We seem to be in similar situations. I am 28 and trying to narrow down a place where I want to live. Luckily I have only payed about 30K in rent since living on my own.
Ma dukes says Im immature because I dont want a house
- Thread starter Ready,Willing,Humble
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It all depends on where you are in life though. Right now im paying 700 a month in rent, but for me to live in a house in a halfway decent neighborhood in a decent size home im looking at 1200 a month with the mortgage, insurance, property taxes, etc... For me Id rather take that extra 500 a month and live my life to the fullest while i am young.
I got friends who made the supposed sound decision to buy a home early and tie up a lot of money there and when me and my friends come back from our trips and vacations they always looking sad wishing they could have went. You cant put a price on great memories.
When me and my girl get married sure we will look into buying a house, as we will need the room for our family. But for a young person who has a lot of living to do and may not be tied down to a specific area i wouldnt recommend the first thing they do is try to buy a house. I plan on leaving Memphis in June and am glad i dont have to worry about trying to sell a house in this market.
Too many people take a look at what is best for their life at the time being and try to say that is also what is best for someone else.
Huellz Santana
Shocking
i feel like some of you guys aren't reading the thread.
i dont think anybody is saying they'll NEVER own a house, but for some people where they live and where they are in life, it doesn't make much sense.
i seen too many people buy houses and foreclose on them because it was the thing to do. even when they weren't ready.
also, when you buy a house its not even really about you. Your whole neighborhood has to be economically viable. I can't stress this enough. when I had my crib, shyt was cool until my neighbor foreclosed and mad folks started putting their homes up for sale. then when i needed to sell mine because I had to move for a new job I had to price it ridiculously low because of the market.
townhomes aint safe either. I got homegirl that bought a townhouse 20 mins from Spelman and half the houses in her development are now foreclosed on. So now, what was once a nice neighborhood with promise is getting filled with people who make much less money because the banks are eager to get SOMEONE in that house. so now this girl who lived around predominantly college kids, has neighbors who are dope boys and is watching her property value plummet. at least she can rent it tho.
i dont think anybody is saying they'll NEVER own a house, but for some people where they live and where they are in life, it doesn't make much sense.
i seen too many people buy houses and foreclose on them because it was the thing to do. even when they weren't ready.
also, when you buy a house its not even really about you. Your whole neighborhood has to be economically viable. I can't stress this enough. when I had my crib, shyt was cool until my neighbor foreclosed and mad folks started putting their homes up for sale. then when i needed to sell mine because I had to move for a new job I had to price it ridiculously low because of the market.
townhomes aint safe either. I got homegirl that bought a townhouse 20 mins from Spelman and half the houses in her development are now foreclosed on. So now, what was once a nice neighborhood with promise is getting filled with people who make much less money because the banks are eager to get SOMEONE in that house. so now this girl who lived around predominantly college kids, has neighbors who are dope boys and is watching her property value plummet. at least she can rent it tho.
nikka we all do so stop the BS. We're all pretty much one check from being homeless/poor. But wait I forgot this is The-Coli and everbody on here is making 6 figures a month right??
↓R↑LYB
I trained Sheng Long and Shonuff
Yes you can, the vacation industry does it every day.
We'll probably buy a condo and rent it out, maybe 2 of them since there's places in Westchester for under $100k. Our exodus from this country is within sight and the income from renting them out would allow us to live like royalty in another country.
All our money is going to savings, the last big thing I bought was my computer, and I pieced that together over a few months.
You missed the entire point of that post.
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I trained Sheng Long and Shonuff
ahomeplateslugger
Superstar
if you have the money to take on a mortgage, pay the property tax and need the space for your family then owning a home would be a smart investment. i think owning a condo would be a better investment for a single person or a couple.
do you have any kids? settling in another country with just your girl sounds nice but relocating a family sounds stressful. i would love to settle in a different country after i retire and have everything paid off.
do you have any kids? settling in another country with just your girl sounds nice but relocating a family sounds stressful. i would love to settle in a different country after i retire and have everything paid off.
$5OO is a big difference, but some areas the difference is only a few hundred dollars. I've said it before that it should be in a place you could see yourself living in forever. I am all for traveling, but that "living the life" mentality many of us have gets us into trouble because instead of trying to build some wealth out of it we are out there spending it recklessly. An extra $500 a month is a great opportunity to save or even start an online business relatively fast.
Field Marshall Bradley
Veteran
Categorically untrue
↓R↑LYB
I trained Sheng Long and Shonuff
Please explain breh.
Field Marshall Bradley
Veteran
It never made sense to me, even in my early 20s. But I'm short on time and will borrow words from this guy....
This only explains part of the reasons why its not a cornerstone to wealth..
Imagine a broker trying to sell you on the following investment:
A fund that if held over 30 years will probably net you not more than the rate of inflation. You, the average person, are lucky because you can borrow to get into this fund; you can pony-up 20% or more of its value but you will need to borrow a couple of points above the current inflation rate to do that. To get into the fund will cost you even more if you can't part with at least 20% cash. And by the way this is both a front load and back load fund, as it will cost you significant transactional costs to get into this fund (closing fees, taxes, etc.) and you will probably pay at least 6% to exit the fund in the future. And then there's an average maintenance cost of 1 to 3 percent per year, just to keep the fund in good shape. And you will always be paying taxes on the value of the fund while you have it.
The benefits of leveraging to get into this fund? Instead of paying certain taxes to the U.S. and your state, you get to pay that money to a banker. Any profit you have on selling this fund can be rolled tax free into a similar fund only. And after you've paid off what you borrowed just to get into the game, you own the fund outright, subject to those same taxes and maintenance which will never go away.
You'd have to be crazy to 'invest' in such a fund.
But for a house this is something many of us are willing to do because it is more than an investment. A house is a terrible tax shelter, probably will get horrible returns over time, costly on a year to year basis and for most people is probably not the best diversification strategy (holding REITS might be better). But it is an asset that is (or someday will be) ours -- we are the CEO of it and can to some limited extent determine its destiny.
Counting on a home for retirement? If it's got a nice porch and an idyllic view -- perhaps. But more important will be the (hopefully) many wonderful years spent in that home where it was one of many places a family has over the course of decades been able to convert earned money into valuable assets.
A home is probably one of the few tangible assets most people will ever be able to own and control, an asset that has at least a chance of holding its value over time. Just like most financial options available to most people it is really quite costly.
Yeah im saving too, i just like having that disposable income to be able to do some things while i have the time. Better to do it now while i can instead of later when i have a wife and kids to think of too.
↓R↑LYB
I trained Sheng Long and Shonuff
The problem with your analogy is the the belief that not investing in a home (even though I don't want to call it an investment) will allow you to invest your money other places. If you don't own a home, you're still going to have to pay for somewhere to live over the course of that 30 years. And as inflation increases, the amount you pay is going to increase over time as well.
Person 1) spends $750/mo in rent for 30 years. After 30 years he still has to pay for somewhere to live, and he receives no benefits (taxes, equity, etc) in the $270,000 he's spent during that time.
Person 2) gets a mortgage that costs him $750/mo and paid it off in 30 years. Now he no longer has that debt obligation, he can sell that property if he chooses to, and during the entire time that he owned that property he received tax breaks from the government for doing so. Plus for the rest of his life, he can take that $750/mo and invest it in something else.
Person 1 will still be paying rent, and person 2 can take his rent money and invest it some place else (like purchasing an income property that will generate revenue).
The #1 and #2 "bills" the average person has is taxes and housing. Home ownership is the way to remove that financial liability. That's why I say it's the foundation of building wealth. It gives you the ability to take the money you'd normally spend on having some place to live, and use that money to make you more money.
