Is a home an asset or liability?

[pauldun170]

Originally Posted by RACER X

and in the meanwhile your landlord is laughin his way to the bank, thanks for paying MY mortgage.

w/ your plan you have to pay for rent, save for buying your future home 20yrs from now and save for retirement.

and i agree w/ paul if your single and your age, i'd live like a college kid like you too.

Not only is he living like a college kid, (See Exhibit D: Messy apartment and See Exhibit F: floating ghost cocks) he's dating a college kid.

[Homeslice]

Originally Posted by Gay Fanboy

Yep you will just be paying on the principal by that time, congratulations!!! I'm sure that the bank totally appreciates your efforts to pay them interest for the last 20 years!

Most people I know pay more than minimum......They don't take the full 30 years.

Regardless, let's make it 30 years............Where will you be after 30 years? That's right, still paying rent, with nothing to show for it.......Nothing of value to sell.

Neither choice is right or wrong..........But for you to act like there's NEVER any financial advantage to homeownership is BS........There USUALLY is.

[Amber Lamps]

Originally Posted by goof2

Try renting in the DC area, California, or New York. For an accurate comparison you really need to compare housing prices in your area. You also need to use the value of a house that is similar in size, similar in amenities, and has very little land. In your costs you are also not factoring in the fact that interest paid on a mortgage is tax deductible. Rent is not.

None of that really matters though. There are a lot of reasons why people own a home rather than renting and only one of them is financial. If those additional reasons do not exist for you, great. You will be happier renting. If those additional reasons do exist you might want to consider buying. The decision is up to each individual, but any of the financial justifications that have been given, on either side, require future knowledge I'm pretty sure none of us have.

That's true... I posted from the beginning that I'm only in this for the argument but I do live my lifestyle for good reason. Most of you are right that these caparisons don't wash in either direction because the circumstances are intrinsic to the individual involved and not an across the board situation for everyone. I just like to argue and I knew that the homeowners here would come out in force!

[Captain Morgan]

Originally Posted by TIGGER

That's true... I posted from the beginning that I'm only in this for the argument but I do live my lifestyle for good reason. Most of you are right that these caparisons don't wash in either direction because the circumstances are intrinsic to the individual involved and not an across the board situation for everyone. I just like to argue and I knew that the homeowners here would come out in force!

Oh, and while it may sound like I'm arguing with you, I was just arguing the comparison factor. Hell, I rented until I was 35, but I was typically moving around a lot and never in one place long enough to buy a house. However, now I know I'll be here for quite some time, so I bought a house as it was the best thing for my situation.

[Amber Lamps]

Originally Posted by Homeslice

Most people I know pay more than minimum......They don't take the full 30 years.

Regardless, let's make it 30 years............Where will you be after 30 years? That's right, still paying rent, with nothing to show for it.......Nothing of value to sell.

Neither choice is right or wrong..........But for you to act like there's NEVER any financial advantage to homeownership is BS........There USUALLY is.

When did I say that? Oh and I'll have $300,000+ in an IRA if I were to put the entire difference away. Weren't you paying attention? Look, take your scenario. Your house appreciates 10% every year like clockwork, say $10,000 on an $100,000 house. Do you honestly mean to say that you believe that your house will be worth about $500,000 in 30 years? Right... I can say without a doubt that IF you run the course of the loan, you will pay about three times the original cost of the house or $300,000. That doesn't include taxes, repairs, etc. Yes I know that some people pay extra, I also know that a lot of people take out second mortgages as well. I know that there can be mitigating circumstances in any hypothetical situation. My criteria is IF you rent just the space you need, are single, childless and invest your "extra" money VS buying a house. At the end of 30 years, who will come out ahead? I think the renter will have more money in pocket. In fact, I believe that you will be selling me your house for about $150,000-200,000 and I will still have thousands of dollars in the bank.

[Amber Lamps]

Originally Posted by Captain Morgan

Oh, and while it may sound like I'm arguing with you, I was just arguing the comparison factor. Hell, I rented until I was 35, but I was typically moving around a lot and never in one place long enough to buy a house. However, now I know I'll be here for quite some time, so I bought a house as it was the best thing for my situation.

I agree because you have a child.. I honestly believe that children should be raised in a house if at all possible. Apartment living is no place for children imho.

[Flexin]

Originally Posted by TIGGER

Not to mention all the time. That's my main point. If you are single and childless buying a house is foolish, imho. As he said, if you pay half as much for housing in total, you have more money to play with, invest, etc. Again I pay $600/ month and someone else pays $1200 for payment, tax and insurance. Okay, now how much for trash removal? Yard work (equipment, time, etc)? Repairs? ETC? Now take that entire difference and drop it in an IRA, for example. Who would be better off in 20 years? I understand that you almost own a house by this time but I'll have enough money to go buy a house for cash! Shit most likely, I'll be able to find a nice foreclosure that one of you suckers just about killed yourselves and worked three jobs trying to keep.

But if your looking at a $600 a month apartment, in most cases you can't afford a $1200 a month house. My house was less then $100 more then the apartments I looked at and I didn't really like them. So that doesn't happen often. Plus do you put $600 a month in an ira? Some don't invest so they would be much better in a house because the would have something in the end.

Yard work? I rake a few times a year and I mow once a week. That isn't enough to make me want an apartment. The truth is I want a bigger house and yard. I pay nothing to have my garbage hauled away, that's the same for my green bin and blue bags.

James

[Flexin]

Originally Posted by TIGGER

Karl, I'm including everything and I realize that different markets have different numbers. Try telling me I'm wrong if you live in the DC area. How about parts of California? New York? There are parts of this country that you will pay $5000+ on a $100,000 house annually in taxes. Heck, some of you pay association fees monthly. Some of you pay for snow removal. ETC. I will never pay more than $600 total to live here for the length of my lease, period.

You keep forgetting something. Your not in those areas. Your comparing you $450 rent to places that have high taxes. Taxes can't be that high in your area or your rent would be much higher.

James

[Flexin]

Originally Posted by TIGGER

No of course I don't assume that. You're ASSuming that your property will always gain value. What I am saying is that I don't believe that your investment's value will overcome you TOTAL outlay in the long term. I acknowledge that it's possible to buy a house in a down market and flip it when the market turns for a profit. That's not what I'm talking about here. Anyway, I recognize that you home buyers are a fiercely proud group and even if I could categorically prove beyond a shadow of a doubt that I'm right, you would still argue the intelligence of your decision. Cool.

That's the thing. Your wrong in this case. You don't need to get 100% of your money back. Compare a $1000 a month apartment (just rent not including anything) to a $1000 hosue ( just the payment alome). The house owner might pay more for lights because the place might be larger and more in heat because of size and in an apartment you can get heat from the apartments below you if you not on the bottom floor. Both are payoing the same amout not counting utilitys, but in the end the house is worth something. The apartment is worth something but not to the renter.

Here is a quick question. Did Donald Trump get rich by renting?

James

[Flexin]

Originally Posted by Sean

Buy a house and make someone else pay you rent. Live in a cheap rent controlled apartment for many years. Win.

Or you find one with a built in apartment and have the renter pay most if not all of the payment while you live in the other part. When you have enough money you buy another house and rent the other part of the first house and put that towards the new house.

James