Posted on 12/29/2006 6:45:01 AM PST by Labyrinthos
Breaking News .... broken clock right for second time in one day!
I never said that you should rent and I own a home with a mortgage. All I said was that on a monthly basis while I live in the house it costs me money and so is a liability. It can be turnd inot an asset when you sell and is the best kind of liability to own. I am not advocating renting at all, merely stating the monthly impact of paying for a house.
"Illogical,"OK, first my post was not a statement to be taken as logical or not. It was a question and a rhetorical one at that.
"...that liability comes out of your bank account, decreasing that bank account in pure reality;..."Sounds like you are talking about paying rent here.
"...meanwhile, one's ethereal rise in value in the home one lives in doesn't fill up too many bellies on that side of the mortgage."Except when you sell it that is.
Truth is that neither renting or mortgages are inherently better. Like so many other things in life, it just depends on the many variables involved.
I rent, and I'm not gloating. As my late daddy would say, I'm throwing "good money after bad". I'm divorced, and financially can't afford to buy now, but hopefully sometime soon will.
I can't imagine anyone actually CHOOSING to rent than buy.
I would be gloating also. The "not buying" rationale is just an excuse people have for never stepping up to the plate.
I am in a very good market and have paid my mortage for 16 years. Most of it was deductible. I now get a third of the monthly mortgage back in increased equity. The equity has become substantial.
To rent the same house I would have to shell out another 1,000 per month. Counting the lost equity and tax qrite off, it would probably cost me $2,000 more a month in real cash flow.
Some 401(k)'s allow a portion to be invested in other markets.
One exception to the silence has been trains rolling south a few miles from here and blowing their horns like Casey Jones on triple time.
I can get you a place in Simi Valley for 80K. It's a mobile home park. These are not trailer parks. Those houses are very nice. It costs only $700 to rent the land you are on. In a place that has $1M places nearby. Take the 118 FWY and go south on Madera Road towards the Reagan library. Make a right turn at the ARCO station on Tierra Rejada. It's about a mile down the road on the right side at the traffic light. Check it out.
I know. When you can leverage the investment for 9-10 times like you can in real estate, let me know.
Tens of millions of similar stories over the years in the US. Thanx!
I hit a pedestrian a couple of months ago. It was CLEARLY his fault, but he still retained an attorney. Since I don't own a home, there is really not much THAT THEY KNOW OF that they can go after. It is really a disincentive.
It is amazing how legally untouchable one is perceived when they rent. ;)
In this litigous society, that has serious "quality of life" value.
I pay $1,600 a month rent in a home that is appraised at $500k.
The math is pretty easy...
I admit that if I had known back in 99 that we were in for the biggest bubble in history, I would have bought then. But at least rent has been flat (and maybe even gone down a little) since then.
I was a homeowner for twenty years. I have been a renter now for nine, and LOVE IT.
>>"Timing is everything."
Yep. Bought my 4/2 2550 sq. ft. in 2001 for $181,000. (Needed a little TLC) it is now worth $400,000. Can't afford to move. All who bought before the overvalued boom are sitting pretty. This renter is just trying to justify his poor timing. Cheers!<<
To a point I agree, but his timing isn't as poor as the guy that actually buys it at $400,000.
>>The money that goes towards rent goes NOWHERE.<<
Where do your real estate taxes and interest go when you "own"?
Nobody owns real estate in the US. They rent it from the government. And if they build improvements on it, the rent goes up.
>>It would be impossible to balance books under your 'defintions'.<<
Yes, but "books" are by definition only value "on paper" as opposed to "true value".
"He recalls shouting "Wow!" when he heard about September's 9.7% drop in prices of new homes. "
Idiots. The drop in prices only applies if you SELL!
I road out the housing slump in 1989. I tried to sell my 1985 new home but even at 10% below my mortgage, I couldn't attract even a looker. Six years later I sold for a 25% profit!
Not necessarily
Homeowners build equity, even with flat markets, especially with 15 year repayment schedules.
The real choice is quality of life. Can you rent the same location for less than the cost to own and stay there ?
It is just getting worse and worse: http://news.google.com/news?hl=en&ned=us&q=foreclosures
I've been doing this at least four times a week since mid summer.
The trend is pretty clear.
Obviously the rental slump has not hit the Southern California area, and probably won't. I have NEVER heard of a rental price being lowered in all the years I have lived here, and I have always been a renter.
Where the heck do you live? I wanna move there! My significant other and I have portable jobs which we can take with us! I'm not kidding. Freepmail me if you don't wanna post it in the forum. TIA.
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