<p>I thought this was kind of interesting since so many posters here seem to be selling and downsizing… What do you all think about this?</p>
<p>When I bought my downsized house, in an economy where I couldn’t tell what anything was worth, I added up the rent we would pay for 20 or so years to come up with a “reasonable price.” Of course house prices and rents will change over 20 years But I was pretty nervous about having my money in the bank or investments I couldn’t touch. I guess I could keep my cash in the bathtub like the author describes in the next part of the article.</p>
<p>Oh, I love this. Husband and I were married for ten years before we bought our house. Only able to do it when a rich relative left us a couple of thousand dollars to put the down payment down. We never could save a down payment, even though we didn’t live lavishly. We had to pay taxes on our salaries, and never had much left over.</p>
<p>The house has been a money pit. Constantly things needing repair. As husband works all day, five days a week, though he is pretty handy and fixes some things around the house, he cannot fix everything that needs fixing. There’s also the stuff that needs fixing by a licensed professional, like plumbing and a/c. Since husband was an electrical engineering major for a good part of college, he does a lot of electrical work around the house, but he can’t install a new a/c.</p>
<p>Then there’s my sister, who has never owned a house, lives in the same apartment complex husband and I lived in for ten years, and whenever her a/c breaks, her dishwasher floods, the street floods and ruins her floor, the maintenance department comes in and fixes it. She gets a new refrigerator periodically. Why, they even have just recently updated her floors, her cabinets and closets, as part of their complex wide renovation. Yes, they even did this on current residents, not just empty apartments they were looking to rent.</p>
<p>Sister has two children, where I could only afford one. She gets to go on a vacation every year. She has a job that she goes home at five o’clock, has her weekend free, and she and her husband together make less than my husband. </p>
<p>Only thing I wouldn’t give up about home ownership is my ability to have pets. I love my cats, and I would not want a landlord telling me I couldn’t have them.</p>
<p>Oh, lordy. A Yahoo Tech Ticker article! That cyberrag is full of pieces like this written by folks with a certain agenda. Either the sky is falling or everything is peachy.</p>
<p>Homeownership is NOT about investment. Period. It is about freedom to plant a tomato garden, painting your walls blue, and having cats. Without a landlord telling you what you can and cannot do.</p>
<p>I have to LOL about the tax part. If you rent, who do you think pays the property taxes? Do you think they are subsidized by your landlord? This article lost its credibility right there!</p>
<p>I had to laugh at the whole article. I mean no offense to anyone that rents but I’m commenting on what it said.</p>
<p>1) If you rent, your landlord has taxes to pay on the building. Who do you think he passes that bill off to? That’s right… to you. It’s part of the rent that you pay. So not only are you paying taxes, but you can’t even deduct them. I get a large chunk of money back at tax time because of my mortgage.</p>
<p>2) If you buy, and have your house paid off by the time you retire what bills do you have to pay? Just your taxes and insurance. No more mortgage. If you rent, what bills do you have when you retire? Oh that’s right… the same rent you’ve been paying all these years if not more as things don’t tend to get cheaper over time. Your bills aren’t going down. It’s like continually leasing a car. Believe me on this one, my customers that own their houses almost ALWAYS have more disposable income then the ones who rent apartments do.</p>
<p>3) oh, you rent so they fix your dishwasher for free. Wonderful. I didn’t realize anything was free. That service is included in the rent that you pay. If they didn’t have to estimate in how much repair work they are doing on your apartment your rent would be a lot less. So really, you are paying for your own repair work. Just slowly over time, regardless of if you need it or not. I’d rather pay 200 bucks for a plumber to come over then pay 50 bucks every month in rent to cover repairs.</p>
<p>4) Cash gone. Oh nooooooooo my cash is gone. Where is your 1,000 that you are sending in every month on rent? that’s 12,000 per year of true CASH GONE. Oh, and when you want to move… do you get to take any of that 12k BACK? No, you don’t. Your cash is truly gone. Every month that you live there, you give more and more money that you will never get back. Might as well put a little sign in your front yard saying “bottomless pit of cash gone”. Oh wait, you probably don’t have a front yard that you can put a sign in. Better hang it in your window. </p>
<p>Where is the 1,000 per month that I am mailing in on my mortgage? Well, yes, some of it is going to taxes and interest (ok, most of it) but the rest is going towards my principle which I can take out of it some day. Oh, and that 30 some k that I put in as a down payment? It may not be a giant investment but it’s money that I can take back if I decide to sell some day. Not exactly RIP $35,000.</p>
<p>I go back and forth on whether I could live in an apartment or condo, though the older I get, the more attractive it looks. DH and I still enjoy turning up the music quite loudly, though, and I wouldn’t want to be a bad neighbor. Additionally, I really enjoy lawn work (mowing, weeding, raking, etc.) but in my own yard only. I hate to say this but, as I get older, I find I’m less patient and more irritable, especially in situations where young children are involved. I think that’s because when I get home from work at an elementary school, I’m just ready for some peace, quiet and non-drama. My hope is that as I continue to get older, and our DD eventually (hopefully) has children, I’ll have rediscovered my patience. On one of our long walks this past weekend, DH and I pointed out houses in which we could eventually see ourselves living … two bedroom, two bath, one-level homes with zero lot lines.</p>
<p>Yes, I do realize I’m not really touching on the point of the article, but I went in a different direction … as I typically do. :)</p>
<p>I have looked at a lot of real estate the last few years & :(</p>
<p>In some areas the amount one pays in taxes and homeowner’s insurance will be greater than renting a nice apartment with a negotiated long term lease. Renter’s insurance is much less than homeowner’s even if you get all kinds of riders. In this instance a person who is renting rather than buying has the amount they would have put towards a mortgage to invest… right? Usually the high tax areas are the areas with the best schools and so very desirable for young families.</p>
<p>I bought when houses were low prior to the boom, sold at the peak in after housing went up 50% in a year, then rented as houses slid back down. Eventually I’ll buy again, this time when houses are low.</p>
<p>For the past four years, renting has been a better option that owning for me because of the falling home values. Tomorrow…who knows?</p>
<p>If someone rents an apt for what they would have spent in property taxes, insurance, maintenance … and banks the amount that would have gone for the mortgage… they also save all that interest, right? So - do they have enough at some point to buy for cash? Which, maybe, changes the whole equation?</p>
<p>My house is an investment in my quality of life. I love my house-it’s a sanctuary, and I feel happy every time I drive back up the driveway. I don’t regret one dollar we’ve spent on this home.</p>
<p>That said, we’ve made a good profit off of every home we’ve owned, and I’m confident we’ll do fine on this one as well.</p>
<p>I was thinking that home ownership gets my husband out of the house on weekends: mowing, seeding, raking, gardening. And in the winter he shovels. Ahhhh, life is good.</p>
<p>There’s a Tex-Mex themed restaurant up the road. It has a wonderful patio out back, perfect for sitting with friends. Drinks are $9 apiece. DW and I sit on the patio I built behind the house. Wine is $8/bottle … and we don’t have to be concerned with offending anyone with our conversation or laughter (or spilled wine!). Renting is fine if you plan to live quietly. Oops, gotta go. My D’s car needs washing … and that’s not permitted at her apartment complex.</p>
<p>alh–the problem is, in most areas, it would be a pretty tiny, run-down apt. if you could rent it for what you would have spent on taxes, insurance & maintenance only. And not large enough for a family, either.</p>
<p>Which is why young people should live frugally now and save their money for a healthy down-payment when they want to buy down the road.* </p>
<p>I had this conversation with a bartender once. He was making GOOD money, but couldn’t save for a house. They’re too expensive, he said. He didn’t realize his lifestyle at the time was interfering with his plans for the future.</p>
<p>*It is sort of a Catch-22–trying to save money while paying through the nose for an apartment.</p>
<p>I think it goes back to pride of ownership, and your mood of the day. I hate my house when I have to call the repairman, but I love it when I get to sit on the couch with my cats and when I no longer have to write the mortgage check.</p>
<p>Interesting how getting your taxes and insurance bill outside of your mortgage changes your view. You don’t feel that tax and insurance as much when it’s spread out over time, rather than getting that big bill once a year for the respective amounts.</p>
<p>Your needs do change over time. When you’re young, you look for a house where you can raise kids, send them to good schools. When you’re older, it’s a place to come home to relax, with low maintenance, just room enough for two. But also a place with a big enough yard for the grandkids to play in.</p>
<p>I envy people who have been able to buy one house after another, make a profit on the preceding home, grow with their family, and downsize with their old age. It was so hard for my husband and I to get into our one and only home, I can’t imagine how people do it. But I agree with an above poster, I definitely don’t want to be paying a mortgage while I’m old enough to retire.</p>
<p>Dumbest finance article I’ve ever read. I’m 54 years old. Have owned our house for 23 years. Had a fifteen year mortgage. House is now paid off, kids are out of college and we’re living well. Wouldn’t be thrilled to still be paying rent. Maintenace, taxes and repairs are way less than rent now. Even with declining housing values, as long as I don’t need to go anywhere, I’m really happy.</p>
<p>That’s what I love about home ownership–that and the fact that the rents don’t keep increasing (which drove me nuts). </p>
<p>But a home can be a ball and chain…I know one couple who would like to relocate but are underwater on their home to the tune of $25,000. When you rent, you can pack up your bags and move on.</p>
<p>Love the carwashing point. I am amazed at how some subdivisions have such rules. When living in Houston, we looked at a place where you couldn’t have your car parked on the street at night. In the suburb one over from ours, you are only allowed to have two pets. </p>
<p>Thank you for these posts. Y’all are making me appreciate my money pit.</p>
<p>Twice we bought houses that were on the fixer-upper side. We were young and thought we could do anything (and frankly, anything we did improved the value of these dumps.) In the beginning, not having kids yet gave us more freedom to do the work. </p>
<p>It was worth it to sell the houses for more than we bought them for and get into a house that was finally big enough for all of us and a grand piano! But I don’t know about downsizing…moving & packing are so painful, (and we have STUFF) so I never want to go through them again. They can carry me out feet first for all I care. (And the current house is perfect for grandchildren visiting too, so why downsize?)</p>
<p>We recently moved to a different area of the country (downsizing to a 2 bedroom house) and are expecting grandchildren in the next couple of years Originally I planned a small guest house for the children/grandchildren … I know, kind of puts a different spin on downsizing… but since the children really aren’t all that enthusiastic about visiting us here, we are doing the group vacation bit for the time being. We can take a whole lot of really nice trips for the cost of the guest house. Also, maybe it makes more sense to just go visit them? I am mulling this all over.</p>
<p>Although I have always adored and cherished family holidays, I absolutely hated having to fly with infants, and then toddlers, and then young children, and then teenagers for years and years.</p>
<p>Sing it! The author of the linked piece says that he doesn’t like feeling “trapped”, that he likes to move around for a change of pace. Which is fine, and of course he shouldn’t be buying. Those of us who like staying put have a different take on things. </p>
<p>Like others, we love our house. Unlike the author of the article’s doomsday scenarios, the financials have worked well for us. We bought when the market was low, didn’t pull money out when refinancing. Our mortage interest deduction is significant. When I look at the cost of post-deduction mortgage plus property taxes, we are paying less than we’d need to pay to rent something in our neighborhood that was far smaller. From a squinty-eyed green eyeshade point of view, it’s been an excellent investment. But it wasn’t bought with that in mind, and we don’t think of it that way. </p>
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<p>:rolleyes: When my dishwasher doesn’t work, I call Sears, order a new one, and the guy from Sears comes and installs it. Same deal. As others have said, the cost of replacing equipment is included in the rent. The author of the piece, in the continuation, writes " People will argue that the price of the mortgage, maintenance taxes, etc is all baked into the price of rent. Sometimes this is true. But usually not." Look out, I’m going to :rolleyes: twice in a paragraph. Unless you live somewhere with incredibly tenant-friendly rent control laws, of course the mortgage, maintenance, taxes, etc is all part of the rent. The landlord is not being a landlord because it’s fun. The landlord wants to make money.</p>
But I was pretty nervous about having my money in the bank or investments I couldn’t touch. I guess I could keep my cash in the bathtub like the author describes in the next part of the article.</p>
Originally I planned a small guest house for the children/grandchildren … I know, kind of puts a different spin on downsizing… but since the children really aren’t all that enthusiastic about visiting us here, we are doing the group vacation bit for the time being. We can take a whole lot of really nice trips for the cost of the guest house. Also, maybe it makes more sense to just go visit them? I am mulling this all over.</p>