Don't want to downgrade my living situation = loser/racist

[RecoveringKinkoid]

Exactly. If you buy wisely you have nothing to fear. Get a fixed rate. Don't buy more house than you need. Don't let someone sell you more house than you need. Speculate on the neighborhood. Don't buy so close to the projects a crackhead can carry your tv to his place without getting winded. If the market sucks, don't sell until it stops sucking. Improve it as best you can without pricing it out of the neighborhood. Use the equity to pay for home improvements. Overpay on that mortgage when you can so you chip away at the interest faster.

A house and/or land is only going to go up in value. Property may depreciate temporarily, but it won't stay depreciated. It WILL increase in value at some point. You have to be prudent when you buy, and prudent when you sell.

[Boozy]

Market price analysis over the last 50 years has shown that houses do not appreciate at a greater rate than inflation. Anything that does not gain value faster than inflation is not an investment.

[AdminAssistant]

A house and/or land is only going to go up in value.

Especially land. Actually, that was my BIL's plan, and it's worked out well for him. A long time ago, long before he'd met my sister, he bought 8 acres outside the city limits and put a cheap, but nice, trailer on it. The trailer and land were paid for not long after he and my sister got married. Through saving and working overtime*, they were able to build their dream home last year. Oh, and they were just annexed into the city limits. If you live in an area where it's possible to buy land and a 'pre-manufactured home,' it's really a good way to go.

*Both work for electric companies (he's a lineman for the city, she's an accountant for a rural cooperative), and there was a severe icestorm in the area a couple of years ago. He didn't have a day off for a couple of months, and she worked long hours and Saturdays for six months. All the overtime they accumulated made the house happen about a year sooner than they expected.

[Andara Bledin]

Market price analysis over the last 50 years has shown that houses do not appreciate at a greater rate than inflation. Anything that does not gain value faster than inflation is not an investment.

Compared to owning, however, renting is akin to giving money away for not enough benefit to be worth it in the long-term.

^-.-^

[Boozy]

I'll concede that owning a home is the closest many people will ever get to an actual investment, but they really shouldn't be telling themselves they are "investing" when they pay their mortgage.

My husband and I have a large chunk of capital that we are considering using for a downpayment for a home, but no matter how I crunch the numbers, we're better off putting that capital into blue chips. Even if we continue to pay rent elsewhere. I believe that a lot of home buyers do not factor in carrying costs when doing their math - property taxes, maintenance costs, etc.

[telecom_goddess]

Compared to owning, however, renting is akin to giving money away for not enough benefit to be worth it in the long-term.

^-.-^

Like Boozy said, there are still maitenance costs, insurance, and what about repairs? To me it's more beneficial to rent in the long term because I won't ever have to worry about paying the property taxes, or to have to shell out several thousand dollars for a new roof...or thousands to replace wiring/plumbing/carpet/flooring/appliances/etc. That's someone else's problem.

What I wish we had around here is the co op for renters setup. Apparently they have these in Canada, and I haven't heard of it anywhere in the US. But the renters are all part owners, there is no landlord to deal with. But you still rent...not exactly sure how it works though....anyone??

[Boozy]

The property is owned by a corporation set up by the renter's association. No one collects equity when they leave. The equity goes to the corporation, which may choose to pay it out in dividends to individual renters each year, either in a lump sum or in reduced rent the following year.

As you can imagine, no one leaves a renter's co-op if they can help it. But unless everyone gets along at all times, it can also be a horror show of epic proportions.

[telecom_goddess]

The property is owned by a corporation set up by the renter's association. No one collects equity when they leave. The equity goes to the corporation, which may choose to pay it out in dividends to individual renters each year, either in a lump sum or in reduced rent the following year.

As you can imagine, no one leaves a renter's co-op if they can help it. But unless everyone gets along at all times, it can also be a horror show of epic proportions.

I can imagine....but also I understand for someone who wants to rent in one of these co-ops it's not a simple process, and you have to pass approval. I would think that would cut down on possible conflicts.

It sounds like a good setup to me...and I can see why people don't want to leave. It's a little more permanent than renting but not as permanent as ownership.

One more thing....if and when the mortgage gets paid off then what? what if it gets sold?

[Andara Bledin]

I balance the responsibilities against the freedom to do whatever I want to the building. Want an add-on? No problem. Want to install solar panels? I'm good to go (if I rented, the panels would belong to the landlord, who could then raise my rent because the property value went up >_< ). Want to tear down that old chain link fence and put in a decent wood fence in it's place? In it goes.

My last landlord was amazingly cool. He was also impossible to get ahold of. There would be months where he wouldn't cash a single rent check because he was out of the country and didn't have any sort of management firm. If anything had ever gone wrong with the place, we would have been screwed. And he was one of the better ones.

^-.-^

[Boozy]

I balance the responsibilities against the freedom to do whatever I want to the building. Want an add-on? No problem. Want to install solar panels? I'm good to go (if I rented, the panels would belong to the landlord, who could then raise my rent because the property value went up >_< ). Want to tear down that old chain link fence and put in a decent wood fence in it's place? In it goes.

Now those are excellent reasons for buying instead of renting.

Don't get me wrong - I'm a fan of home ownership for most people. I just don't think that home ownership should comprise the bulk of one's retirement fund if one can at all help it.

[Boozy]

One more thing....if and when the mortgage gets paid off then what? what if it gets sold?

I'm fuzzy on those details, having never lived in a co-op myself. I'm just familiar with the general concept.

Keep in mind that the property does not get sold unless the renters decide to do so. The corporation is usually run by a board of directors comprised of the renters themselves.

[RecoveringKinkoid]

Friend of mine bought seven acres on an out of the way cove on a major lake here. Said lake has some of the more valuable properties in the state on it. She didn't even buy lake front, just a wooded lot across the street from lakefront on an undeveloped cove surrounded by bungalows and mobile homes. Her house was a trailer that someone added on to. It's nice than it sounds, but it still is what it is.

She paid very little for it. Bought it probably fifteen, twenty years ago. Maybe less, I don't remember. Her house, being part trailer, has depreciated to the point it's worth less than my used van.

If she sold that property right now, she could buy ME. That land she's sitting on is worth a sick amount of money, because while her house is a piece of shit (house market wise, I mean...it really is a cute house) the cove properties over there are crazy valuable now. Only reason she hasn't sold it is because there is a house up her street she's always wanted, and she's waiting to see if that ever goes up on the market. Otherwise, she loves where she is and has no plans to sell.

Now THAT was a good investiment!

[linguist]

If she sold that property right now, she could buy ME. That land she's sitting on is worth a sick amount of money, because while her house is a piece of shit (house market wise, I mean...it really is a cute house) the cove properties over there are crazy valuable now.

which is an excellent argument for buying a house vs buying a condo. in the event of a catastrophe, say a fire that burns the house to the ground, the property itself still has value. when you buy a condo you own the living space and that's it.

as cliche as it sounds, land is the one thing they aren't making any more of, and values are just going to continue to rise.

[insertNameHere]

There are some people out here who love to buy land, especially by the major state route, because it just a matter of time till they make it 5 lanes from 2 and the more land you hold there, the better off you are.

I get the same shit for living at my parents house and why don't I just move out! I do maintenance around the house to cover the expenses of having me. I don't formally pay them rent yet because my dad wants me to save money so I can eventually by a house. My broke as co-worker told me I need to move out an be independent.... I'm sorry should I really be expected to take over half of what I make an apply it to a shitty apartment, because well the "cheap" apartments are the same as the OP mentioned. My dad is a cop,there are certain places he refuses to let me move into for just reasons. Its not I'm a racist, I know crime rates AND response times. I would much rather live in the country with lower crime, OH and i get to watch their cable, use their internet because otherwise I need to spend $150 more a month on that. While living with my parents sucks, it is bearable till i get a real job

[blas87]

I rent because even though it seems like it's money going nowhere, I don't have to worry about the toilet leaking or my fridge going to hell. I only get charged if I broke it.

There are a lot of negatives to renting, but for the most part, I'll take my plain white walls and boring generic colored carpet for the sake that I don't have to pay a lot of money to rebuild a bathroom or replace a fridge or an oven.