patrick.net

The people having problems with landlords and rental issues like noise and stuff....its not renting that is the issue. It's the property. Bad rental situation isn't any reasonable impetus to buy. Motivation to move? Yes. Buy? No.

You can move to a better rental and not have those issues. For instance, the building I live in has very thick solid walls. Literally the only noise ever comes from the hallway only. I can't hear either of my neighbors. I blast my tv and music and they can't hear me either(I've asked).

I suspect its largely an issue of cheaping out on the rental. I have co-workers who make more than I do, yet live in a cheaper apartment nearby in DTLA. They have smell issues, infestation issues, plumbing issues, etc. It's because they cheaped out. They could afford 2-3x what they are paying in rent...easily into the 2500/mo range at least, which gets pretty nice digs...even too much really unless one person needs 1400 sq ft. But instead they cheaped out cause they don't want to "throw too much money away on rent". And thus they live in crap conditions. And then I supose use it as self rationalization to decide to purchase.

Makes no sense to me.

Shawn says

Katy Perry says

Ego's a Bitch. Debt is slavery!

Debt is temporary, so long as you know how to manage it.

Ego is slavery. Keeping up with the Joneses creates lifetime indebtedness in pursuit of a life style not afforded.

Eh, not so much. I'm pretty sure that the vast majority of mortgages are 30 years, and thats anything but temporary. In a declining market most of these mortgage holders can't sell, hence Katy Perry's comments about debt being slavery.

dodgerfanjohn says

Shawn says

Katy Perry says

Ego's a Bitch. Debt is slavery!

Debt is temporary, so long as you know how to manage it.

Ego is slavery. Keeping up with the Joneses creates lifetime indebtedness in pursuit of a life style not afforded.

Eh, not so much. I'm pretty sure that the vast majority of mortgages are 30 years, and thats anything but temporary. In a declining market most of these mortgage holders can't sell, hence Katy Perry's comments about debt being slavery.

It's temporary in the sense that you get to choose how long you want to commit. Nobody says you have to take a 30 year mortage, you could buy smaller and take 15 years. You can also walk away when ever you want.

If you convince yourself that you have to borrow the maximum to have the biggest house and the nicest car, or that it's imoral to walk away from such contracts when they are no longer favorable, the servitude your indebted to isn't the bank. It's yourself.

Seriously! Why would I get a 100K mortgage if the value goes down to 90K the next year. Positive cash flow on an investment property? Misnomer! Try subtracting the value going down from the positive cash flow and wait don't forget to count what that 10K would turn into in 30 years in any other investments.

bubblesitter says

Why would I get a 100K mortgage if the value goes down to 90K the next year.

Mostly because you don't KNOW that it will go down 10% in the next year.

If that's what you think will happen, then wait a year.

I think I might be motivated to buy by my fear of inflation. I think we may see rates of inflation in the 4-5% range, so borrowing money makes somse sense, all other things being equal.

bubblesitter says

Seriously! Why would I get a 100K mortgage if the value goes down to 90K the next year. Positive cash flow on an investment property? Misnomer! Try subtracting the value going down from the positive cash flow and wait don't forget to count what that 10K would turn into in 30 years in any other investments.

What kind of investments? I understand the reasons why you believe housing will go down further, but wouldn't the same reasons affect the stock market too?

immigrant says

What kind of investments? I understand the reasons why you believe housing will go down further, but wouldn't the same reasons affect the stock market too?

Simply put 3% returns on a 10 year CD and put the CD proceeds at the expiry on the next one and so on up to six times. There are plenty of mutual funds that guarantee 5% returns performance over a 10 year period. You can come up with your own if you think outside of a crappy wooden box!

bubblesitter says

There are plenty of mutual funds that guarantee 5% returns performance over a 10 year period

?

bubblesitter says

Simply put 3% returns on a 10 year CD

http://www.bankaholic.com/last-nationally-available-3-cd-is-gone/

Bellingham Bob says

bubblesitter says

There are plenty of mutual funds that guarantee 5% returns performance over a 10 year period

?

bubblesitter says

Simply put 3% returns on a 10 year CD

http://www.bankaholic.com/last-nationally-available-3-cd-is-gone/

“Nessuna soluzione . . . nessun problema!„

Haha. I guess 10 year is gone.

dodgerfanjohn says

The people having problems with landlords and rental issues like noise and stuff....its not renting that is the issue. It's the property. Bad rental situation isn't any reasonable impetus to buy. Motivation to move? Yes. Buy? No.

Totally, totally agree. As I mentioned before I basically rent exactly what it sounds like the OP wants, and what's more, I'm paying $1,200 for our share. Its a nice neighborhood with good neighbors. Sweet situation in any case.

My reasons

1) Desire to stay in a area/locality with access to good schools ( Yes. you can rent also but you need to be lucky to get a home with good/accommodating landlord )

2) would like little bit of freedom to choose flooring, choose energy efficient appliances, lifestyle

I think y'all really meant to say.

1.Impress my friends and family.
2.Keeps my wife from running off with another loan owner Or keeps my man working and controlled doing fix it stuff for me.
3.My ego thinks I've really made something of myself
4 I like being a debt slave. it makes it easier to set my life's priorities which is to Work.

Katy Perry says

I think y'all really meant to say.

That's a little extreme, Katy. Look, I'm certainly sympathetic to your viewpoint, but it doesn't really help to engage in hyperbole.

In most markets, buying should be cheaper than renting over a reasonable period of time. Renting will often be cheaper than short-term buying (which is why the "starter home" concept is silly in many areas). If you're staying for a long time, it may make sense in most markets to buy.

In addition, engaging in consumption to buy when it's not cheaper than renting can make sense if you understand it's consumption.

What I don't understand are the "freedom" arguments, which are mostly questionable and based largely on personal neuroses.

There is little you can't do as a renter in reality assuming your landlord is not that asshole that you rented from in college -- you can paint, you can have a shop in your garage, you can buy appliances, you can plant stuff in planters, etc. During times in my life I have been a renter, it has been rare (or non-existent) that a landlord has not been accommodating on this stuff.

The so-called "freedom" that some people refer to is often really consumption or compromise. Many hobbyists believe they need some facility at their house, but in most cases, (a) this could be done as a renter, (b) it would be more efficient to do this outside of your home as bmwman does, and (c) assuming you're on a budget, you are generally hyperoptimizing for this one hobby while compromising on some other factor of your house (e.g. I'll accept a less than ideal ___ because I can have my workshop).

Even when I've been an owner, it has made sense not to think of my house as a Swiss army knife that can do everything because of point (c) above. There can be benefits to aggregation, and it can be cheaper to engage in some hobbies outside your house. At the same time, there can be must-haves -- e.g. I need a home office, but those are usually based on job-factors or family-factors, not hobbies.

Ultimately, it depends on the city you live in and a certain number of personal preferences. That's why I don't understand why either side gets so militant -- do you really need to defend your personal preferences so strongly?

DoctorRenter says

My wife and I are getting ready to close on a house purchase in Lamorinda

Really! Are you really purchasing with 100 percent cash? I doubt it.
If not you're buying a loan. I hate how people mess with my grammar.
Remember the bank thinks they own something too. They own the house and they own you (their little worker bee.) At least the Va jay Jay is happy.
My landlady works for me BTW,.. and she knows it. It sucks for her but that's the facts.

Being a loan owner doesn't guarantee you a thing except debt today.
bugs don't care if you rent or own really they don't.

Also A victim mentality doesn't just stop once you borrow for a house. I think it gets worse actually Blame the bank, Blame the Agent, blame the other nieghbors, Blame the builder, blame the PO, Blame the city the state the nation,.................

corntrollio says

Ultimately, it depends on the city you live in and a certain number of personal preferences. That's why I don't understand why either side gets so militant -- do you really need to defend personal preferences so strongly?

You do make a good point. I just call it like I see it. We can all agree that these are nutty times. Things are really out of whack and many of my friends and family have been hurt over the years by all of this.
some still don't really get it (like my parents).

I'll always defend renters and knock down all the lame reasons people need to borrow for a house. I'll always defend a real cash flow purchase though ( and a 100percent cash purchase.) But the ego driven mindless reasons to Borrow vs rent is such BS to me. I find it almost impossible not to comment. I mean this is Patrick.net! Maybe go to this blog if you want more support on borrowing for a house or being a debt slave.
http://piggington.coms/user_forum

edvard2 says

dodgerfanjohn says

The people having problems with landlords and rental issues like noise and stuff....its not renting that is the issue. It's the property. Bad rental situation isn't any reasonable impetus to buy. Motivation to move? Yes. Buy? No.

Totally, totally agree. As I mentioned before I basically rent exactly what it sounds like the OP wants, and what's more, I'm paying $1,200 for our share. Its a nice neighborhood with good neighbors. Sweet situation in any case.

You know what's worse? A bad loan owning situation, or maybe realizing you don't own a thing but debt and liability.

there's nothing wrong with using a mortgage to purchase a home. Especially if you dont feel like tying up all of your cash.

renters who cry foul and say you dont really own anything either sound more like jealously to me.

AM said: With a 10 or 15 yr mortgage, if I have the ability to service the debt in a meaningful fashion - then that debt is productive and helps me get to the future where I don't have to pay rent at all.
The ROI on a paid off home usually isn't that great. That's not to say paying off a mortgage is a bad thing as many folks benefit from a paid off home in retirement. It's a nice fixed return with home equity available in an emergency. But going for a shorter term on the mortgage basically says "I don't have the financial discipline to do anything better with my money than stuff it into the piggy bank which is my home". The truth of the matter is, though, most Americans probably fall in that category where they benefit from the forced savings account aspect of a mortgage.

I never thought I would buy a home. This changed though on 9/8/11 when I closed on a very nice home about 10 miles north of Denver. I moved from San Jose, CA. When I lived in SJ I swore I would NEVER buy, at least not in that area, not in Calibubbleya. I barely make 6 figures so 3x that doesn't back Jack in that area. Renting sucked, I could of/should of moved, but the place I was at was nice and a in a good location downtown. What sucked about it was the constant influx of spoiled college students who didn't give a rats ass about quiet hours. Home from the bar at 2:30am on Wednesday morning, yep, time to crank the jams. Incompetent landlords too. Constantly giving out my parking space to new renters. As I said I could have/should have moved. Why didn't I? Every time I shopped around the rent prices made me sick. Luckily I qualified for a below market rate on my unit, so the cost was low for the area. LOL. Still makes me chuckle to think a six figure income earner was getting subsidized housing, but that's California for ya.

One day I thought "What if I could take my Cali salary out of Cali?" Hmm... I was being groomed for management and my team was being built on the other side of the world (Pune, India). I approached my boss with this and he talked to his boss and the verdict was "Live where you want, your team is remote anyway".

BOOM SHAKA LAKA!

My reasons for wanting to buy are many, mostly inline with what's been post already. It puts a smile on my face watching my little girl play in the backyard. Watching my wife in her kitchen. Hanging in my basement, playing my guitar louder then ever possible in my old apartment. I may be a slave to debt as Ms. Perry says, but I've never been happier. I am fully expecting the value of this place to drop below what I paid. Am I going to cry and stop paying the mortgage, and whine, and then bitch about it? Nope. I'm going to live here for a very long time, pay this place off at least 10 years early (30 year mortgage here) and keep smiling.

If something beyond my control happens and I can't follow through with my plan, then I will take the memories of living here with me wherever I go.

If you rent all your life and then die, what do you have? Do you get a Patrick.net t-shirt for your corpse? LOL.

toothfairy says

sound more like jealously to me.

Well, NOT buying declining value property sounds like financially smart decision to me. Is that all you can come up with?

bubblesitter says

toothfairy says

sound more like jealously to me.

Well, NOT buying declining value property sounds like financially smart decision to me. Is that all you can come up with?

well if you wanted a rising value property you shouldve bought in 2005

toothfairy says

shouldve bought in 2005

You meant before 2000? correct? Care to honestly disclose when you bought?

Edvard2, are you the same person as Bob on burbed.com? Just curious, as Bob has the exact same situation. Lives in the east bay with a housemate, from the southeast, wants to move to Austin or Nashville or someplace like that but still lives here.

Greg1867 says

My reasons for wanting to buy are many, mostly inline with what's been post already. It puts a smile on my face watching my little girl play in the backyard. Watching my wife in her kitchen. Hanging in my basement, playing my guitar louder then ever possible in my old apartment. I may be a slave to debt as Ms. Perry says, but I've never been happier. I am fully expecting the value of this place to drop below what I paid. Am I going to cry and stop paying the mortgage, and whine, and then bitch about it? Nope. I'm going to live here for a very long time, pay this place off at least 10 years early (30 year mortgage here) and keep smiling.
If something beyond my control happens and I can't follow through with my plan, then I will take the memories of living here with me wherever I go.
If you rent all your life and then die, what do you have? Do you get a Patrick.net t-shirt for your corpse? LOL.

#1. You just compared apples to oranges(rental apartment vs. purchase house). If you wish to make compelling arguments, compare like situations. You disingenuously attempt to make the reader of your post believe that renting an apartment is the same price as your mortgages on a house, and thats pure bullshit.

#2. Rental houses have backyards for your kid to play in and kitchens for your wife to cook in, and basements(theres basements in California?) to play guitar in.

#3. What puts a smile on my face is an abundance of 20 year old inexpensive hookers.

Greg1867 says

One day I thought "What if I could take my Cali salary out of Cali?" Hmm... I was being groomed for management and my team was being built on the other side of the world (Pune, India). I approached my boss with this and he talked to his boss and the verdict was "Live where you want, your team is remote anyway".

Truthfully I don't understand why this situation isn't more common these days. I'd say that 95% of the interaction I have with people at my job are with people who don't even live here. I'm on the phone half the day with people from all over the country. If I were offered the chance to "Live where I want", you'd better believe I'd be packing tomorrow. Hell- I'd even take a significant pay cut.

^ you can now buy a house on an acre+ in CO for the cost of an apartment in CA again:

http://www.redfin.com/CO/Larkspur/1976-Kinnikinnik-Dr-80118/home/35255416

Monthly outgo: $1860
Outgo less principal repayment: $1400
Average cost of ownership over 30 years: $1100

The median in this area went from $360k in 2002 to $490k in 2006, now it's back down to $370k.

I think that's a good level to buy at.

Bellingham Bob says

median in this area went from $360k in 2002 to $490k in 2006, now it's back down to $370k.
I think that's a good level to buy at.

How is this a like argument? I can buy a house in Detroit for less than the change I hand a hobo.

So f----- what?

dodgerfanjohn says

How is this a like argument? I can buy a house in Detroit for less than the change I hand a hobo.
So f----- what?

How is that a like sentence? It's a pretty simple argument really--prices are back to non-bubble levels.

What does the price of a house in Detroit have to do with anything?

dodgerfanjohn says

So f----- what?

Waiting for the bottom is a questionable exercise.

The example I gave was a house that sold in 1997 for $335k sold this summer for $425k.

In 1997, rates were 7.5% - 8%, and the conforming limit was $214,000.

Compared to 1997, the 2011 price of this house was a bargain.

The original point was that one can buy some good land now for what it costs to rent in CA.

It's a point well worth taking seriously.

I don't see a bottom forming yet, but I do think if certain things happen in the next year or two we could very well see jaw-dropping inflation across the board later this decade.

Maybe I'm beeing trolled?

Even at the height of bubble mania it was cheaper to mortgage in some parts of the country than pay rent in a CA apartment so in dont get the argument

tatupu70 says

dodgerfanjohn says

How is this a like argument? I can buy a house in Detroit for less than the change I hand a hobo.
So f----- what?

How is that a like sentence? It's a pretty simple argument really--prices are back to non-bubble levels.

What does the price of a house in Detroit have to do with anything?

The comparison as stated was buying a house in Colorado to renting an apartment in CA. Why not Detroit, Killeen TX, or BFE, KS as well?

Prices in metro urban CA, other than very few exceptions(Covina for instance) are still very much in a bubble.

dodgerfanjohn says

Even at the height of bubble mania it was cheaper to mortgage in some parts of the country than pay rent in a CA apartment so in dont get the argument

That may be so, the Front Range area had something of a bubble, 2005-2006.

It came late and wasn't as pronounced, but my friend bought into it (in 2006) right at the top and his place has lost $200,000 or so in the 5 years. Shoulda rented, but he was taking $400,000 of bubble-era equity with him from CA to CO so it's not so bad for him.

The property I listed above with a $1100/mo cost of ownership is 2.3 acres in one of the better areas to live in the Denver/CS area. It is not some random shithole. Not everyone can work remotely, but if you can, getting out of California is a very good idea, quality of life-wise.

Hence my "location". I think I'd be pretty happy up in Bellingham. $425,000 can buy some very nice places up there, too.

http://www.redfin.com/WA/Bellingham/1387-Nigel-Rd-98226/home/15810444

dodgerfanjohn says

Maybe I'm beeing trolled?

If anyone is trolling, it's you. Bob's post wasn't in response to you at all. It was simply an observation mostly agreeing with the post directly before it. That's why he had the carat (arrow pointing up)

bubblesitter says

toothfairy says

shouldve bought in 2005

You meant before 2000? correct? Care to honestly disclose when you bought?

sure but first tell me why you want to know?

toothfairy says

bubblesitter says

toothfairy says

shouldve bought in 2005

You meant before 2000? correct? Care to honestly disclose when you bought?

sure but first tell me why you want to know?

So I can find out how under water your big ticket item is. :)

Bellingham Bob says

Hence my "location". I think I'd be pretty happy up in Bellingham. $425,000 can buy some very nice places up there, too.
http://www.redfin.com/WA/Bellingham/1387-Nigel-Rd-98226/home/15810444

Bob, Is this correct ? Sold for $515K in 1995? considering many home prices today are much less... someone really porked themself badly.

Property History for 1387 Nigel Rd
Date Event Price Appreciation Source
Sep 09, 2011 Price Changed $429,000 -- NWMLS #260253
Aug 08, 2011 Listed (Active) $439,000 -- NWMLS #260253
Jul 25, 1995 Sold (Public Records) $515,000 -- Public Records

bubblesitter says

toothfairy says

bubblesitter says

toothfairy says

shouldve bought in 2005

You meant before 2000? correct? Care to honestly disclose when you bought?

sure but first tell me why you want to know?

So I can find out how under water your big ticket item is. :)

you cant tell that from knowing when I bought. You also need to know the location and how much I put down.

Funny because my boss asked me the other day if I was looking to buy. I've only been at the new job for 5 months and no rush to buy now.