

 

[unloadonme]

You don't just buy home as an investment; you also buy it to keep a roof over your head. The thing about buying is that one day, with any luck, the place will be paid for and you'll be able to spend your money on other things. With renting, you'll be paying out until your dying day.

 

[voyager1994]

...will eventually remain a dream for most!

 

[oasisdude]

I owned once, and am now renting again. Having done both, I plan to buy again -- it will be mine. At least, that is the dream.

 

[levenshulme31]

I think the article in the original post is pretty accurate.

I earn about the UK national average and buying a property is simply beyond my means. I am in the fortunate position of being with a very socially responsible Co-Operative housing provider with very reasonable rents and well maintained properties. I have no intention (or affordable possibility) of buyng a house unless I win the lottery.

At the end of the day, a home is a place to live, and should not be seen as an investment.

 

[BearMagus]

Where I live home values stayed pretty much the same and in some neighborhoods have gone up. The value of my home went up $20,000 last year. The reason I bought a home after renting for 25 years is that it's mine. I can do what I want as far as remodeling and I have incredible privacy. Not to mention a huge yard (bought an older home) for my dogs to run and play in. I plan on paying it off early so I won't have a mortgage payment after I am 50. When I retire, my taxes will be slashed and some removed. Also, in Texas we have a homestead act which protects homeowners from losing their homes accept for mortgage or tax issues.

I was paying $800 month for an upscale one bedroom unit. Now I pay $800 for a three bed, two bath, two car garage home with massive yards, mature trees, and walls painted the way I like. For me, buying a home was more than worth it. In a few years my home will be owned outright and the extra money will go into beefing my retirement accounts.

 

[Seasoned]

You don't just buy home as an investment; you also buy it to keep a roof over your head. The thing about buying is that one day, with any luck, the place will be paid for and you'll be able to spend your money on other things. With renting, you'll be paying out until your dying day.

This is a valid case for home ownership. On the other hand there is the upkeep that is required, painting, furnance, roof, gutter repair, windows, lawn costs, snow removal, etc. Most folks don't set money aside and the costs can be burdensome. There is the added worry of leaving the home while on vacation.

I am starting to think that there are cases where it would be cheaper to rent over a lifetime. Granted there is no equity, but equity unused is of no value except to heirs.

 

[metta]

i love owning my home. My home is more than an investment to me. I love my neighbors, coming up with new decorating ideas, and the location that it is in.

In the first several years of owning my home, I over paid the payment to get the mortgage down then last year I refinanced to a fixed with a very low payment. So now I'm living in a single family home that is over 3,000 square feet next to a forest, creek and river in a metropolitan area with a payment that is around a 2 bedroom apartment.

As for stocks, I have lost way more money than I put in. I have never been able to break even, not alone get 8% annually. Right now, interest rates have bottomed out and it is probably the best time to get a loan if you can. Home values may still slide for a while though. I'm not that concerned about it.

I will say that my parents taught me to never rent because it is like throwing money away. I'm glad I bought.

 

[syoBsUtsuJ]

I lucked out; my grandparents sold me their "summer cabin" at cost ('70s cost). Lol ... it was a graduation present, and at first I balked, but it was such a great deal, I couldn't pass it up!

 

[Audio Tech]

I own my home. Someday it will be free and clear. I wouldn't trade it for anything else. I can do what I want in it. I don't have to ask permission to paint the walls or change the carpet.
I can play my music, and it bothers no one.

When I retire, I won't be paying rent out of that retirement.

Come on.... it's a no brainer.

Unless you like moving a lot, it's still the best way to go. I never looked at it as an "investment" to begin with.

 

[Kyanimal]

We've owned our home for 24yr. We love our neighbors! We're also part of a Historic District, so homes must be maintained ... restored as opposed to renovated.

As was mentioned above, roof, furnace, masonry, etc., etc., etc., etc., and given the requirements of a Historic District, we now owe more on it than what we bought it for! Still, it's been worth every penny!

There is one thing about owning a Home that you should be aware of though ...

No matter where you're sitting to relax, you're always looking at something else that you should be doing instead!

Keep smilin'!!
Chaz

 

[BabiGayPimp]

Homeownership is a worthwhile economic and lifestyle goal but not at any cost. People who paid top dollar for shitty hovels at the highest point of the real estate bubble in places like California, Forida, Arizona, and Nevada were blithering fools and I have little sympathy for them. And American taxpayers who want to subsidize their stupidity by supporting a publicly financed mortgage principal "cramdown" scheme for irresponsible, underwater homeowners are the biggest fools of all.

With that said, even if you buy a home you can afford and dillgently pay off the principle, you don't truly own it when there are still property taxes and other fees to be paid at escalating rates forever.

I still hope to purchase a nice place sometime in the next five years, and it will be something I can afford and take responsibility for.

 

[AllMan]

I own my home and while it's more for mortgage than for rent..it's worth every penny. I am paying into something I own, not helping some greedy landlord pay his bills.

As for the maintainance costs and repairs, sure the landlord will pay for those items if you rent from him---but just look at the thousands of dollars you are constantly paying into his investment. Just buy a home and get a basic home warranty and keep renewing it yearly....it covers pretty much everything in the house (depending on the plan) and only costs about $375/year. It more than pays for itself if something major happens. Hell, I have already gotten my money's worth when my $1000 hot water heater went bad in November.

Right now is the best time to buy with low interest rates and all the forclosures and short sales--instant equity! With smart planning, careful upkeep, and smart shopping---owning a home is well worth it in the longrun!

 

[Audio Tech]

Homeownership is a worthwhile economic and lifestyle goal but not at any cost. People who paid top dollar for shitty hovels at the highest point of the real estate bubble in places like California, Forida, Arizona, and Nevada were blithering fools and I have little sympathy for them. And American taxpayers who want to subsidize their stupidity by supporting a publicly financed mortgage principal "cramdown" scheme for irresponsible, underwater homeowners are the biggest fools of all.

With that said, even if you buy a home you can afford and dillgently pay off the principle, you don't truly own it when there are still property taxes and other fees to be paid at escalating rates forever.

I still hope to purchase a nice place sometime in the next five years, and it will be something I can afford and take responsibility for.

I gotta agree with you on the upside down mortgages. Living way beyond your means is plain stupid, and I have little pity for those people. I drive a civic myself, though I wouldn't say no to an aston martin db9. I just KNOW what I can afford.

However, on property taxes.... I'd rather pay $1200 a year (where I live) than $1800 to $3000 a month rent for the rest of my life.

 

[BabiGayPimp]

I gotta agree with you on the upside down mortgages. Living way beyond your means is plain stupid, and I have little pity for those people. I drive a civic myself, though I wouldn't say no to an aston martin db9. I just KNOW what I can afford.

However, on property taxes.... I'd rather pay $1200 a year (where I live) than $1800 to $3000 a month rent for the rest of my life.

Well, from what I hear, the property taxes in California are kept artifically low by the populist actvism of the past, and have helped justify the $700,000 "migrant worker sheds" even as the state slides closer to bankruptcy and social and economic collapse.

In some other states a $300,000 home draws a $9,000 annual property tax bill.

I agree that homeownership is better for most people in the long run, but the good situation that some houseowners currenly enjoy is due to extremely favorable tax treatment that may not last forever.