"Why I'll Never Own a Home Again"

[James81]

why i am never going to own a home again: Tech Ticker, Yahoo! Finance

Interesting little article about home ownership and the reasons why buying a house isn't necessarily the cheaper option or the investment you think it is.

I, personally, am more apt to rent right now than I am to buy a house. However, if you want to buy a house, now is the time to do it.

My reasons for opting for rent revolve around the ability to move around and change locations quickly, plus not having to worry about fixing things when they break.

I tend to agree that buing a house is not the "no brainer" that it's made out to be. There's lots of unmentioned costs involved with home buying that aren't mentioned when you are looking for a home.

At the end of the day, though, I think it revolves around what you value. If you're like me and you value mobility and lack of worry about things breaking, renting is probably going to be your better option.

If you value stability and the freedom to do with your house what you want, then buying a home is going to be your better option.

What's your opinion?

[elucidate]

I'm not really interested in a mortgage, or owning my own home...haven't been for over 15 years. I think it's a jip personally, and a very lucrative one for the banks. Make people think they are getting a deal by reducing interest rates, then after the first two years raise it again...sneaky.

I would love the freedom to be able to paint an draw on my own walls though...that's what my inner child really wants to do. But for now, I am happy to buy some butchers paper and stick it on the walls and paint or draw on that instead.

I also love to travel and have that sort of freedom.

I did once want to build my own home, and still kinda do...but I don't want a mortgage. I guess once I'm rich from selling my blooming vulva birds, I'll be able to.

[SnerpGoodWord]

All the points from the article are sound, and are some of the reasons I don't own a house. But there's one more, far more important than those mentioned: vacancies are already high, and in the next 20 years, the generation that's moving into retirement homes and downsizing (namely, the boomers) is bigger than the generations that are replacing it. Result: increased vacancies and falling prices.

We need to understand that over the course of the next 20 years, there are a lot of homes which will have a zero or negative price. We're already seeing that in Detroit, New Orleans, and a few other least desirable areas. But as vacancies increase, it will spread somewhat further.

At the end of the day, it's all about demographics.

[ssandra]

I value having the safety net that owning my own house represents. Not the investment part of it, but the part where nobody can kick me out, where it is mine.

I would of course always only go for a mortgage that I could easily afford on one salary, just in case something happens.... and only for a mortgage that is for 10, max 15 years, not more.

If I wanted to move around, travel for a long time, I'd rent out the house, to have some additional income.

but if the worst happens, and I have my house paid off..... I'll always have a place to sleep, a place where I can rent rooms for some additional income, and something to call my own.

[LostMyMap]

My opinion? This guy is a whiner and sounds bitter or something. I wouldn't take his writings as gospel. Look at some of his 'points':

A) Cash Gone. You have to write a big fat check for a downpayment.

This is false. There are many programs now with 3% down, if you a veteran, 0 down. You don't HAVE to write a big fat check. Might be a good idea to have a larger down payment, but that's a financial decision, not a ' have to'.

B) Closing costs.

Yep, there are closing costs. If you are a buyer, you can negotiate on this. Nothing is set in stone, everything is negotiable.

C) Maintenance. No matter what, you’re going to fix things.

This might be the biggest cost that homeowners overlook. Course if you own your place, you have a better quality dishwasher to begin with that doesn't break. And for bigger things, you get a line of credit from the bank and deduct the interest. (one place where more equity helps)

D) Taxes. There’s this myth that you can deduct mortgage payment interest from your taxes. Whatever.

Sure not a myth on my tax form! Whatever...

E) You’re trapped.

No your not. His whole argument about some corporate conspiracy is bogus. People mostly don't work for one corp. their whole lives anymore anyway, so it makes no sense. You can sell it, you can rent it, if you are in over your head you send the keys to the bank and move. "Trapped" is a false perception.

F) Ugly. Saying “my house is an investment” forgets the fact that a house has all the qualities of the ugliest type of investment

So what. I didn't forget that, so this statement no longer has a point.

I own as much for the non-tangibles as anything. If it was nothing more than an investment, I would have made a lot more in the stock market over the years.

Of course I have a rosy outlook because I live in a tradtionally desireable location. Location, Location, Location.

With interest rates being so low now, I'm looking at picking up an actual investment property back in my home town. Bummer is, investment properties require more down payment. But if I swing it, I can deduct some of my flights home to see family as a business expense! And have positive cash flow on rents.

[KaleidoskopicVision]

Originally Posted by LostMyMap

My opinion? This guy is a whiner and sounds bitter or something. I wouldn't take his writings as gospel. Look at some of his 'points':

A) Cash Gone. You have to write a big fat check for a downpayment.

This is false. There are many programs now with 3% down, if you a veteran, 0 down. You don't HAVE to write a big fat check. Might be a good idea to have a larger down payment, but that's a financial decision, not a ' have to'.

B) Closing costs.

Yep, there are closing costs. If you are a buyer, you can negotiate on this. Nothing is set in stone, everything is negotiable.

C) Maintenance. No matter what, you’re going to fix things.

This might be the biggest cost that homeowners overlook. Course if you own your place, you have a better quality dishwasher to begin with that doesn't break. And for bigger things, you get a line of credit from the bank and deduct the interest. (one place where more equity helps)

D) Taxes. There’s this myth that you can deduct mortgage payment interest from your taxes. Whatever.

Sure not a myth on my tax form! Whatever...

E) You’re trapped.

No your not. His whole argument about some corporate conspiracy is bogus. People mostly don't work for one corp. their whole lives anymore anyway, so it makes no sense. You can sell it, you can rent it, if you are in over your head you send the keys to the bank and move. "Trapped" is a false perception.

F) Ugly. Saying “my house is an investment” forgets the fact that a house has all the qualities of the ugliest type of investment

So what. I didn't forget that, so this statement no longer has a point.

I own as much for the non-tangibles as anything. If it was nothing more than an investment, I would have made a lot more in the stock market over the years.

Of course I have a rosy outlook because I live in a tradtionally desireable location. Location, Location, Location.

With interest rates being so low now, I'm looking at picking up an actual investment property back in my home town. Bummer is, investment properties require more down payment. But if I swing it, I can deduct some of my flights home to see family as a business expense! And have positive cash flow on rents.

As much as I agree with the premise of the article, that home ownership is unnecessary, the writer definitely makes a poor argument.

[Indiana]

I think that article is pretty flawed, including but not limited to:

1. The cash is not gone. When you cash out, nothing says you have to spend that on a new house. That's why my parents bought a second house, paid it off through rent, continue to receive rents on the asset, and will cash it out to free up a chunk of retirement income.

2. Misleading. Moving costs apply whether you own the house or not, and as a general principle, you'll move more often as a renter than as an owner.

3. Maintenance costs are built into rental costs by landlords. Just because you're not paying the plumber's invoice directly doesn't mean you're not actually paying it in the end.

4. Taxes: can't comment on it for the States but it worked jolly well for me, I effectively saved $20,000 through tax claims on my $400,000 property, which is a 5 percent gain.

5. Are you really trapped? In today's world remote working is increasingly common and b) the reverse side of the coin, as Ssandra notes, is that you're secure. Nobody can kick you out, raise your rent unexpectedly, tell you that you can't have any pets, refuse to let you decorate in the way that pleases you, etc.

Also, although there may be a few true nomads out there, I think in the main, people who "don't want to buy a house because it ties you down" believe that more to justify some kind of self-perception as the free-and-easy, unfettered type than as a true reflection on circumstance. If you ask most of them 'So, how many different cities have you lived in over the last five years then?' most of them are going to admit it's just one.

As for travelling - well, I've owned a home for eight years and in that time have travelled to 12 different countries. So it's not really that much of a ball and chain.

Anyway. In my country average time to sale fluctuates between two weeks and two months. That doesn't seem like an unbearably long time to wait to cash out an asset.

[Bradman]

There are some good points for either argument. I like having a home because I like to make improvements and I don't mind fixing things. I also like having a big yard with a fence so my dog can run around and I can relax there. I'm so lucky that I got mine when houses were cheap and it is paid for, even though the taxes are a pain, it's still cheaper then renting.

[openeyes]

On the financial side, rent vs own calculators can be useful:

Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com

For the next couple years we want to be able to move around, as Elle finishes up grad school and looks for a job, and then I start nursing school. We may rent for a while yet, depending on where we end up.

Rather than it being a financial investment, the main reason to own would be similar to what others have stated--having more control over what we do with the place, having a yard, a garden, a little workshop, etc. My dad and his dad both built their own home. No mortgage. Some of my friends have recently done the same, and it's possible that's what we'll eventually do. Elle's also warming up to the idea of setting up a yurt by her mom's house That's the house she's most likely to want to eventually buy anyhow.

[Lil Chris]

I thoroughly enjoy not having inconsiderate neighbors stomping around, blaring music, etc...

I bought my home with no money down (financed into purchase price) and had the seller pay full closing costs. Home ownership is nice.

[elucidate]

Originally Posted by Lil Chris

I thoroughly enjoy not having inconsiderate neighbors stomping around, blaring music, etc...

I bought my home with no money down (financed into purchase price) and had the seller pay full closing costs. Home ownership is nice.

I enjoy that as well...as a renter.

There have been some stompers in the past though.

[Tom Stevens]

I´ve been a home owner for the last 28 years and always felt that that´s the way I would be for the rest of my life. But the way the economy has gone over the last 4 years has made me rethink.

It used to be that home ownership was pretty much guaranteed to be a good investment, but not these days.

I think that in the future we may look to rent simply because of the ease of moving, finding you don´t like your neighbours and many other reasons.

But the main reason is where we live in Spain, you can spend your life savings on a house only to find you don´t actually own it. The property laws here are virtually none existent and because of that I think renting is a better option, for us anyway.

[ar81]

The best time to buy a home is when prices are falling and people are pesimistic and reluctant to buy a home. It is a matter of supply, demand... and fear.