Do you rent or own your home??

[Mickey D]

Unless it's paid for you do not "Own" your home, the mortgage company does. Same as renting only you pay the taxes and do the maintenance. When I retired I "downsized" my house and now only pay the taxes on it. It's all mine, mine, mine........

Also, you 'get' to not pay taxes on the loan interest. About the only upside.

 

[H Richard]

I'm retired, and that was the goal of retirement, NO DEBT. So I own my home, and all the benefits/headache's that go with it.

 

[Moonman]

There's TOO MUCH INFO on social media already.
Some people are just IGNORANT concerning the availability
of INFO and COMPUTER CAPABILITIES.

The future holds FEWER JOBS and SECURITY CLEARANCES for
those who have been too involved in social media comment and info handling.

 

[Wiredog]

Even if you have no mortgage you are still paying taxes though every year!!
So you're renting kind of.

 

[feralmerril]

I never had a house totaly paid off untill I retired. I either rented them and finaly bought and made payments untill then. As I retired I shuffeled everything in my life to own free and clear. A retired person shouldnt be makeing mortgage or rent payments! Had I not in our case we would be liveing in a cave or under a overpass!
From my prospective I belive the biggest thing wrong in this country has been this entire houseing thing. Newly married couples with brand new jobs think they deserve to live like their parents that worked for 50 years to get to where they are.
For many years we had this idea that all you had to do to get rich was buy a house way over your means and it would appriciate along with double digit inflation and it actualy worked for many years.
Young people with a short work history was liveing like old money millionaires used to!
Well like this new saying go`s, "How`s that working for ya?"
They tell me something like 80% of houses in this country are upside down and under water! People with the price of a postage stamp in their pocket was getting loans that no sane person that knows math would get. Houses were selling for 3 Xs what we all knew they really were worth! Didnt matter. Just sign here and if ya can hang on, in two-three years your net worth will be double! Ya will be worth more than your dork parents that worked forever for that shack they own cause WE are more sophisticated and smarter!

 

[MikeChandler]

I honestly wish I was a renter at this point. Renters are in better shape here in phoenix. My home is so upside down at this point that I could buy a whole other house, exactly or better than mine, for the amount I am upside down.

If things don't change in the next year, I'll be short-selling, and you'll find me celebrating my renter status.

 

[feralmerril]

There aint no free lunch. Love it when I hear some say they wont own because they dont want to pay property taxs or repairs. I am a slum lord myself. Ya better belive I figure those exspences when I tell our property manager how much rent we need when we advertise for new renters!

 

[Davwingman]

There aint no free lunch. Love it when I hear some say they wont own because they dont want to pay property taxs or repairs. I am a slum lord myself. Ya better belive I figure those exspences when I tell our property manager how much rent we need when we advertise for new renters!

I once saw a sign in a real estate office that went something like this:

Rent or buy, you pay for the home you occupy!

 

[feralmerril]

I know first hand of a lovely ambitious woman who is working three jobs. She got a divorice, remarried. Her ex ran off, doesnt pay child support, so she THOUGHT she just gave the nice house to the bank. In the interm she remarried. Now, the bank is demanding she come up with about 45K!. They can find her but cant find him.
This all happened when her new husband is trying to start a business and probley wont be able to get a loan for the business because of it!

 

[Pop's2]

How about those of us that own the house (mobile home) but rent the lot it sits on ?

 

[Goldstar225]

I never understood those who prefer to rent and avoid taxes, maintenance and the other "joys" of home purchasing/ownership.

When you rent, you are also paying to cover those costs on a monthy basis to the landlord plus his profit margin. The diffence is that at the end of 10/20/30 years, you're still paying rent with nothing to show for it.

Am I missing something?

 

[feralmerril]

Not so much now, but years ago the house buyer seen his house appriciate in value. A rent payment just went up with the times. However, everyones situation is different. Many people need to move to get work or keep their jobs. When you rent you dont feel as tied down. What percentage of us would move tomorrow to another location if we had nothing tieing us down and everything you own would fit in your car? I lived like that a few years when I was young. Life was a adventure, even if I was broke. It was almost liveing like the old tv series, "Route 66". Come to think of it, I did it the same years the show ran. 1960 through 1964.

 

[gregintenn]

I own mine, except for the small percentage Chase Bank still lays claim to. I would like to send them a final check, but so far, I haven't been able to get the wife on board. Maybe shortly.

 

[accessbob]

I never understood those who prefer to rent and avoid taxes, maintenance and the other "joys" of home purchasing/ownership.

When you rent, you are also paying to cover those costs on a monthy basis to the landlord plus his profit margin. The diffence is that at the end of 10/20/30 years, you're still paying rent with nothing to show for it.

Am I missing something?

Yep, you certainly are.

1. When owning - you have to take care of any problems that come up, whether it be roof, water heater, siding, floor that is disintigrating, heat pump that goes out, entire back door that is rotting away and needs replacing.

2. If you can do most of the work yourself, then it isn't mostly a problem. But I don't do that. I just am not that type and would need to hire someone to do that for me. I don't make enough to do that. I hardly am able to even put anything away for any kind of retirement (like that's gonna happen).


So, yes, Renting gives me the knowledge of a set amount that will be going out the door each month (I lease so it is usually set for a year) so budgeting is easy. When something needs fixing at the place I am renting, I call the landlord and it is their problem, not mine.

Yep, so I may have nothing at the end to show for it, but I sucked at owning (house literally was falling apart because I couldn't come up with the funds for materials alone let alone someone to actually do the work. So not anymore. It isn't for me. See that as strange, but it is what it is.

 

[jag312]

I own my house. The mortgage is paid off. It feels real good not to have to worry about a mortgage. I just have to pay insurance, property tax, and utilities. Did I say it feels real good?

 

[Poodle Soup]

Technically I own my own home... but the bank now owns my fathers home... and I owe my father 50 large... So whats that called?

 

[CAJUNLAWYER]

Think about it.
Do any of us really own anything?????? We start out as two incomplete cells-each contining 23 chromosonesthat somehow join and grow in an incredibly random cosmic accident and in the end-a breath of air blows away what is left of our decomposing corpses. In between we possess/use/sleep under/eat lots of stuff but what,if anything is actually ours that cannot be taken away on a whim by anyone or thing????

 

[BuckeyeChuck]

I never understood those who prefer to rent and avoid taxes, maintenance and the other "joys" of home purchasing/ownership.

When you rent, you are also paying to cover those costs on a monthy basis to the landlord plus his profit margin. The diffence is that at the end of 10/20/30 years, you're still paying rent with nothing to show for it.

Am I missing something?

A considerable amount, yes, all of which is rooted in the predictable cashflows associated with owning a home. Unlike what the banker and real estate agents tell you, a home is not an asset. A home is a depreciating property that provides a necessary utility and whose existence would be completely consumed by its use if no effort is put into its upkeep. I always roll my eyes when I hear "Your home is your biggest investment..." on the radio or TV. Aside from not needing whatever they're peddling, this statement is so far from truth as to be laughable. But very few people laugh.

What are these recurring cashflows?

(1) Taxes. Even on a home not encumbered by debt, the state has the power to claim deed to your property simply for failure to pay taxes. I've got friends in some of the ritzier suburbs of Columbus who pay the equivalent of $500/month or more in taxes. Some are paying closer to $1000/month in taxes. Think that's not "rent"? Think that you'll have "something to show" for paying these taxes? Think again.

(2) Repair, maintenance, and improvement. Houses deterioriate and do so fairly quickly. A shallow shingle roof will only last 20 years; better shingle roofs may last 30. Mechanicals may be severely degraded or completely nonfunctional in 20 years. In 50 years, many foundations need repair or shoring. Windows, doors, floors, and fixtures all wear out.

How much are these cashflows? Unless your home is new, you should plan on budgeting between 1% and 3% per year for these items. (A new home only defers these expenses, but they will be upon you sooner than you realize.) The first time you quote this figure, those who can do a little math in their heads immediately protest. "Those values are much too high!" These protests are only the product of inexperience. Suppose you own a 50-year-old 1000 square foot ranch with a full basement and detached 2.5 car garage in, say, Columbus, Ohio. Current value of the home: $100k. Cost of some work:

(1) New roof: $3500.
(2) Sump pump installation. (Code didn't require them in 1960 and footer drainage degrades over time.) $7500.
(3) Suppose you have some old cast iron drain pipes that are plugged and then corroded due to repeated use of alkaline drain cleaner. Plumber time is about $100/hour. A simple repair will easily be $300.
(4) Air conditioner: $2000.
(5) Furnace: $1750.
(6) Repair and resurfacing of above-grade cinder block foundation: $1000.
(7) Asphalt driveway sealing: $250 each year or every other year.

Add these things up and you quickly see that 1% is probably low. These costs go up with the size of the house, which also have higher value, so plan accordingly.

The upshot? If you turn tax, insurance, and repair, maintenance, and improvement into a monthly cashflow, you're going to find "rent" written all over your spreadsheet. Suppose you buy a home and...

... pay interest on it for 15 to 30 years.
... pay property taxes for 40 years.
... pay insurance for 40 years.
... pay for repair, maintenance, and improvment to maintain a certain standard while you live there
... pay a bunch of money to renovate the home prior to its sale
... and finally sell the home.

What do you think you'll "have to show" for it? You'll have some money, yes. But was it worth it? The answer to that is answered by an analysis of alternatives. And the spreadsheet would show that you paid *many* times over the purchase price of the home to live in it for 40 years. In short, you paid rent but you simply didn't realize it, choosing instead to deceive yourself that you're doing something financially beneficial. Well, probably not.

Your statement said "... except you're still paying rent." You are always paying rent, even if you own. Furthermore, the silliness of this statement should be obvious in the scenario I outlined above. If you sell the home, you no longer can live in it. Guess what? You'll be spending "what you have to show for it" on another property or... renting!

The idea that rent is wasting your money is believed only by the innumerate, which is to say, most of the American population. Rent is only waste if there are other smaller cashflows that could provide similar utility. You can become quite wealthy renting your entire life because your ability to build wealth is not dependent upon home ownership but rather, what you do with the money that you *didn't* spend on housing.

Even if your house shows a net positive return in four decades net of inflation (which is highly unlikely), it will be small. Furthermore, if your paid-off house is the largest store of wealth you have by the time you retire, you're in deep doo-doo. House as an investment. Bah! Humbug!

My wife has a cousin in his early 20's who just got married. In January he told me he and his wife were looking at condos to "stop wasting their rent". We had a very lengthy chat about the things he must assume to make this statement and how they aren't true. I encouraged him to keep renting because he doesn't know what life will hold for him in the next few years and mobility is far more impactful to his long-term wealth than any home he could buy right now. He smiled when I told him it was easy to get caught up in the excitement of the purchase, especially the dreaming of what it's like to be with your bride in your new house. I told him that this doesn't change whether you're 24 or 44. But don't get caught up in it. It will suck his current and future wealth away faster than he realizes. We'll see what he does.

My name is on the deed to two homes, one of which I call my residence. I bought very little home and now that we have three little guys who didn't exist when we bought the home, it's more crowded than it was when we bought it. Still, we choose to be content with what we have, knowing that our frugality provides freedom to other things with our money, including build true wealth outside of the house.

 

[ImprovedModel56Fan]

No, just asken. I owe on my home given to me. Not a smart Guy. No not.me. just wondering how normal folks on this site are doing. How can anything on the web be considered nosey? Just asken

Folks on this site may not be "normal." Many of us own a bunch of guns we don't need (not referring to the five or six guns each of us maybe does need). We have the money to do this. For reasons of age, good fortune, or whatever, many of us have a reasonable amount of "disposable income." We also mostly belong to a culture which values self-reliance. I am not surprised that the clear majority (93 to 5 at time of this reply) own their own homes.

 

[CAJUNLAWYER]

....I think it was Oneetotonkaowhachee who said...

"Who can own a mountain?"

Actually I think it was his little brother Ralph that said that .