The true cost of owning a home - GoFuckYourself.com - Adult Webmaster Forum

X

Barefootsies

Choice is an Illusion

Join Date: Feb 2005

Posts: 42635
Share

Post
#1

The true cost of owning a home

06-20-2007, 01:37 PM

Your mortgage payments are only a fraction of what you'll pay out after you become a homeowner. The total? For this writer, $43,555 in four years, not counting house payments.
By Cameron Huddleston, Kiplinger.com
? Images.com/Corbis

* Kiplinger.com: Buying your first home
* Kiplinger.com: Don't rush into a new home
* Kiplinger.com: What your home is, and isn't

If you're entertaining thoughts of buying your first home now that the housing market is cooling off and prices are coming down, take note: The cost of home ownership might be a lot more than you think.

I'm not talking about the down payment or monthly mortgage payments. Although buying a home is a big investment, owning one comes with a new set of expenses you may not have had while renting or living with Mom and Dad. These extras can put a strain on your daily finances if you aren't prepared.

I know the temptation to buy a house can be strong, especially if you've been renting for a while, have gotten married or are ready to start a family. When my husband, Alex, and I moved to Kentucky four years ago from Washington, D.C., where we rented an apartment for six years, I couldn't wait to buy a house. Since then, we have sold our first home, bought our dream home (well, at least it will be after we do a lot of work on it) and learned plenty about how much it really costs to be homeowners.

So to help you estimate your own cost of ownership and come up with a realistic housing budget, I offer my experience as an example. Below, I itemize the expenses Alex and I have paid over the past four years, complete with dollar amounts. Your own costs will vary depending on the size, condition and location of the house, but this should help you anticipate what you're getting into. Homeownership comes with a bevy of benefits, but you'll want to make sure it's the right move for you at this point in your life before making that long-term commitment....

continued
http://realestate.msn.com/buying/Art...0274&gt1=10130

Should You Email Your Members?

Link1 | Link2 | Link3

Enough Said.

"Would you rather live like a king for a year or like a prince forever?"
Tags: None
latinasojourn

Confirmed User

Join Date: Oct 2003

Posts: 3191
Share

Post
#2

06-20-2007, 02:54 PM

Originally posted by Barefootsies

Your mortgage payments are only a fraction of what you'll pay out after you become a homeowner. The total? For this writer, $43,555 in four years, not counting house payments.
By Cameron Huddleston, Kiplinger.com
? Images.com/Corbis

* Kiplinger.com: Buying your first home
* Kiplinger.com: Don't rush into a new home
* Kiplinger.com: What your home is, and isn't

If you're entertaining thoughts of buying your first home now that the housing market is cooling off and prices are coming down, take note: The cost of home ownership might be a lot more than you think.

I'm not talking about the down payment or monthly mortgage payments. Although buying a home is a big investment, owning one comes with a new set of expenses you may not have had while renting or living with Mom and Dad. These extras can put a strain on your daily finances if you aren't prepared.

I know the temptation to buy a house can be strong, especially if you've been renting for a while, have gotten married or are ready to start a family. When my husband, Alex, and I moved to Kentucky four years ago from Washington, D.C., where we rented an apartment for six years, I couldn't wait to buy a house. Since then, we have sold our first home, bought our dream home (well, at least it will be after we do a lot of work on it) and learned plenty about how much it really costs to be homeowners.

So to help you estimate your own cost of ownership and come up with a realistic housing budget, I offer my experience as an example. Below, I itemize the expenses Alex and I have paid over the past four years, complete with dollar amounts. Your own costs will vary depending on the size, condition and location of the house, but this should help you anticipate what you're getting into. Homeownership comes with a bevy of benefits, but you'll want to make sure it's the right move for you at this point in your life before making that long-term commitment....

continued
http://realestate.msn.com/buying/Art...0274&gt1=10130

the true cost of home ownership has to be figured after factoring in the income tax bracket of the owner(s) and whether or not it is owner occupied, or a rental (different taxing structures, depreciation, etc)

for most people (at least in USA) the major benefit is in the taxes.

for example, if you are single, have a high income, and rent a luxury 2br apt for $2000 per month you have no tax advantage.

buy the same property and have a mortgage of $2000 per month and change your federal income tax withholding to get more exemptions and keep an extra $1000 month in take home pay which makes your true out of pocket living charge $1000 per month.

plus you get the upside in any appreciation.

if you don't own property you need to if you want to acquire an estate.
Comment
Snake Doctor

I'm Lenny2 Bitch

Join Date: Mar 2001

Posts: 13449
Share

Post
#3

06-20-2007, 03:06 PM

True the cost of being a homeowner is more than just the mortgage payment.

However all things being equal, it is cheaper to own a home than to rent one.

Unless you live in a weird housing market.
If being a landlord is a profitable business, and the landlord has the same expenses as the average homeowner (usually more expenses) then logic dictates that it's more expensive to rent.

sig too big
Comment
Peaches

Old broad

Join Date: Oct 2002

Posts: 13933
Share

Post
#4

06-20-2007, 03:11 PM

I usually spend an extra $7-10K a year on my house:

Generator
Fence
Paint all the exterior
Paint all the interior

Next year I'm either redoing the kitchen or the dock. Probably the kitchen ;)

But in 6 years, the appraisal on my house has more than doubled. The things I've put $$$ will all help the value. Very few repairs - maybe $500 a year average.
Comment
IllTestYourGirls

Ah My Balls

Join Date: Feb 2007

Posts: 14311
Share

Post
#5

06-20-2007, 03:15 PM

Originally posted by Peaches

I usually spend an extra $7-10K a year on my house:

Generator
Fence
Paint all the exterior
Paint all the interior

Next year I'm either redoing the kitchen or the dock. Probably the kitchen ;)

But in 6 years, the appraisal on my house has more than doubled. The things I've put $$$ will all help the value. Very few repairs - maybe $500 a year average.

Great your house has doubled! But so has all the other houses just like yours. So really your house has not done much for your bank account unless you want to downgrade your house the next time you buy.
Comment
Peaches

Old broad

Join Date: Oct 2002

Posts: 13933
Share

Post
#6

06-20-2007, 03:16 PM

Originally posted by IllTestYourGirls

Great your house has doubled! But so has all the other houses just like yours. So really your house has not done much for your bank account unless you want to downgrade your house the next time you buy.

Actually that is my EXACT plan I plan on getting a small house in a smaller town.
Comment
IllTestYourGirls

Ah My Balls

Join Date: Feb 2007

Posts: 14311
Share

Post
#7

06-20-2007, 03:19 PM

Originally posted by Lenny2

True the cost of being a homeowner is more than just the mortgage payment.

However all things being equal, it is cheaper to own a home than to rent one.

Unless you live in a weird housing market.
If being a landlord is a profitable business, and the landlord has the same expenses as the average homeowner (usually more expenses) then logic dictates that it's more expensive to rent.

It is almost always cheaper to rent than to own. I rent right now, and if I were to buy the house I am renting I would be paying close to double what I am now. How? Because the landlord bought the house years ago and has a low payment. That is the case with most houses for rent.
Comment
IllTestYourGirls

Ah My Balls

Join Date: Feb 2007

Posts: 14311
Share

Post
#8

06-20-2007, 03:19 PM

Originally posted by Peaches

Actually that is my EXACT plan I plan on getting a small house in a smaller town.

then woot woot enjoy the cash haha
Comment
latinasojourn

Confirmed User

Join Date: Oct 2003

Posts: 3191
Share

Post
#9

06-20-2007, 03:27 PM

Originally posted by IllTestYourGirls

So really your house has not done much for your bank account unless you want to downgrade your house the next time you buy.

not exactly.

the equity in the house is the same as money in a savings account at the bank.

if the homeowner dies and his children sell the house they get the real cash (less estate taxes) to go buy something with real money.

after the mortgage is paid the homeower can live in the house and just pay taxes, insurance, and repairs. he can move out and rent out the house on a triple net lease and pocket most of the cash.

lots of misinformation about renting vs buying.

the ONLY time it makes financial sense to rent is when you are renting SHORT term while looking for a good deal to BUY.

there are other advantages to buying real estate, and have to do with leverage, refinance to pull cash out, tax deferred exhanges, deductions to reduce your income tax, pride of ownership, insulation from rental increase, etc etc.

the tax incentives are real, and you should own instead of renting to acquire any real wealth in america.

i get a kick out of the kids that put pix of their BMWs and MBs in gfy.

if they want show some financial sense they should put the pix of the run down 2 flat they just bought and are fixing up. because in 10 years time they won't have to lease the beemer, they can pay cash for it.

and the renter will still be renting.
Comment
Snake Doctor

I'm Lenny2 Bitch

Join Date: Mar 2001

Posts: 13449
Share

Post
#10

06-20-2007, 03:38 PM

Originally posted by IllTestYourGirls

It is almost always cheaper to rent than to own. I rent right now, and if I were to buy the house I am renting I would be paying close to double what I am now. How? Because the landlord bought the house years ago and has a low payment. That is the case with most houses for rent.

No it isn't the case with most houses for rent.
Perhaps that's true in your area, for now, but that scenario will never hold up long term.

Otherwise owning rental property would be a horrible investment. You're supposed to take a loss on the rental for the first 10 years until the market catches up with you?

Hogwash.

Right now there are alot of areas where the housing bubble has yet to pop, and housing prices aren't in line with market fundamentals (average income for the area, average rent for the area, etc) but those things will all line up eventually.

sig too big
Comment
Barefootsies

Choice is an Illusion

Join Date: Feb 2005

Posts: 42635
Share

Post
#11

06-20-2007, 04:33 PM

Originally posted by Lenny2

No it isn't the case with most houses for rent.
Perhaps that's true in your area, for now, but that scenario will never hold up long term.

Otherwise owning rental property would be a horrible investment. You're supposed to take a loss on the rental for the first 10 years until the market catches up with you?

Hogwash.

Right now there are alot of areas where the housing bubble has yet to pop, and housing prices aren't in line with market fundamentals (average income for the area, average rent for the area, etc) but those things will all line up eventually.

True.

However for my market, I have been spending the weekend's cruising neighborhoods, and I see the prices falling like a boulder in some of them. They are roughly $20-30k still over where they should be (except lake front which is still insane but falling) but they are coming down.

By the end of the summer there should be some sweet deals for me to snag up.

Should You Email Your Members?

Link1 | Link2 | Link3

Enough Said.

"Would you rather live like a king for a year or like a prince forever?"
Comment
tranza

ICQ: 197-556-237

Join Date: Jun 2003

Posts: 57559
Share

Post
#12

06-20-2007, 04:44 PM

Just passing by.........

I'm just a newbie.
Comment
tony286

lurker

Join Date: Aug 2002

Posts: 57021
Share

Post
#13

06-20-2007, 04:54 PM

Now that Im a home owner, I miss being a renter to tell you the truth.Anything breaks they come to fix it, I miss having a dumpster and now I feel like my life options are fewer that Im in a house. I cant just pack up and go.
Comment
Peaches

Old broad

Join Date: Oct 2002

Posts: 13933
Share

Post
#14

06-20-2007, 04:58 PM

Originally posted by tony404

Now that Im a home owner, I miss being a renter to tell you the truth.Anything breaks they come to fix it, I miss having a dumpster and now I feel like my life options are fewer that Im in a house. I cant just pack up and go.

Sell your house and rent again. It's easier to go from owner to renter than the other way around.
Comment
Barefootsies

Choice is an Illusion

Join Date: Feb 2005

Posts: 42635
Share

Post
#15

06-20-2007, 05:01 PM

Originally posted by tony404

Now that Im a home owner, I miss being a renter to tell you the truth.Anything breaks they come to fix it, I miss having a dumpster and now I feel like my life options are fewer that Im in a house. I cant just pack up and go.

Really? Wow.

I thought that whole "home owners pride" was supposed to make you feel like a king..

Should You Email Your Members?

Link1 | Link2 | Link3

Enough Said.

"Would you rather live like a king for a year or like a prince forever?"
Comment
pornask

So Fucking Banned

Join Date: Aug 2006

Posts: 6518
Share

Post
#16

06-20-2007, 05:08 PM

Originally posted by Barefootsies

If you're entertaining thoughts of buying your first home now that the housing market is cooling off and prices are coming down, take note: The

This is definitely not the case of Alberta where economic boom's been causing the prices of houses go up like never before. It's been growing steadily for past 3 years, but now it's at the pace of $500 a day. That means that any house you could have bought today will cost you $150 000 more next year. And it just keeps growing like that. Sad part is - powerful economy makes way too many people move in, which causes lack of places to stay so rent is astronomically high. Sucks for me who doesn't own a house
Comment
Barefootsies

Choice is an Illusion

Join Date: Feb 2005

Posts: 42635
Share

Post
#17

06-20-2007, 06:04 PM

Originally posted by pornask

This is definitely not the case of Alberta where economic boom's been causing the prices of houses go up like never before. It's been growing steadily for past 3 years, but now it's at the pace of $500 a day. That means that any house you could have bought today will cost you $150 000 more next year. And it just keeps growing like that. Sad part is - powerful economy makes way too many people move in, which causes lack of places to stay so rent is astronomically high. Sucks for me who doesn't own a house

Should You Email Your Members?

Link1 | Link2 | Link3

Enough Said.

"Would you rather live like a king for a year or like a prince forever?"
Comment
LiveDose

Show Yer Tits!

Join Date: Feb 2002

Posts: 25792
Share

Post
#18

06-20-2007, 06:26 PM

There are so many benefits to homeownership.

Scammer Alert: acer19 acer [email protected] [email protected] Money stolen using PayPal
Comment
Snake Doctor

I'm Lenny2 Bitch

Join Date: Mar 2001

Posts: 13449
Share

Post
#19

06-20-2007, 08:34 PM

Originally posted by Barefootsies

True.

However for my market, I have been spending the weekend's cruising neighborhoods, and I see the prices falling like a boulder in some of them. They are roughly $20-30k still over where they should be (except lake front which is still insane but falling) but they are coming down.

By the end of the summer there should be some sweet deals for me to snag up.

Yeah if you know what to look for and are patient you can make a killing.

It's all about the fundamentals. If it's significantly cheaper to rent in your area than it is to buy, then the house prices are too high (or the rents are too low and will be raised soon)

If the average house in your area is 500K and the average family income is 50K, then there's a bubble waiting to pop.
People who understand the fundamentals got out of alot of their real estate holdings during the recent run up, and are waiting like vultures to pounce on the bankrupt speculators once the bubble pops.

Same thing with stock market fundamentals. Some people were smart enough to know that the S&P 500 wasn't going to keep trading at 30 times earnings, and the NASDAQ wasn't going to trade at infinity times earnings, and they got out well before the bottom came out.

Kind of got off track here but bottom line is unless the market you live in is FUBAR at the moment, owning is superior to renting in almost every way.

sig too big
Comment

Previous template Next

Working...