patrick.net

"You could have also had a mortgage for 30 years, still save that same money but instead make extra payments and pay the house off over 5-7 years or whatever shorter time period."

And why would anyone do that knowing that they have to pay for maintenance?

"If you can buy for the same amount than rent, why waste time renting and throwing it out? The argument that interest is like renting is not correct because the interest portion of a mortgage is way less than a rent check. When I compare my mortgage to somebody renting, I am including Interest+ Principal + Prop Tax - Deductions."

You do know that the mortgage deduction is going to go on the chopping block...right?
http://blogs.wsj.com/developments/2011/05/18/whats-the-future-of-the-mortgage-interest-deduction/
There's no logical reason to reward high end housing with a credit. If we are to promote housing it would help to support more affordable rather than high end. We have 19 million empty homes in the country..there's no reason to support new construction.

"And if you are in the line of work where you have to constantly move or relocate than DUH! …buying is not for you. It’s like getting married. If you want to have a different girlfriend every week…don’t get married, obviously. But let’s say you do find somebody that you could envision spending the rest of your life with, then…get married."

Define "constantly". Many employers move it's just a fact of life. The average person has at least six different employers in their life. Higher home ownership leads to higher unemployment because the worker base cannot move.
http://tinyurl.com/66nbdro Let's say you put you money in a mortgage and pay it off. You bought the house after going to school so 30+22 you are 52 years old..now you get laid off..ok now what? Put your house on the market? How fast can that happen? Now with renting you can pack up your stuff and go..you used a service rather than a product..you don't have to worry about reselling the product.

"What so many people here don’t see is that renting is nothing else than a 0% down, lifelong loan with a slowly increasing interest rate and no chance of having any equity ever. The “freedom” argument is a total wank because if you have a family, 2 kids and need to move it
#1 costs a lot of money to move
#2 very stressfull and timeconsuming to pack up a whole house and move"

But people aren't having the same size families as they did before. Cost alot to move? According to whom? Time consuming? Yeah if you have a house..if you have an apartment you don't.

Everything these days has been made smaller and lighter. Have a ton of books? Kindle, big PC? Laptop..tons of music? ipod. huge stereo ? Bose..tons of clothing? Space bag, cable tv? netflix, cable internet? wifi. The idea of having a place to impress others or "entertain" is gone.

To note a fair amount of celebrities live in NYC. Cindy Lauper lives in an apartment...so does Ralph Nader. They do so mostly because of rent controls but they also aren't stupid. Why buy when you can rent? Why be responsible for more things?

You also don't have the liabilities. Let's say it's january and ice has frozen on a walk on your house. You go though the garage..uh oh someone selling some crap slipped on it and is now suing you..or this could be wet leaves in the fall..can't happen when you rent. I had a pool growing up in the suburbs. As nice as it is to say you can have your own swimming we also had to keep our eyes like a hawk on it. Had to lock it up and put up the ladder. OK why? Well pools are more likely to kill than guns. I wouldn't ever want a pool again just due to the liabilities. White flight ended years ago.
http://www.npr.org/blogs/talk/2008/07/the_end_of_white_flight.html
Suburbs are now seen as boring remote areas with no night life, few services and everything being a significant drive away.

"so nobody just moves just like that in reality. And then what, find another rental? For less?"

Well yeah I've seen it done. Starting a bidding war on rents is easier than a house because there's no bank involved in a rent.

corntrollio says

That would be true if you had actually said “almost always,” but as we know, you keep quoting yourself not saying that. Thanks for that, btw!

Seriously? This is getting ridiculous. Again here is the original post:

tatupu70 says

That’s a completely ridiculous statement. Buying at bubble prices never make sense. Otherwise, assuming you won’t be moving any time soon, it almost always makes financial sense to buy. Look at any 15 year period in history and tell me when renting wins.

Now, slowly, read the 3rd sentence. Do you see the "almost always" in there?

corntrollio says

I have shown at least 4 examples that your statement is wrong, some of which were on a nominal basis, which is quite incredible

What the hell are you talking about? You have shown nothing that indicates renting was better than buying over any of those time periods. If I missed it, please paste it again.

corntrollio says

It’s fairly easy to show the return from housing being very very low.

Of course it is. Housing appreciation generally follows wage inflation. Nothing more. I would never say otherwise. How does that in any way contradict my statement?

corntrollio says

However, what I can say is that your statement should be generally true if you replace “always” with “generally” because renting should be the price of owning plus a reasonable profit in the long-run.

Actually you miss the main reason why owning beats renting. Owning(with a mortgage) is a great inflation hedge.

corntrollio says

You did say that buying is “almost always” a better decision than renting, which is also wrong, since renting can be good for various purposes. There are many reasons to rent which I’ve pointed out in other threads. Not everyone is a good candidate for homeownership, and the most recent housing bubble shows that quite well.

And that's why I said that you need to be planning on remaining in the house for a relatively long time. What other reasons did you have?

corntrollio says

This doesn’t contradict what I said. You are talking about a 15 year period. Did you know in 2001 that there would be a housing bubble in 2005? Did you know in 1998? Did you know in 1993? Did you know in 1990? If so, can I have what you’re smoking? It must be good stuff.

Of course it contradicts what you said. Are you purposely playing dumb? Buying BEFORE a bubble is good. Why would you need to know a bubble is coming? The only thing you need to worry about is buying DURING a bubble. When prices are out of whack. Otherwise, you're fine.

SubOink says

And how are you going to achieve that if you don’t have rich parents and are paying rent every month as much as somebody else is paying a mortgage. If you tell me that you will save money while renting to the point where you can buy a house outright in cash than I could say - You could have also had a mortgage for 30 years, still save that same money but instead make extra payments and pay the house off over 5-7 years or whatever shorter time period.

Easy. Combined we make a very generous dual income. We're also the cheapest cheap-skates you'll ever meet, drive 2 crappy old extremely high mileage cars, buy bulk groceries, and get our furniture from the street. We rent a house and share it with 2 other people. Its a big house and we have a lot of space. Our rent is around $1,300 in an area where houses are still sitting around with $500k+ price tags. We save, invest, and spend as little as possible and have been doing this for 10 years. Doesn't take long to save up enough to buy a house that way. In Texas, NC, TN, GA, or most any other state a decent house can be had for $150k. Maybe even less if the economy keeps going down the crapper.

We'll move outta' the Bay Area, buy for cash elsewhere, have plenty in retirement and savings. Sure- all told it would've taken us 15 years to do so. But its worth it. We'll be semi-retired before 40.

edvard2 says

We’re also the cheapest cheap-skates you’ll ever meet, drive 2 crappy old extremely high mileage cars, buy bulk groceries, and get our furniture from the street

Okay, if you like living like a rat and never enjoy life then ok - that is definitely a way to get there. Only problem is, if for some reason you don't make it and crap out earlier...then you lived like a cheap ass and saved and saved for nothing. I had a friend that was like that...died of cancer with 49...had SO much money saved, plans to buy a house in cash, retire early...too bad he never got to enjoy one cent of his money...

Not for me...

edvard2 says

"For example, where I currently live a lot of the work has to be done by a qualified contractor. You also need to get a permit in many cases as well. In many cases even small changes have to get approved. Then there are many areas that have restrictions about what you can do to the outside of your house- even down to what sort of colors you can paint it and where you park your cars. The list goes on and on...”

Just curious, do you live in Irvine, CA? It almost sounds like it!

There are a wide variet of anecdotes here. I guess different strokes for different folks based on those...

SubOink says

. I had a friend that was like that…died of cancer with 49…had SO much money saved, plans to buy a house in cash, retire early…too bad he never got to enjoy one cent of his money…

So you will feel happy if you spend all your money and die at 49?

corntrollio says

“Look at any 15 year period in history and tell me when renting wins.”
Sure. SF or LA purchased in 1988 or 1989. Houston purchased in the 1980s or afterward. Japan.
It’s equally ridiculous to give your absolute, as it is Coogan99’s absolute. Most people’s absolutist statements are ridiculous.
There are many markets right now where buying is cheaper than renting. The Bay Area tends to have the reverse more often.
Buying *should* be cheaper than renting, because of illiquidity, high transaction costs, risk, lack of mobility, etc. Usually when the reverse happens, there’s some sort of distortion or other factor causing it.

Just to clarify (that's all)... buying in Japan after 1988~
(usually a bad idea, especially 1988-2002)

If you bought in/ around Tokyo 1972, you could do very well (still ahead of the game).

xenogear3 says

So you will feel happy if you spend all your money and die at 49?

I definitely wouldn't regret it...

The point is - You gotta live a little. If you wait to enjoy life until you are 60...you may never make it. So here you are living like shit all life...thinking you are so smart, saving money when you could just get a nice house when you are 30...enjoy it, live a little and by 60/50/45(depending on what loan) you still own the house anyways.

SubOink says

I had a friend that was like that…died of cancer with 49…had SO much money saved, plans to buy a house in cash, retire early…too bad he never got to enjoy one cent of his money…

He could have spent the money on the greatest vacation ever before he died.

SubOink says

The point is - You gotta live a little. If you wait to enjoy life until you are 60…you may never make it. So here you are living like shit all life…thinking you are so smart, saving money when you could just get a nice house when you are 30…enjoy it, live a little and by 60/50/45(depending on what loan) you still own the house anyways.

It's a really sad statement about the mentality of this country if people believe the only way to not live "like shit all life" is to be overburdened with debt.

klarek says

It’s a really sad statement about the mentality of this country if people believe the only way to not live “like shit all life” is to be overburdened with debt.

Where do you get "overburdened". edvard wants zero debt. Others are saying some debt is OK. Who is saying take on too much debt?

tatupu70 says

Where do you get “overburdened”. edvard wants zero debt. Others are saying some debt is OK. Who is saying take on too much debt?

And SubOink says anybody without debt lives a shitty life. "Too much debt" is relative, but I'd say that somebody with his kind of attitude will easily get in over their heads.

SubOink says

Okay, if you like living like a rat and never enjoy life then ok - that is definitely a way to get there. Only problem is, if for some reason you don’t make it and crap out earlier…then you lived like a cheap ass and saved and saved for nothing. I had a friend that was like that…died of cancer with 49…had SO much money saved, plans to buy a house in cash, retire early…too bad he never got to enjoy one cent of his money…

Not for me…

Who said I lived like a rat? The furniture I've found in the street are almost entirely antique. I have solid oak, mahogany, and cherry furniture. Most needed refinishing. Most are now worth a lot of money. The two older cars are old, but I know how to work on them and give them a coat of wax every 2 months. They still look like new. I'm sort of proud of them. I enjoy the way we live. Sure- someday we'll buy a house. Knowing that I don't have to worry about how to pay for it is a nice thing.

let me put it this way. When I graduated college I made crap for money for years. Its not a good feeling to be broke or worry about finances. Now that I make a great deal of money I really appreciate it and feel relaxed. Besides- even if we all make it to 90 we're all going to get stuck in a old folks home and basically own nothing.

I agree with edvard2.

We buy no new furniture, because most of them are CRAP slapped with a brand. The furniture pieces I have are all antiques deals that we picked out from a thrift shop or antique shop, made from excellent grade exotic wood that you cannot even find on the market any more, because they are now protected species. Put it this way, I do not consider buying Ethan Allen me-too cheap wood furniture "enjoyment" of life.

There are so many things that can be enjoyed for so little money, and the Americans are being brainwashed into spending money = enjoying life. The so-called upscale American brands are nothing short of slapping a marketing and branding cost on top of cheap materials.

I don't pay for brands, I pay for raw materials. And top grade raw materials, from food to clothing, from furniture to cookware, does not cost that much if you do not fall for the brand. In fact, I was appalled to find out so many mass market "designer brands" like Ralph Lauren use CHEAP materials, like polyester. I got a couple of Ralph Lauren gifts for my kid that are made from half polyester, and I never bother to let my kid wear them.

OO says

We buy no new furniture, because most of them are CRAP slapped with a brand. The furniture pieces I have are all antiques deals that we picked out from a thrift shop or antique shop, made from excellent grade exotic wood that you cannot even find on the market any more, because they are now protected species. Put it this way, I do not consider buying Ethan Allen me-too cheap wood furniture “enjoyment” of life.

Seriously? How did this devolve into buying new furniture vs. buying antique? Or brand names vs. non-brand names?

Nobody is arguing that you need to overspend on crappy furntiture.

Personally, I don't understand the mindset that you need to buy a house with cash or not buy at all, but to each his own.

OO says

There are so many things that can be enjoyed for so little money, and the Americans are being brainwashed into spending money = enjoying life. The so-called upscale American brands are nothing short of slapping a marketing and branding cost on top of cheap materials.

Exactly. 90% of the "nice" furniture out there is made out of fiberboard covered with a plastic or fake wood veneer. As soon as that veneer is scratched or damaged the piece is done. I have one piece that's a huge book case made out of solid mahogany. Beautiful piece. It was covered in a zillion layers of house paint and was in the trash. With all that stripped off its a showpiece. As soon as a new piece of furniture walks out the door today it instantly becomes worthless. My antique furniture has value and could be sold for considerably more. Sort of like an investment except I paid nothing for them.

Same goes for anything else. All of my tools are probably at least 30-40 years old. Same with the household appliances. Even the cheapest brands from 40 years ago are of better quality than the nicest brands today. If I DO buy something new, I will spend the money to get quality and that means usually buying something that is actually made in the USA. Sure- the markup is higher. But in many cases it'll probably outlast anything from the big box stores. I have a pair of American made shoes. I paid $150 for them but 7 years later they're still like new. I have a full set of All-clad pans. Professional grade. Made in the USA. They cost $100 apiece. But I'll never have to buy another set as long as I live. I only buy Mag light flashlights. They're $20-$30 each. But I have one from when I was a teenager that has taken a beating.

tatupu70 says

Personally, I don’t understand the mindset that you need to buy a house with cash or not buy at all, but to each his own.

Yes, to each his/her own. I'm not saying its the absolute right way to do it. Its our way. Most people choose to spend 30 years paying off a mortgage. We're not like most people.

tatupu70 says

Now, slowly, read the 3rd sentence. Do you see the “almost always” in there?

Yeah, still not there. Try again.

tatupu70 says

Actually you miss the main reason why owning beats renting. Owning(with a mortgage) is a great inflation hedge.

Except when it's not, i.e. the examples I pointed out.

tatupu70 says

Of course it contradicts what you said. Are you purposely playing dumb? Buying BEFORE a bubble is good. Why would you need to know a bubble is coming?

I think we've spent enough time on this subject, so this is my last point, but 1982 to 1997 in LA was a great example of why buying before a bubble can be equally terrible. It's incredibly hard to time the market, especially in something as illiquid as property. If you didn't have the fortunate market timing to sell in 1990, you lost a hell of a lot of real money (i.e. inflation-adjusted) if you sold in 1997, per your 15 year horizon. Bubbles tend to overshoot on the recovery, as that bubble likely did.

klarek says

tatupu70 says

Where do you get “overburdened”. edvard wants zero debt. Others are saying some debt is OK. Who is saying take on too much debt?

And SubOink says anybody without debt lives a shitty life. “Too much debt” is relative, but I’d say that somebody with his kind of attitude will easily get in over their heads.

Once again, putting words in my mouth. Where do I say that anybody without debt lives a shitty life?

I was referring to edvard who basically clams down, living as cheaply as possible. Buying used garage sales furniture, don't go out to eat...all for one purpose - to save money to buy a house with cash??

I mean, who is the slave here?

My wife and I work. For the last 8 years as renters we had a simple model...I pay for everything and we bank her income...then we used a good amount of that income to put down on a house and now our situation is...I pay for everything and we bank her income. Same situation. I am still saving just like we saved before but in 15 years I have either paid the house off OR if I stick to the monthly payment I will have a good amount of equity in the house. The big Plus is...I get to enjoy that house RIGHT NOW. In 10 years, I will have upgraded this house where its my dreamhouse. Something you would never be able to do with a rental. If I had buckled down and kept saving...then buy in cash...it would take me 15 years to buy this house. Meanwhile, I gotta keep moving from rental to rental...deal with pesky landlords and waste money on moving. Plus, moving SUCKS. Especially when you are a family and have a house. You accumulate so much stuff its a nightmare to move. We hate it.

So as much as I understand edvards approach, I don't think its a smart way to go especially since you don't know where prices will be in 15 years. Maybe less, maybe a lot less...maybe more, maybe a lot more. You don't know. If prices will be less than today, then you're saving plan works out...if prices are higher, then it doesn't.

It's up to you. By the way, nobody would stop you from living dirt cheap in a house you bought. You could still buy the used furniture, only eat at home and save save save. You could still have roommates and rent some room's of your house out. Nothing would change except, you'd be the landlord, you collect the rent and will one day own the house. You could still save cash and buy a second house with cash.

Don't forget, paying rent is just like a mortgage. As long as you need a roof over your head, you have to pay it. So much for the freedom argument. In theory, you can leave. In reality, you don't.

My take on the whole rent versus buy thing is that its a local issue as well as a timing issue. Where I live now you could buy a decent home for $250,000-$300,000 as recently as in 2003. Now those same houses after the bust are still clinging to a $500k average price. Had I had the good fortune of being born a few years earlier I would probably buy at those prices. But 500k is ridiculous. As I don't see any real catalyst for prices coming down to acceptable levels we rent with the intention of moving somewhere cheaper. Its a sort of widespread problem particularly with the coasts. Most of the country has corrected to acceptable levels. The bubbly coasts are still- well- bubbly. This in turn means that a good chunk of the industrial and economic output of the country resides in bubble areas. For all practical purposes the US is by and large still in a bubble.

Until this disparity between the coasts and the center becomes less dramatic this sort of argument won't have a clear-cut answer because in most cases its wiser to rent on the coasts and much wiser to buy in the center.

SubOink says

My wife and I work. For the last 8 years as renters we had a simple model…I pay for everything and we bank her income…then we used a good amount of that income to put down on a house and now our situation is…I pay for everything and we bank her income. Same situation. I am still saving just like we saved before but in 15 years I have either paid the house off OR if I stick to the monthly payment I will have a good amount of equity in the house. The big Plus is…I get to enjoy that house RIGHT NOW. In 10 years, I will have upgraded this house where its my dreamhouse. Something you would never be able to do with a rental. If I had buckled down and kept saving…then buy in cash…it would take me 15 years to buy this house. Meanwhile, I gotta keep moving from rental to rental…deal with pesky landlords and waste money on moving. Plus, moving SUCKS.

But I fail to see how your example is superior to mine because you're using some generalities to make a point. Not ALL renters have bad experienced with renting. I have been renting the very same house for 8 years. Its a nice house. As I've mentioned before we have far surpassed the average time a family stays in a home in the Bay Area- 5 years. I know this because it seems like half the houses around us are like revolving doors- someone buys it and then they sell it in 2-3 years. One house near us has seriously been put up for sale 3 times so far. So I could just as easily make the same "Moving sucks!" argument in regards to buyers.

And as far as living cheap.... well that doesn't mean we don't live it up either. If you came to my house I would be willing to put money on it that you would be pretty impressed. Its nice. The stuff we have is also nice. In fact many pieces are pretty good conversation pieces. Doesn't matter that it came from the trash. I grew up with parents who sold antiques so I have an eye for desirable pieces and only buy if the price is right or better yet- its free.

lastly, the name of the game is all about the effects of compounded interest and time. We started investing when we were young. The goal is to stuff as much money into investments, 401k's, bonds, mutual funds, and so on as we can while we're young. The more you do that and the sooner you do so the sooner you'll be able to retire. A house is totally unproductive when it comes to investing. Its what a person lives in and the money it might be worth is meaningless since selling it would mean using whatever appreciation it garnered into another house. So we're sort of doing what most people do in reverse: take care of retirement, save up the cash, and THEN buy the house. In the end retirement savings is the only thing that matters.

Anyway, I am by no means saying that your way of doing things is wrong. We have different ideas of how to do things and it sounds like it is working out for you. If so, that's great. We do things differently and have our own plans. I'm happy with how we live. That's really all that matters, right?

SubOink says

If I had buckled down and kept saving…then buy in cash…it would take me 15 years to buy this house.

Come on SubOink, you've been here a while. You do realize that the majority of house haters on this site hate that people buy houses they can barely afford with down payments as low as they can get them. That is the problem.

If you've saved properly for a down payment and buy a house within your comfortable price range, a house is fine. The problem is hardly anyone does this. People want a house, a nice one, and they're willing to stretch their money to the brink to get it.

It is not about buying new vs old, it is about buying value.

I like edvard2, have a full set of All Clad, the real made-in-USA Canonsburg blueblooded metals, not the most recent All Clad made in China. I spent $600 on them almost 20 years ago and they are still going strong. I am actually look for a post-war period used cast iron pot, the best metal there is, not cheap, but I expect it last generations.

What is so great about eating out? I took cooking classes, and I get the best organic stuff out there and cook myself, honestly, my own cooked food tastes far better than lots of restaurants out there, because they skimp on food purveying, and I spare no expenses when it comes down to ingredients, and cost wise I still come out way ahead. For a meal that would cost $100 per head at a nice restaurant, I can do it with only $25, in fact I buy from the same farms that these top restaurants buy from. And you call eating out at Chili's and Cheesecake Factory enjoyment in life??

I don't overpay for cheap shit, and I don't care about quantity or brand name. I only wear cashmere and organic cotton (but have very few pieces of clothing compared to most Americans), and I eat only organic (although we cook our own food most of the times). We enjoy taking a hike in the park, which cost nothing. And when I drive a car, I buy new and drive it to the ground. My monthly expenditure is very low, but my QOL is way higher than most Americans who like to buy junk, eat junk, and live in junk.

corntrollio says

I think we’ve spent enough time on this subject, so this is my last point, but 1982 to 1997 in LA was a great example of why buying before a bubble can be equally terrible. It’s incredibly hard to time the market, especially in something as illiquid as property. If you didn’t have the fortunate market timing to sell in 1990, you lost a hell of a lot of real money (i.e. inflation-adjusted) if you sold in 1997, per your 15 year horizon. Bubbles tend to overshoot on the recovery, as that bubble likely did.

OK--this will be my last post on the subject too then. I don't know why you keep talking about losing real money. The topic is renting vs. buying. If you want to try to show that I'm wrong in any particular case, you need to show that renting would have been cheaper than buying. Showing that the house appreciation doesn't beat the S&P or inflation or money market rates is completely immaterial.

Further, housing was a great inflation hedge. Just because it wasn't perfect doesn't mean it didn't work well. Keep in mind your rent also rose with inflation...

SubOink says

Once again, putting words in my mouth. Where do I say that anybody without debt lives a shitty life?

Here:

SubOink says

You gotta live a little. If you wait to enjoy life until you are 60…you may never make it. So here you are living like shit all life…thinking you are so smart, saving money when you could just get a nice house when you are 30…enjoy it, live a little and by 60/50/45(depending on what loan) you still own the house anyways.

OO says

I don’t overpay for cheap shit, and I don’t care about quantity or brand name. I only wear cashmere and organic cotton (but have very few pieces of clothing compared to most Americans), and I eat only organic (although we cook our own food most of the times). We enjoy taking a hike in the park, which cost nothing. And when I drive a car, I buy new and drive it to the ground. My monthly expenditure is very low, but my QOL is way higher than most Americans who like to buy junk, eat junk, and live in junk.

Wow--you're kind of a snob. Again--who exactly are you arguing with? Did anyone say they enjoy going to Chilis? Did anyone say they prefer to buy cheap Chinese made shit?

You are missing the entire point of this discussion.

tatupu,

who said I don't own a house already? Btw, I OWN a house, I have a mortgage that is smaller than my annual salary, and I can pay it off any time I want. I am only keeping it because someone is lending me money at 3.75% for 10 years and I can repay in worthless USD, so why not?

And I didn't get to where I am financially by overpaying for my house, nor did I get there by "living a little", I have always been extremely discriminatory in where I drop my money.

StoutFiles says

SubOink says

If I had buckled down and kept saving…then buy in cash…it would take me 15 years to buy this house.

Come on SubOink, you’ve been here a while. You do realize that the majority of house haters on this site hate that people buy houses they can barely afford with down payments as low as they can get them. That is the problem.

If you’ve saved properly for a down payment and buy a house within your comfortable price range, a house is fine. The problem is hardly anyone does this. People want a house, a nice one, and they’re willing to stretch their money to the brink to get it.

I thought we were discussing pro's and con''s of (responsible) renting and (responsible) buying.

I am as much of a hater of people buying homes they can't afford as everyone else.

But the headline of this thread said "now maybe a great time to buy" and I believe it is (when you can afford it). I am not saying that real estate may still decline further, I don't know the future as well as many of you that are certain we are heading down to 1990-'s level or some crazy nonsense like that. I personally think, we are going flat (ish) for a while.

edvard2 says

I’m happy with how we live. That’s really all that matters, right?

Yes, that sum's it up!!

OO says

who said I don’t own a house already?

Nobody. Your point is?

OO says

Btw, I OWN a house, I have a mortgage that is smaller than my annual salary, and I can pay it off any time I want. I am only keeping it because someone is lending me money at 3.75% for 10 years and I can repay in worthless USD, so why not?

Well done. I agree--there is no reason to fear debt.

OO says

And I didn’t get to where I am financially by overpaying for my house, nor did I get there by “living a little”, I have always been extremely discriminatory in where I drop my money.

Good for you. Why do you assume others are different?

OO says

I have always been extremely discriminatory in where I drop my money.

So you are a cheapskate?? Haha...just kidding. I just don't like cheapskates...drives me crazy people that flip their coin twice before spending it. Life is too short for that, imho. Is the icecream at baskin robbins overpriced? Could I get 2 ounzes of haagen daaz at the store for it? probably! But when its hot and I want one...I'll get it right there and then because $4.- is worth it to me.
Same with Starbucks...could I make coffee cheaper at home? Absolutely. But do I like getting out of the house, have somebody make me a coffee and enjoy a (overpriced) pastry? Yes. Doesn't matter. I don't look at everything from a "can I get it cheaper" perspective. Drives me nuts. And I even believe that a lot of our countries demise has come from that ridiculous profit driven "can I get it cheaper" mindset. THat is why americans buy cheap chinese shit at wallmart. Europeans are so different in that regard. Look at how houses are built in germany for example. Made to last. Or dishwashers...or cars...because they believe that "spend the extra buck to do it right, even when it eats into your profit a little".What do we do? Put in cheap chinese drywall...because its cheaper and therefore the builder makes more money- AHH...
Why was fast food an american invention?? Cheap Crap. But americans LOVE cheap crap. We complain about it...but then we go to wallmart again. After all...its cheaper there then elsewhere.
Sorry for the tangent. Cheapskates just get under my skin. I have to haggle with that mentality all day when setting up deals. Big Pet Peeve of mine.

tatapu,

there is a reason to fear debt.

The debt that I took on is technically NOT a debt, because I used it as an investment tool and it is actually not a debt if I can pay it off any time.

If I didn't have the ability to pay it off, and counted on my future earnings to pay it off, I would not have taken it on, at least for the time being when depression is knocking on the door.

OO says

The debt that I took on is technically NOT a debt, because I used it as an investment tool and it is actually not a debt if I can pay it off any time.

It's still debt.

Here's the problem. You have to pay for housing. Signing a lease is basically taking on debt. The owner is financing your rent so you can pay him monthly.

It's not worth arguing about anymore, but taking a mortgage or car payment is nothing to fear. Any more than signing a lease is. Debt is a tool and when used correctly is very useful and makes life significantly better.

ch_tah says

Interesting, just like Schlizor, you don’t want to do things because you are in a rental, which leads me to believe you would do it if you owned. Yet, you and he, keep bashing the concept of homeownership pride and the like.

What on earth are you talking about? I never bashed homeownership in any way. I bashed the nonsensical idea that one of the primary 'benefits' to owning a home is picking the wall color you like. Again, that's as ridiculous as saying one of the greatest benefits of having a child is the joy of picking their clothes for them. It may in some tiny way be true that picking your kid's clothing is fun; but that in no way means you should push people to have children just so they get to do it.

Since Klarek and I know each other personally, I'll just go ahead and tell you that there is a certain species of plant that, if he gets it on his skin, may eventually land him in the hospital. I've seen the consequences of him being carless with that allergy, and they aren't pretty. So I can safely say that he would likely avoid that kind of work whether or not he rents or owns, but if he doensn't own the property the chances of him taking that risk are absolutely nil.

Oh, and he's also never been married to a Chinese woman.

I will however bash your concept of homeownership "pride". What does that even mean? You don't own the home anyway until it's unencumbered by any lien. What are you "proud" of, being approved for a loan? Believe me, both he and I could be approved for a loan if we so desired. I believe he's already been pre-approved for some time in anticipation of buying a home (which he does intend to do in the relatively near future) He's just not going to be swayed in his decision making process by nonsense that has no business being considered in a financial transaction such as this. (things like pride, warm & fuzzies, or holier-than-thou sentiments that accompany home "ownership")

ch_tah says

Yes, as long as you ignore the time it takes for you to save the money to buy. You’ve already said you’ve been renting your current place for 8 years. How many more until you buy (in cash of course)?

And YOU are ignoring the fact that the minute he closes that sale, the home is HIS. How many years are YOU spending paying off that mortgage? Probably more than 8. Not to mention you'll pay the bank back about 220% of what you borrowed when the account is settled, if you got a 30 year and see the amortization schedule through to the end of 360 months. He'll pay 100%, and own the home immediately. True ownership of the home, not ownership of a mortgage debt backed by a house.

ch_tah says

By saying it’s a trade-off versus a benefit is now using semantics. Having back to back emergencies as a homeowner means I’ll have to eat the cost. It also means, I don’t have to call my landlord and wait to see if he cares enough to take care of it immediately or not.

Oh, so NOW it's semantics, huh? Again, a benefit is something inherent, something you have to give nothing more to achieve. A benefit to having a record contract is getting free limos, plane, and helicopter rides everywhere you need to go, on the company dime. If the company said, "yeah, you can use the chopper....as long as you gas it up, file the flight plans, provide your own pilot, and return it to where you picked it up fully-fueled and ready for the next guy", I'd be inclined to say that's simply an 'option' I have been given. It's not a benefit if I have to do all the fucking work. It's an OPTION. You can argue homeownership gives you more options in the home improvement department, but also more responsibilites as well. (ie, a trade-off, not a pure benefit)

Would you argue that smoking cigarettes has benefits too? Using your rationale, the fact that they cause innumerable detremental health effects does not deter from the fact that they are still "beneficial" to the user for stress relief. So do you argue smoking has many benefits too? I wouldn't. I'd say there is a trade off. Fuck your lungs and your health, but feel calm and relaxed. Trade-off.

And are you seriously trying to say that not having to wait for a landlord to fix something is equal to having to pay $3,200 for a new hot water heater? Where are you renting? What kind of absentee landlord assholes have you dealt with where you think this is par for the course? (not fixing things) Ever called a landlord and told them, "Hey, the hot water heater is shot. It's leaking and there's about 40 gallons of water all over the basement floor, and it's leaking into the finished part under your carpet?" Ever done that? I have. It took them about 8 minutes to show up at the door. Unless you're renting a hovel where the landlor doesn't give a shit about the unit (or is in foreclosure and isn't paying the mortgage or something), most landlords do care about the property, being the owners and all. And if they really pull some BS like that on me, I'll simply stop paying the rent until they do. They are in breach of the contract, you should have a signed copy of in your files, and you can either take them to court or stop paying. Personally I'd screen my landlords first as I've done everywhere I've rented, and not rent from a piece of shit who'd pull that on me. Of the 4 or 5 places I've ever rented, the only one's who half-assed it were apartment complexes run by companies pushing profits. Every home I've rented from an owner directly has been very well-appointed, well-kept, and any and all of my concerns were dealt with in a timely fashion.

Look, it's obvious that you're an owner and feel personally attacked by people like me and Klarek. I am not saying anyone's stupid for buying, or that I don't want to buy, or that homeownership does not have many intangible benefits (sure I'm going to love working with tools in my garage and landscaping the yard and all that) The whole point was simply to say that the article posted uses logic that is a bit childish and flimsy at best. Just because they wrote a weak article and we're calling them on it, doesn't mean we're anti homeownership. We're simply anti-propoganda, anti-spin, anti-fallacial arguments based on emotion, shame, or fearmongering. We're anti-ignorance, and that article reeks of it. If you thought it was poignant stuff and feel that by calling the article asinine, we're calling you stupid in kind, well, sorry. Get over it.

klarek says

SubOink says

Once again, putting words in my mouth. Where do I say that anybody without debt lives a shitty life?

Here:

SubOink says

You gotta live a little. If you wait to enjoy life until you are 60…you may never make it. So here you are living like shit all life…thinking you are so smart, saving money when you could just get a nice house when you are 30…enjoy it, live a little and by 60/50/45(depending on what loan) you still own the house anyways.

Huh?? I must be speaking a different language of some sorts...

Schizlor says

I am not saying anyone’s stupid for buying, or that I don’t want to buy, or that homeownership does not have many intangible benefits (sure I’m going to love working with tools in my garage and landscaping the yard and all that)

Just so it is preserved.

Schizlor--

I agree with much of what you say, but please stop this nonsense:

Schizlor says

You don’t own the home anyway until it’s unencumbered by any lien.

Here is a whole other approach:

Imagine you won the lottery, 40Mill. Are you going to keep renting or would you buy a house?

Klarek and Schizlor - what's your answer?

Many communities and homeowner associations put up restrictions on what you can and cannot do do with your won home. So it may not be true, you can do what ever you want to your home.

And time to time we hear about this.

Colorado homeowner’s association wants American flag removed.

http://www.ldjackson.net/news-politics/colorado-homeowners-association-wants-american-flag-removed/

Eminence Police cite residents for tall grass

http://www.whas11.com/news/crimetracker/Eminence-Police-cite-residents-for-tall-grass-95553094.html

Residents of Eminence are claiming that unfair fines are being levied for grass that is too long.

Homeowner cited for backyard habitat

http:/s2.gardenweb.coms/load/wtrsow/msg071445375772.html

Vicki Wozniak's garden in this town is designed to attract butterflies, hummingbirds and other winged critters. It is one-eighth of an acre almost totally covered by sunflowers, honeysuckle, azaleas and many other plantings.

But to local officials, her friendliness to wildlife looks like a nuisance. They've accused her of failing to maintain her property, a charge she is contesting.

The first guilty violation is $100. If you get five there could be jail time included.

“homeownership pride”

Who knows, maybe by the year 2020 or 2025 if your home isnt "Green Friendly" enough by someones standards, you may be fined by the city/county.

Too rainy to mow the lawn? Syracuse homeowners could be cited

SYRACUSE -- For many gardeners, the spring rains have been a little too much of a good thing. Even on a rainy days, Shelley Griffith tends her flowers and keeps the yard neat, but she's frustrated that not everyone in her neighborhood does.

"I come from the North Country. I see pasture fields and meadows and my neighbor has a meadow," said Griffith.

Syracuse code enforcement has been cutting some slack when it came to citing unmowed lawns, but as some lawns go to seed that courtesy is ending.

"We kind of gave people a break with the rain. We'll get out there - we'll probably cite anywhere from five to six hundred in a week," said Syracuse Code Enforcement Director Mike Bova.

If your lawn is cited, the city gives the homeowner five days to get it cleaned up. If they don't, the citation goes to the law department. The law department then typically works with homeowners to make sure the lawn is being mowed. If a solution can not be worked out, a charge for a city lawn mowing crew can be added to your taxes. Codes Enforcement Director Mike Bova says it is extremely rare for the city to mow the lawn of an occupied home and that usually the issues are worked out.