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Is owning a home a bad investment for most?
You do not have permission to vote on this poll. |
| Yes. |
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40 |
33.06% |
| No. |
   |
66 |
54.55% |
| I don't know. |
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11 |
9.09% |
| I don't care. |
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4 |
3.31% |
| Total: |
121 votes |
100% |
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Trader666
Registered: Sep 2004
Posts: 8151 |
08-27-10 03:48 AM
I don't pay the landlord, YOU do, sucker.
Quote from Bolts:
So paying the landlord makes you feel like a sucker? You see how that is psychological and emotional rather than rational?
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volente_00
Registered: Nov 2002
Posts: 13756 |
08-27-10 03:50 AM
The best thing about home ownership is it forces the owner to build/save equity that can be used later. If you take a 30 year loan on a $150,000 house and pay all 360 payments you will have paid around $289,000 for it and that does not even include insurance, property taxes, and any repairs over 30 years.
Assume $3000 x 30 years for property tax $90,000
$1000 x 30 for insurance $30,000
1000 x 30 for maintenance/ repairs $30,000
In 30 years you will have paid $439,000 total cost for that home.
Assuming 3% appreciation and you might be able to get $285,000 back out of it.
The same home would rent for roughly $1300 in my area.
So after 30 year of renting with no increase would have cost you $468,000 to live there but at the end of 30 years you have zero equity instead of $285,000.
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Bob111
Registered: May 2002
Posts: 6474 |
08-27-10 03:51 AM
Quote from volente_00:
What state are you in ?
In Texas the going rental rate is ~1% of the home's value.
I am not sure about 1 million dollar homes but 1% is pretty close ranging from $50,000 townhomes to $500,000 homes around the Houston area.
that would be 12% return for a year if you paid cash for 50000 house and renting it for 6K a year? hard to believe..i'm in PA..here you can have about 7-8% before any maintenance expenses(and taxes,condo fees, whatever)..so after it would be probably around 5% a year...with possibility that the house will loose the value in the future..i would skip that kind of investment..
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volente_00
Registered: Nov 2002
Posts: 13756 |
08-27-10 03:56 AM
Quote from Bob111:
that would be 12% return for a year if you paid cash for 50000 house and renting it for 6K a year? hard to believe..i'm in PA..here you can have about 7-8% before any maintenance expenses(and taxes,condo fees, whatever)..so after it would be probably around 5% a year...with possibility that the house will loose the value in the future..i would skip that kind of investment..
Recheck your math.
A $50,000 house here will went for about 1% of it's value so $425-500 per month.
So figure $6,000 for rental income
Now subtract $1000 that you paid in property tax.
Now subtract another $800.00 that you paid for property insurance.
Now subtract another $1000 that you paid for repairs/ maintenance.
Now subtract the 1% fee that is charged to manage it.
So your net return assuming full rental is $2700 on a $50,000 investment.
Far from 12%
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Bolts
Registered: May 2003
Posts: 241 |
08-27-10 04:00 AM
Quote from Trader666:
I don't pay the landlord, YOU do, sucker.
Doesn't matter. The point is that owning makes you FEEL superior to someone who rents. It's a pride thing. You're living "the American dream". Good for you. 
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Trader666
Registered: Sep 2004
Posts: 8151 |
08-27-10 04:04 AM
With a 15 year 4% mortgage and 20% down, you'd pay $888/month before property tax, insurance and maintenance for about $159,800 in payments.
Quote from volente_00:
The best thing about home ownership is it forces the owner to build/save equity that can be used later. If you take a 30 year loan on a $150,000 house and pay all 360 payments you will have paid around $289,000 for it and that does not even include insurance, property taxes, and any repairs over 30 years.
Assume $3000 x 30 years for property tax $90,000
$1000 x 30 for insurance $30,000
1000 x 30 for maintenance/ repairs $30,000
In 30 years you will have paid $439,000 total cost for that home.
Assuming 3% appreciation and you might be able to get $285,000 back out of it.
The same home would rent for roughly $1300 in my area.
So after 30 year of renting with no increase would have cost you $468,000 to live there but at the end of 30 years you have zero equity instead of $285,000.
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