Didn't realize how expensive home ownership was

[Anonymous]

It’s a big commitment and a lot of work. It can be a good investment, but it can also go the other direction. Many advisors now say buy a house if you want a house but it’s not for everyone.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I own a nice vacation house in Wyoming south of Yellowstone NP. No state income tax, low sales taxes, low property taxes. The state is overwhelming conservative which is awesome. I spend 51% of my there at the moment and plan to retire there. I almost feel sorry for all you people that live in these tax obsessed blue enclaves.

What does that have to do with home ownership? You still have to pay federal capital gains tax when you sell and I would imagine you have decent home maintenance costs.

Probably the largest difference is that the rental market isn't that robust and probably quite high priced for the people that have no other option. At least it's nuts around Jackson Hole.

I don’t ever plan selling my home in WY. It’s really nice and I can’t see any of my neighbors. I do most of the maintenance myself. The only downside is valuations are really going up. Billionaires are pushing out the multi-millionaires. It’s about an hour from Jackson Hole which I ski at 30 days a year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
When we bought our home 30 years ago, we had to stretch our budget and be comfortable with buying a house that was 4x our gross annual income. And at that point in DMV our 2 choices were - a small, old tiny dwelling (as a starter home) in a very desirable neighborhood OR a new decent sized SFH in the boonies in a neighborhood that had poorly rated public schools.

This was nearly 30 years ago. At that age, and in those economic conditions, and that salary...we felt all the pinch in many ways. Barely managing on one income, one kid, SAHM. So, home-ownership was never easy for anyone we knew. I am shocked at the boo-hooing that we see when young people cry about not being able to afford housing or their lifestyle.

We lived for years till we were in our mid 30s with frugality in our food budget, gas budget, clothing budget and bought only the bare minimum stuff. And no - we did not have travel budget, kids EC budget, private school budget, hair extension and coloring budget, pet budget.

What are the people cribbing about. Buying a home was a big accomplishment. We stayed in an apartment from the time we started working (22) till after we had our DC 1 (33).


Cribbing gives you away…

+1 You need to learn to speak American English.

LOL. No, thank you. I take pride in being well educated, successful and a global citizen. It will be a major downgrade to learn to speak American English.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own a nice vacation house in Wyoming south of Yellowstone NP. No state income tax, low sales taxes, low property taxes. The state is overwhelming conservative which is awesome. I spend 51% of my there at the moment and plan to retire there. I almost feel sorry for all you people that live in these tax obsessed blue enclaves.

What does that have to do with home ownership? You still have to pay federal capital gains tax when you sell and I would imagine you have decent home maintenance costs.

Probably the largest difference is that the rental market isn't that robust and probably quite high priced for the people that have no other option. At least it's nuts around Jackson Hole.

I don’t ever plan selling my home in WY. It’s really nice and I can’t see any of my neighbors. I do most of the maintenance myself. The only downside is valuations are really going up. Billionaires are pushing out the multi-millionaires. It’s about an hour from Jackson Hole which I ski at 30 days a year.

Again...what does this have to do with Red State or Blue State or renting vs. buying? Homes in Aspen, Vail, Telluride et al sell for a gazillion dollars and Colorado is a fairly blue state.

You are offering some weird tangent to the discussion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I Didn't realize how expensive home ownership was until I sold my house. Wow. So much more disposable income. Now, I can save more, I can travel. Property taxes, landscaping, labor cost etc...man they add up.

I really thing we need to review the standard advice we have been giving people about becoming homeowners. When you look at the trajectory of property taxes for example I am honestly wondering how is homeownership still the best way to build wealth.

And you think renting is cheaper?
Renting is only cheaper if you rent a smaller home than the one you would buy.
Do you think you can rent a home like the one you sold for less than your mortgage? I doubt it.

+1. Yes, I like how OP says nothing about her rental costs. Buying usually leads to great appreciation, which is why I’ve owned six homes and keep moving up. Plus tax breaks. It’s called diversifying your investments and everyone who can do so should buy and hold.

You are effectively wasting your money. Very few people actually run the numbers . Home appreciation is nowhere near S&P . A mansion in DC was $600k in 1990s. Now it’s $4m house (if you are lucky with best zip codes).
If you invested in stocks you would have $5.6m now and no worries about house maintenance.
It also very much depends on RE class. Condos actually depreciate not appreciate

Wrong. Any investment advisor will tell you to diversity in stocks bonds, precious metals and real estate when one goes up, another may go down. I’ve made millions on real estate. It’s done better than my portfolio.

This assumes a person would have had 600k in cash to put in the stock market and then money left over for rent. Do the real math that applies to most people, using a ten or twenty percent down payment.

[Anonymous]

Google inflation. You suffer from short term thinking. If you had purchased a house 20 or 30 years ago, your mortgage payment would be $0-$2000 now. In 20 or 30 years, you may realize this.

[Anonymous]

Anonymous wrote:Sure but you miss out on massive historical appreciation.

Historically, housing does not appreciate as much as the stock market does. The past decade was an anomaly.

[Anonymous]

Anonymous wrote:I Didn't realize how expensive home ownership was until I sold my house. Wow. So much more disposable income. Now, I can save more, I can travel. Property taxes, landscaping, labor cost etc...man they add up.

I really thing we need to review the standard advice we have been giving people about becoming homeowners. When you look at the trajectory of property taxes for example I am honestly wondering how is homeownership still the best way to build wealth.

My house quadrupled in value since I've owned it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Buying a home is a good investment. However, most Americans today cannot afford to buy. That's really the issue.

You think property taxes are high in VA lol? Google property taxes in NY and NJ.

In some parts of NY, a $700k small split level can have as much $20k in property taxes.

Who mentioned VA? Everyone knows property taxes are low in VA.

I wouldn't call $16K a year low (on a $1.2 million house) including town and county taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I Didn't realize how expensive home ownership was until I sold my house. Wow. So much more disposable income. Now, I can save more, I can travel. Property taxes, landscaping, labor cost etc...man they add up.

I really thing we need to review the standard advice we have been giving people about becoming homeowners. When you look at the trajectory of property taxes for example I am honestly wondering how is homeownership still the best way to build wealth.

My house quadrupled in value since I've owned it.

Still, S&P probably went 6 times up

[Anonymous]

Anonymous wrote:

Anonymous wrote:I want stability and control. Renting gives me neither.

Of course it does. You can always exit the contract with zero loss

I own properties in one city ; rent in another. I enjoy being a renter and being able to move from one full amenities community to another.

I’ve had the same mortgage payment since 2013. Rent has not stayed the same since 2013. I can make changes and updates as I see fit. Renters can’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I Didn't realize how expensive home ownership was until I sold my house. Wow. So much more disposable income. Now, I can save more, I can travel. Property taxes, landscaping, labor cost etc...man they add up.

I really thing we need to review the standard advice we have been giving people about becoming homeowners. When you look at the trajectory of property taxes for example I am honestly wondering how is homeownership still the best way to build wealth.

My house quadrupled in value since I've owned it.

Still, S&P probably went 6 times up

You have to count in rent. My house for instance I lived in 9 years rents for $6,000 a month. I know as my neighbor is a rental. Still stocks are better.

My starter house brand new was $13,500 in 1954 and I sold it in 2017 for $535,000 Sounds great but on day I sold it $13,500 invested in S&P 500 would be worth 5 million. I did not own it brand new, but if someone did they would have paid rent for $53 years instead of owning it. My neighbor was original owner and she told me in 1954 she bought from builder who owned note. No lawyer, no realtor, in inspection, no mortgage closing costs. She just handed them a check for $500 and got a 30 year mortgage for $13,000 at 5 percent. That was a $67 a month morgage.

[Anonymous]

Anonymous wrote:
Anonymous wrote:
I want stability and control. Renting gives me neither.


Of course it does. You can always exit the contract with zero loss

I own properties in one city ; rent in another. I enjoy being a renter and being able to move from one full amenities community to another.


I’ve had the same mortgage payment since 2013. Rent has not stayed the same since 2013. I can make changes and updates as I see fit. Renters can’t.

Does your payment include an escrow for taxes and insurance? If so your total PITI has certainly gone up since 2013.

[Anonymous]

Anonymous wrote:Google inflation. You suffer from short term thinking. If you had purchased a house 20 or 30 years ago, your mortgage payment would be $0-$2000 now. In 20 or 30 years, you may realize this.

I purchased a house inside the beltway 8 years ago--my mortgage payment is <$2000 now.

Inflation is a risk that is reduced by home ownership in some ways, but not all. Ex. our mortgage is at 2.62%. We need a house with a bathroom on a floor where we currently don't have one--a family member has a new-onset disability and this isn't optional. The HELOC will be at the inflated rate. If we were still renters, we could just move.

You should buy a house on which you can afford not only the 20% down but also 1% of the value per year into a sinking fund for maintenance. Over the 8 years it has been staggered in how often we use it, but we never fail *to* use it, eventually.

[Anonymous]

I bought 10 years ago. Rents are up about $1500 for the same size house that I currently own. My own mortgage is locked in for 30 years. Yes property taxes can go up a bit, but nothing like rent does. And at the end of 30 years, I own it outright.