Quote:
Originally Posted by drift freaq
Rules of thumb for house buying is keeping your mortgage,upkeep expenses and property taxes below what you would normally pay to rent. Now with that said Silverbullet is right. In a lot of situations these days renting is the better way to. You think you are doing something with the mortgage money because it's going there and not being squandered on rent. Like he said there are expenses some of that money is going to you never get back. Cost of living period. Ya you can try and look at a owning a House as an investment but if you do you are slipping into the same game that has a lot of people underwater now and in the last few years.
Houses are not meant to be investment vehicle. They are meant to be security so you raise a family in a nice neighborhood to send your kids to school. There is a reason a 30 year mortgage was the norm. People did not buy houses to trade up equity. Unless you are professional contractor or real estate person who specializes in buying houses fixing them and flipping them it's pure dangerous for the average consumer or home owner/ would be home owner.
There are exceptions and I know a few have spoken up here. It's just like buying and selling cars. Some can do it most cannot and fact is most should not.
People need to stop looking at houses like piggy banks. It's a roof over your head and a shelter from the storm.
Oh and there are other things to invest that yield much safer profits over the long term. Housing in this market where I live has indeed gone into another bubble. It is not as bad as the previous one but it's a bubble none the less. It will pop. If you are speculating onit you better be pretty smart to know when to pull out before it does.
Now if you went into thinking this is were I am going to live for the next 10-15'years or more and you meet the previous criteria I stated then it's not a bad thing. It may not be as great as you think though either
|
I normally agree with your posts, but here I strongly disagree with what you and Silver are saying.
We understand that rent is like a test drive and it's great for people that want that freedom and flexibility, and that's fine. However going back to my original point you can't say that renting and is financially more responsible or is a good business decision to one that can "afford to buy a home" because that is just not so. Looking at owning a home as an investment vehicle on the other hand is one thing. Most of us understand that nothing is guaranteed but paying rent is essentially paying someone else's bill except you have nothing to show for it in the end. Think about it. Yes you can move around and relocate, but you can you leverage your expenses and potentially make $$? Can you remodel, Can you sell? No, most cases no and definitely no. What exactly do you have in the end, your freedom, ok got it.
Also your notion of owning a home as being a security blanket for kids is very single sided and quite frankly just isn't so. There are many people here that still even in today's market flip coin on buying and selling or buying and renting properties for other "investment" purposes. There's a great term here that's huge among business owners, called "It takes money to make money" think about the landlord you're paying your rent check too and get back to me on all those ppl that are using homes as security blankets.
Put quite simply if you make a decision and it is within your means of affordability, the smarter thing to do is leverage what you have in attempt to have more. You can't sell what you don't own and that's the bottom line.
Risky lending has caused the housing industry to fail! Looking forward, If you can afford it after looking at your budgets/income/career, I would 100% say go out and get a house while you can. Now if your lifestyle says the latter, than by all means give that money to the landlord, the person most likely using you as his means to more.