Didn't realize how expensive home ownership was

[Anonymous]

Anonymous wrote:My mortgage/taxes/insurance is 3k/mo. If I were to buy the same home now it would be 7k/mo. I am SO glad I bought when I did, which was 2018 so not that long ago. In my area for 3k now you can rent a 2 bedroom apartment.

+1 Yes, home maintenance and other costs are expensive. The real benefits of buying are seen many years down the road when your fixed-rate mortgage payment is low relative to current prices/rents. In 20 yrs the person who bought the house with the $7k mortgage payment will be saying I'm so glad I bought when I did because to buy now would be $12k. And on it goes. I can remember when my parents' mortgage payment for a nice 4-bedroom house was $500. It felt "expensive" when they bought it.

Along the way, both the owner and renter are paying the maintenance costs, renters just don't see them allocated separately. IMO, the main benefit of renting is that you don't have to hassle with taking care of maintenance, the landlord has to do it. But you are also dependent on having a landlord who will do it.

Buying a house - if you stay and pay off the mortgage - lets you significantly reduce your housing expense in retirement. The owner is still paying taxes and maintenance. The renter is paying those + continuing to pay the landlord's mortgage + the part of the cost that is just meeting the current market conditions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mortgage/taxes/insurance is 3k/mo. If I were to buy the same home now it would be 7k/mo. I am SO glad I bought when I did, which was 2018 so not that long ago. In my area for 3k now you can rent a 2 bedroom apartment.

So...it seems like you are saying that it is better to rent now vs. buy (let's say a 3 BR is $4k/month) and invest the difference. It's probably more like $7.5k per month when you factor home maintenance into it as well.

I assume your $7k/month also assumes you make a 20% downpayment?

Yes. And no, if I were to not have bought, I'd move somewhere where I can buy. I do not want to ever rent again. It's incredibly stressful.

[Anonymous]

I would buy a primary residence rather than rent and use the down payment for stocks, but I would rather buy stocks than buy a rental property if I already if I already owned my primary residence .

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mortgage/taxes/insurance is 3k/mo. If I were to buy the same home now it would be 7k/mo. I am SO glad I bought when I did, which was 2018 so not that long ago. In my area for 3k now you can rent a 2 bedroom apartment.

+1 Yes, home maintenance and other costs are expensive. The real benefits of buying are seen many years down the road when your fixed-rate mortgage payment is low relative to current prices/rents. In 20 yrs the person who bought the house with the $7k mortgage payment will be saying I'm so glad I bought when I did because to buy now would be $12k. And on it goes. I can remember when my parents' mortgage payment for a nice 4-bedroom house was $500. It felt "expensive" when they bought it.

Along the way, both the owner and renter are paying the maintenance costs, renters just don't see them allocated separately. IMO, the main benefit of renting is that you don't have to hassle with taking care of maintenance, the landlord has to do it. But you are also dependent on having a landlord who will do it.

Buying a house - if you stay and pay off the mortgage - lets you significantly reduce your housing expense in retirement. The owner is still paying taxes and maintenance. The renter is paying those + continuing to pay the landlord's mortgage + the part of the cost that is just meeting the current market conditions.

Not a real benefit because then they increase your rent the next year, and they decide who they hire and and often get someone cheap and awful/a worse appliance to save money since they don't care much beyond doing the minimum. Whoever does the repairs also knows that the landlord isn't here to check on the work, so they cut corners and do a sloppy job or take forever to complete the job. My mom is actually a landlady (she rents out my grandma's old home) and is a wonderful one: goes above and beyond, loves the property and maintains it as well if not better than her own home, is local so hires only skilled tradespeople she knows, does not raise the rent on tenants, but ime renting for years before I bought, she is very atypical.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mortgage/taxes/insurance is 3k/mo. If I were to buy the same home now it would be 7k/mo. I am SO glad I bought when I did, which was 2018 so not that long ago. In my area for 3k now you can rent a 2 bedroom apartment.

+1 Yes, home maintenance and other costs are expensive. The real benefits of buying are seen many years down the road when your fixed-rate mortgage payment is low relative to current prices/rents. In 20 yrs the person who bought the house with the $7k mortgage payment will be saying I'm so glad I bought when I did because to buy now would be $12k. And on it goes. I can remember when my parents' mortgage payment for a nice 4-bedroom house was $500. It felt "expensive" when they bought it.

Along the way, both the owner and renter are paying the maintenance costs, renters just don't see them allocated separately. IMO, the main benefit of renting is that you don't have to hassle with taking care of maintenance, the landlord has to do it. But you are also dependent on having a landlord who will do it.

Buying a house - if you stay and pay off the mortgage - lets you significantly reduce your housing expense in retirement. The owner is still paying taxes and maintenance. The renter is paying those + continuing to pay the landlord's mortgage + the part of the cost that is just meeting the current market conditions.

Right. Home ownership is definitely NOT a get-rich-quick scheme. When people say, “My house increased $100,000 in two years!” that doesn’t mean they now have an additional $100K in their bank account. They still have to sell it to realize those gains and then find a new place to live.

And sure, you can get a HELOC, but you still have to pay that back with interest. It’s not free money.

[Anonymous]

Anonymous wrote:

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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.


This is a troll post. So are you homeless now? Where do you live? Do you pay rent? Every rental owner I know includes the cost of property taxes, landscaping, maintenance of their rentals in the cost of the rent. You’re still paying for those things it’s just wrapped up in the rent and the rental owner thanks you for it.

Renting and owning are just lifestyle decisions really. Every homeowner pays for property taxes, landscaping, and maintenance as well. Those are costs that they have to figure into any appreciation they may or may not get upon sale. Everyone has to live somewhere. Renting is good if you don't want to make those landscaping and maintenance decisions and you may gladly pay whatever it costs to enjoy the landscaping and maintenance that is provided. You are paying the landlord to take the risk of homeownership (and yes, risk is involved). If the OP is happy renting, that's great. I think he is only pointing out that there is an argument to be made for renting, not that it is superior to owning. They are just two different ways of having shelter.

Fair enough. Renting vs ownership is a lifestyle choice. If I knew I was going to be somewhere for a short period of time I would probably rent. If you don’t want to have the responsibility of taking care of the landscaping or maintenance then rent (you’re paying for it anyway). But over the long run, home ownership from a financial perspective is so much better than throwing away rent. By the way, as a landlord, landscaping and maintenance is not a big deal. I have a landscaper who takes care of my rentals and I also have a handyman who takes care of most maintenance. The costs of all that is wrapped up into the monthly rent along with mortgage, insurance, taxes, etc and some profit.

In fairness, what you charge in rent is also based on what the market will bear...even if that's less than all your costs.

Also, you need to factor in vacancy rates and how that impacts overall returns.

I never had an empty rental for very long maybe a month at most in the 20+ years I owned it except when upgrading it between renters. And all of those upgrade costs are wrapped up into future rent increases those renters are paying. Yes the market dictates the rent. This has never been an issue for me and most owners I would think over the long run especially when you have governments who cap the amount of new development or make the regulatory burden of building new homes so arduous that it’s not worth it to build. Rent control only increases the scarcity of new rentals. Basic supply and demand. And the home I rent out is not under rent control but other properties around it are.

I’m myself a landlord (from 2008 ) in DC. No way you can “wrap up” all landscaping pest control and maintenance in the rent. Maybe landlords can wrap up their Ds into something but certainly not the rents.

In NW DC in my building the rents went from $1650/month for a small 1br in 2007 to $2150 in 2026. Zip codes 20007; 20008; 20009; 20010 standard class real estate. The property values (a quoted 6 units project) grew from 1.9m to $2.7 but nowhere near S&P.

While it is somewhat increasing, these rent increases are nowhere in pace with maintenance costs inflation or stock market growth on other assets. In other words, the renters are better off renting and investing in market

I only hold it because selling would realize too much income tax through depreciation recapture and cap gains

Provide your real life data - zip codes, rents etc.

PP here. My rental is not in DC. It’s in another expensive east coast city.

[Anonymous]

It's a hedge against inflation. And we will have a lot of that in the coming years.

[Anonymous]

Anonymous wrote:

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.


This is a troll post. So are you homeless now? Where do you live? Do you pay rent? Every rental owner I know includes the cost of property taxes, landscaping, maintenance of their rentals in the cost of the rent. You’re still paying for those things it’s just wrapped up in the rent and the rental owner thanks you for it.

Renting and owning are just lifestyle decisions really. Every homeowner pays for property taxes, landscaping, and maintenance as well. Those are costs that they have to figure into any appreciation they may or may not get upon sale. Everyone has to live somewhere. Renting is good if you don't want to make those landscaping and maintenance decisions and you may gladly pay whatever it costs to enjoy the landscaping and maintenance that is provided. You are paying the landlord to take the risk of homeownership (and yes, risk is involved). If the OP is happy renting, that's great. I think he is only pointing out that there is an argument to be made for renting, not that it is superior to owning. They are just two different ways of having shelter.

Fair enough. Renting vs ownership is a lifestyle choice. If I knew I was going to be somewhere for a short period of time I would probably rent. If you don’t want to have the responsibility of taking care of the landscaping or maintenance then rent (you’re paying for it anyway). But over the long run, home ownership from a financial perspective is so much better than throwing away rent. By the way, as a landlord, landscaping and maintenance is not a big deal. I have a landscaper who takes care of my rentals and I also have a handyman who takes care of most maintenance. The costs of all that is wrapped up into the monthly rent along with mortgage, insurance, taxes, etc and some profit.

In fairness, what you charge in rent is also based on what the market will bear...even if that's less than all your costs.

Also, you need to factor in vacancy rates and how that impacts overall returns.

I never had an empty rental for very long maybe a month at most in the 20+ years I owned it except when upgrading it between renters. And all of those upgrade costs are wrapped up into future rent increases those renters are paying. Yes the market dictates the rent. This has never been an issue for me and most owners I would think over the long run especially when you have governments who cap the amount of new development or make the regulatory burden of building new homes so arduous that it’s not worth it to build. Rent control only increases the scarcity of new rentals. Basic supply and demand. And the home I rent out is not under rent control but other properties around it are.

I’m myself a landlord (from 2008 ) in DC. No way you can “wrap up” all landscaping pest control and maintenance in the rent. Maybe landlords can wrap up their Ds into something but certainly not the rents.

In NW DC in my building the rents went from $1650/month for a small 1br in 2007 to $2150 in 2026. Zip codes 20007; 20008; 20009; 20010 standard class real estate. The property values (a quoted 6 units project) grew from 1.9m to $2.7 but nowhere near S&P.

While it is somewhat increasing, these rent increases are nowhere in pace with maintenance costs inflation or stock market growth on other assets. In other words, the renters are better off renting and investing in market

I only hold it because selling would realize too much income tax through depreciation recapture and cap gains

Provide your real life data - zip codes, rents etc.

You’re forgetting that renters still have to pay rent and then they put money into the market. Eventually the stock market will inevitably have a very large sell off $30-40%+) due to ridiculous valuations and we will be having a very different conversation. I’ll still own my home and rentals. And renters will keep paying my bills.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People VASTYLY underestimated how much home maintenance costs. And ignoring maintenance does not solve the problem. So being able to afford your mortgage AND being able to afford the maintenance needed every 5 years is not always the same thing. Some people think buying a new home gets them out of this. But appliances almost never make it to 10 years these days. And each home has thousands and thousands of dollars of appliances.

I've lived in my house 12 years and I've had to replace every single appliance in it. Some of them TWICE! We don't have much yardwork and I'm so glad because just the inside is expensive.

Correct. One simple roof repair after a snow storm cost $4k (I just did it last week). It ate 2 monthly rents on a spot. In a rental you will have to replace appliances every 5 years if you want anyone rent it. Pest control call is $1k ; plumber call $200 for diagnostic only ; water heater replacement $7-15k . I can go on

What kind of house are you in. A few terro is under $20, hot water heater 2-4k.

TPO white reflective roof roofers out of town cheaper than it would be with DC company; Carrier AC ; Bradford White 80 gal water tanks in each apartment. They cost $5k without labor

I got a 74 gallon from Lowe’s for I forget but about 1k and labor is about double that so max $2500.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People VASTYLY underestimated how much home maintenance costs. And ignoring maintenance does not solve the problem. So being able to afford your mortgage AND being able to afford the maintenance needed every 5 years is not always the same thing. Some people think buying a new home gets them out of this. But appliances almost never make it to 10 years these days. And each home has thousands and thousands of dollars of appliances.

I've lived in my house 12 years and I've had to replace every single appliance in it. Some of them TWICE! We don't have much yardwork and I'm so glad because just the inside is expensive.

Correct. One simple roof repair after a snow storm cost $4k (I just did it last week). It ate 2 monthly rents on a spot. In a rental you will have to replace appliances every 5 years if you want anyone rent it. Pest control call is $1k ; plumber call $200 for diagnostic only ; water heater replacement $7-15k . I can go on

What kind of house are you in. A few terro is under $20, hot water heater 2-4k.

TPO white reflective roof roofers out of town cheaper than it would be with DC company; Carrier AC ; Bradford White 80 gal water tanks in each apartment. They cost $5k without labor

I got a 74 gallon from Lowe’s for I forget but about 1k and labor is about double that so max $2500.

Would love to see what you bought for $1k and when.

[Anonymous]

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.

[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.

It’s costing us less than renting in this HCOL area. Maybe we’ll have bad luck and end up needing a huge repair, but so far, it’s been an opportunity to get some breathing room.

[Anonymous]

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.

Cool story bro but people who own there have 50% vacancy as it’s highly seasonal. States charge property taxes when landlords have access to more tenants. Lower taxes = higher vacancy rate by definition

[Anonymous]

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.

TX and FL have high property tax and relatively high sales tax (and the sales tax applies to much more stuff compared to other states) because they have no income tax.

You just happen to have picked a Red state where almost nobody lives so there is no need for much in the way of sales or property tax.