Is an advantage to own a house?

[Anonymous]

I could have written this post last year when we first started wondering about moving out of our apartment because "it was such a great time to buy." We looked around just to see what was out there, and if we didn't get the house we're in now, we probably would have stopped looking.

We're 6 months into this home ownership thing and there are definitely some things about it that I do not like: gardening, shoveling, utility bills, wishing we were handier with simple home repairs and improvement projects... plus the knowledge that we can't just pick up and leave whenever we want to - we're much more tethered to this area now that we own a house.

But there are plenty of things I like: ripping up the old dingy wall-to-wall carpets to reveal the glorious hardwood floors underneath, painting rooms in bright colors without worrying about repainting before we leave, replacing light fixtures we don't like, taking out built-ins or adding new ones, not having our cranky next-door neighbor call the police when we make "too much noise" after 10 PM, having our own yard and screened in porch, driveway parking...

We are a teensy bit stretched in our budget, which isn't fun as a PP mentioned, but now that we've taken the plunge and we're expecting our first baby this spring, I'm pretty glad we're not in our apartment anymore. The change in mindset has been gradual though - it was NOT a given for me that I'd truly enjoy it!

[Anonymous]

Anonymous wrote:i rent, for many of the reasons that you state. i live in a very vibrant urban neighborhood that i love and would never in a million years be able to afford as an owner.

space is a big concern for me, but i used to live in NYC, so i have a whole different concept of what constitutes adequate space.

the thing is--my dd is now 4 and i am the only--and i mean the absolute only--renter in my kid-oriented social circle (parent friends from neighborhood, playgroup, school). and i feel self-conscious about it. and i genuinely think that it somewhat impacts other people's impressions of me. and that bothers me. it really does. i feel like i don't seem as financially stable, or as mature or as professional as other parents, even though i am those things.

anyway, just something to think about.

I've heard most folks in vibrant Western European cities rent - it's the norm, as opposed to owning. The "American Dream" we've all been told we can/should strive to achieve includes home ownership, but it's pretty clear that the old dream is dying (a slow and painful death, to be sure) and it's entirely possible that renting is the better position to be in!

[Anonymous]

Buying property in, say, England is a whole different ballgame than it is here. I'll never forget when a friend from London called me to be her reference because she needed someone who owned property (Landed Gentry or some ridiculous thing - silly a 1/3 acre qualified!) to be a reference for her in the transaction (and this had nothing to do with credit). I am not sure I would necessarily take comfort in what is and isn't the norm in London or other Western European cities.

That being said, if you are not handy and do not want the hassle, renting has many perks. We own two houses at the moment, and part of me dreams that, when we retire, we will own one super-fab house. The other part of me dreams we will rent in some community with fabulous maintenance staff. I really do not like keeping up a house. On the plus side, you can customize. On the down side, when it's broke or defaced with crayon (or Sharpie!), it's all your problem.

OP, I think renting sounds right for you for right now. I can't overstate the hassles of dealing with the every day junk of owning a house. It sounds like you are making a very wise lifestyle decision. Also keep in mind that, while the mortgage interest is partially deductible, you are still paying somebody interest. Everyone likes to think it is free money to have a mortgage because of the deduction, but it is not.

[Anonymous]

Yikes, PP. I'm part American Dream that pretty much mandated (within it's own culture) owning a house. By legitimate means. You say that owning a house is no longer to be considered part of the American Dream?

On the flip side, so to speak -
What about oil and arms money that are buying the outrageous houses? There are quite a few of them. They might not be on every corner, but they are there. And there are a lot of them. That could, very loosely, qualify as part of the American Dream.

I have heard of nannies that have been in America (not that long), don't pay taxes, and own property "here" and property "there" (what they consider their home country). They actually consider bailing (and do bail) from their current mortgages. Not because their financial situation has changed; but rather "they don't THINK their house is worth what they paid" - y'know, like everyone else who is still paying their mortgage responsibly. Are they part of the American Dream?

What about the people who took a loan in good faith and are paying it in good faith? Aren't they the epitome of the American Dream?

I dunno, it seems a broad brush to say the American Dream doesn't exist. It just depends how it is used. If it becomes the American Nightmare, who bears the brunt?

[Anonymous]

Do people who rent feel like they have to over compensate in other areas, sometimes? I know of one or two people who could have had some really nice houses by now. Just an observation.

[Anonymous]

Read the book Rich Dad Poor Dad- the author talks about why he does not see owning a home and paying interest on the loan as a wise investment.

[Anonymous]

I think one other factor to consider that hasn't been mentioned is the type of neighborhood in which you want to live. If you prefer a condo/apartment-type neighborhood/lifestyle, then renting might be better. If you want a single-family house, though, most of those rentals in the better-schools neighborhoods tend to be only temporary--i.e., the owners are temporarily posted elsewhere so they rent their house for two-three years or so. You don't get too many SFHs on the long-term rental market in the better school districts, so in those neighborhoods the norm is to buy, and if you want to live there long-term, you'll have to buy.

[Anonymous]

Anonymous wrote:I dunno, it seems a broad brush to say the American Dream doesn't exist. It just depends how it is used. If it becomes the American Nightmare, who bears the brunt?

I never said it didn't exist - I just said it's dying a slow death. It is going to be replaced by something else - there is no way the lifestyle that was billed as the classic American Dream (the one born out of the post-WW2 suburban explosion) can sustain itself into the next, say, two generations or so. No need to be so defensive! And no need to hijack this thread - there are obvious pros and cons to owning a house and renting, and I just think part of the consideration could be what kind of future you envision in this country - not that it should be.

[Anonymous]

Who's hijacking? Experiences are hijacking?

[Anonymous]

Most people in Western Europe rent because the laws favor renters. Renters have a lot of rights there that protect them against bad landlords.

We bought a house and now we rent, and I have to say, I am loving renting. We spend a lot more time with DC because we don't have as many chores around the house. I suppose this would change as DC gets older and doesn't need to be with an adult 24-7, but for now, I love the convenience.

Also, we found a really nice, old apartment in the city that has a lot of character. This helps to avoid the horrible big, white apartment box feeling.

[Anonymous]

OP, is your point that you would rather have portability or a (at least semi) permanent place to make yours?

If this area is too expensive (it is), would you move elsewhere to own?

Contrary to some (who, sadly, have yet to move away from mommy and daddy) - this really is NOT the only place with worth while jobs. There are so many places with more education and culture. In fact, it's so crowded, wouldn't it be nice to get OUT?! I would. {But one of our houses is here, the irony}.

I would be embarrassed to not own. It may be how I was raised.

Even though I don't want to seem like one of those overly-shallow list makers who misses everything life has to offer while tending to my lists!

[Anonymous]

"There are many other investments. Housing is only a good investment if you actually get value out of living in the place. Doesn't sound like you would. "

Bingo!

[Anonymous]

There have been a couple of good articles about homeownership in the Atlantic in the past year or so. Two points stick out:

1. Financially, many/most other financial investments will give you better return than homeownership. Generally speaking, your home's value will generally increase at the rate of inflation over decades. You'd do much better in the stock market, for instance.

2. Areas with high rates of home ownership suffer the most in times of recession and can have bad long-term economic consequences because the population is not mobile and cannot adjust to changing labor markets. See the Detroit metro area as a prime example.

[Anonymous]

I'm so glad for this thread. My husband and I have been going back and forth about this for the last year. He wants to buy and I don't. I wouldn't mind buying a house, but not before we're ready. We have ok credit and no savings. It just doesn't make sense right now. I prefer renting because I like new places. Buying a house is just so long term. I'll reconsider when my oldest starts K.

[Anonymous]

The main things I disliked about renting are being subject to rent increases, less than stellar landlords, and the relative instability. During the years we rented we had continually increasing rents (as often and as frequent as the landlord could legally increase it), landlords that were not very responsive about repairs and other issues, and DH once had to move from a place he didn't want to leave because the building was sold and the new owner wouldn't renew the contract.

If you're renting in a stable building with a good landlord, those issues may not be enough of a factor for you to deal with the housing market (we bought before the market got really crazy and back then it was much easier to take the plunge and buy).