Quote:
Originally Posted by PhillyRising
Renting has worked wonderfully for me.
I "owned" two different houses from 1994-2014. If I could go back to 1994, I would have never bought a house. Not everyone is meant for home ownership. I am not handy. I hated having to maintain the houses. The first house was my parents house that needed a lot of work. The cost of the house wasn't the issue but I got myself into debt trying to fix it up. Sold that and made hardly anything on it (because it was in Norristown where you can't give homes away) because we wanted a brand new house in 2001. Still had the debt and now a bigger house payment. Total disaster and all our fault. After 13 years the house did appreciate about 80 grand over what we paid for it but then after all the closing costs and giving "buyers assistance" we only netted 60K. It made zero sense to keep that house. I was Pushing 50 years old with 20 plus years left on that mortgage (we refinanced twice) and having a whole lot of replacement on the horizon over the next 5-10 years of the roof, HVAC systems, the windows were crappy builder grade so they needed to go, new driveway, new deck, new applicances and most likely bathrooms needing full renovations..all while still paying the mortgage for the original house so I would still be paying for what I would be replacing and paying for that too..it was not a winning formula. I was only putting 6% into my 401K because I needed to keep money liquid in cash...oh I don't know...garage door needed replaced or the heater goes out again...and there was always a threat of an HOA assessment. The thing that broke the camels back was when high winds blew off a quarter of our neighbors 13 year old roof. I was done. I wanted no part of keeping up a house. Why should I keep paying this interest to a bank and have to pay all the upkeep. The tax benefit on a mortgage is barely worth it after 15 years on a 30 year mortgage. The amount of interest you wind up paying if you don't get a shorter mortgage is highway robbery.
After we cashed out, I upped my 401K to 11% and saw it add 200 grand in 5 years. My old house has only appreciated 27 grand in 5 years per Zillow. It was also a suburban townhouse which don't hold their value all that well as they age.
So this whole owning is always better than renting is just not true. It depends on the person and what they desire. I desire not having to be bothered with fixing anything and I like convenient living. So when something breaks, I want to call the landlord and make him come fix it. I want a pool but I don't want the cost of one. I want a free gym. See...you can get all that with renting. So I do not believe I am tossing my money away. I am paying for the lifestyle that I desire. I have more money now than I ever had in my life. I don't stress about bills. I don't stress about what needs to be replaced or fixed. It is just not what I value.
However if you have kids, you plan to settle in an area for a long time, then yes you want to get a house. If you have money for a big down payment, it's a good deal especially if you can do a 15 year mortgage. A 30 year one is dumb to me. I would never do that again. I also think people need to put down at least 30 to 40 percent on the purchase of a home. You want a lot of equity from the start. Also, it helps to be handy and do a lot of things yourself. A home is not a good investment. It's just an asset that you pay a lot of money on and you can use years down the road.
All I can say is I've never been happier since I went back to renting. I am debt free after years of carrying heavy debt owning the houses. it also helps I live in a planned community that embraces walkabilty and has amenities at my front door. But what is good for me, will not be good for all. So I don't tell people who buy they are crazy. I just wish them luck and hope they don't make any of the mistakes I made..
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I'm not sure anyone is advising that home ownership is ALWAYS better than renting as you claim, that's a pretty stupid comment, isn't it? Always and Never are two words that should not be used with investing and real estate as every situation is unique.
It sounds like you had a bad experience owning a home, which based on the little information you provided, is probably based on poor decision making on your part, rather than home ownership as a whole.
Generally speaking, buying more house than one can afford or buying a home that needs more work than you are willing to take on is usually not a good idea.
Also, your "advise" about 15 year mortgage and 30-40% down is somewhere between bad and terrible advise for most people, especially young/first time home buyers.
Have you seen interest rates lately, why on earth would you take a 15 year mortgage? It makes no sense; and 30-40% down? that typically won't buy your rate down, and that additional money is probably better used invested in something that will get you a 8% return or better.
Like any investment, it isn't wise to invest in something you don't understand. Perhaps a little more research would have been a good idea?
I'll say it again, for the vast majority of Americans, home ownership is the #1 wealth building vehicle out there.