why buy a house? - Page 3

 In article
noway@nohow.not says...

That last point can also be a problem if the market conditions
place your rent below the landlord's mortgage, etc expenses.

They may get rather resentful about losing money (in the short
term), and have a bad attitude towards the tenant, whom they view
as freeloading.

And it can get worse if there are unexpected repair/maintenance
expenses.  Or dumbass moves like unnecessary and expensive
upgrades that don't result in correspondingly higher rents.

Or the landlord may decide that they would rather lose a good,
long-term tenant, so that they can repaint and jack up the rent
for the next one.

It can be especially bad with a non-professional landlord who
only has that one rental property.


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Feh.  I bought a house when my landlord was being foreclosed on.  The
housing market in my area then took a dump, and I was not able to sell
due to the mortgage being upside-down.  In the meantime, I was having
to spend thousands of dollars on maintenance that I would not have
spent as a tenant, and at the same time was precluded from finding a
better house in a better market because I could not sell my own house.
I was finally able to unload my white elephant last year, and by then,
the market where I wanted to live had passed me by.  I am renting a
house now, and have no plans to buy.  Ever.

 Thank you all for your comments..

 

OK, I've seen this from both sides.  Previously was renting, currently own a
house (well, got several years of mortgage payments left, but . . .)

To make it VERY simple:

Unless your house or apartment is over-sized for your needs, then the
housing cost will be roughly equal.  That is, if your rent is currently
$1500/month (for example), then your total mortgage payment (including
taxes) will be about $1500/month.

But buying a house benefits you in two huge ways:

1)  You build up equity.  We just bought our house a couple years ago, and
we already have tens of thousands of dollars in EQUITY.  That is, if we sold
the house today, the mortgage company would cut us a check for tens of
thousands of dollars, after the mortgage is paid off from buyer's funds
(well, the buyer's mortgage bank).  This will be true for you also, unless
you buy in an area that is extremely economically depressed.  (like, the
largest and only employer in the area just moved operations out of the
country, for example, causing near 40% unemployment and a glut of
bargain-priced houses on the market)

2)  Thinking long term:  If you don't CARE to own a house, then you have a
really good reason to buy a house.  Even if you already have a good
retirement plan, you can use the house you buy to supplement it.  Look into
reverse mortgages.  By the time you retire, your house (if you bought one)
will be worth hundreds of thousands of dollars, and the mortgage will be
paid off.  In some cases, the house might be worth millions.  Have a bank
buy the house back from you by making monthly payments on it, TO YOU.  If
you're not sure whether you need a house, this is a GREAT way to plan to
supplement retirement income.  After all, if you aren't thinking of passing
off the house to grand-kids, use the house to supplement your income.  Why
not?

Or put really simple:  Every month you pay rent, you are throwing money
away.  -Dave

 Mike T. wrote:

Not where I live (Central Florida).  House prices have gotten way ahead
of rents.

Consider a $300,000 home in Orlando:

$60K down - opportunity cost @5% $250 / month
$240K 30 year mortgage @7% $1597 / month
Homeowners insurance - fire & casualty $135 / month - and no windstorm
coverage!
Taxes on $240K assessed value w/$25K homestead deduction - 15 mils $269
/ month

That's $2221 a month.

You can rent a $300K home here for $1750 a month or less - and have no
worries about maintenance or your home being destroyed by the next
hurricane.