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I sold in 06 and I'm ready to buy back in this year (or next....depends if I can find a deal)
I need a house since I need a garage to store all the awsome toys I am collecting as a direct result of all this cash I have due to selling at the peak.
Seriously now is a great time to buy anything that was typically paid for with HELOC money by loan owners who now need cash (they all do! lol). RV, Harley,German Cars,Boat, High End Furniture. Anything that cannot be moved into a small apartment can be had for very cheap now used.
Its really a great deal for them, they might have paid 120k for a new 2005 mercedes (actually they paid zero its heloc money and these people are defaulting on everything). So now they can get say 20-30k for that mercedes and its WIN-WIN for them and the new buyer of the car! They get 30k cash after driving a sweet ride for free for 5 years, I get a good deal on a bubble mobile. Thats better than cash for clunkers as no innocent cars are destroyed. Its basically as if they stole the car but they didn't....its completely legal! What a great country! Happy Sunshine Capitalism Time!
Everyone's situation is going to be different. Some people live in crappy houses. Some people rent really nice houses. And vice-versa. You mention having a place of your own to have people over for BBQ- to "Show off" and so forth. This week my parents are coming over. We're having a backyard BBQ this weekend, we're going to have home-grown tomatoes, strawberrys, peas, and fruit from the various fruit trees. They get to sleep in our spare bedroom. This is a 4 bedroom house that we rent.
Truth be known its a nicer house than any of the houses my friends who bought own. In our area what we could buy would actually mean a downgrade because our house would probably go for 700k. We could probably afford 500k- I say "afford" because to me anything over 350k-400k is ridiculous and I don't want to pay that amount.
We've lived in this house for 8 years. The rent has never been raised. I know all the neighbors. Like yourself- I collect mid-century furniture ( Except almost all of mine was founf in the trash for free) I also collect various other things. I used to concern myself about the hassles of moving it. There's such a thing as storage you know.
We have painted rooms to our taste, landscaped the yard, some projects here and there. Either the materials to do so were free or the landlord paid for them. In other words- I get a nice house the way I want it and it didn't cost anything except my time. 8 years of living in a large house, furnished with things I like, with a nice, big backyard to "Show off". Oh- and the rent is $1,300, or about 1/3rd the cost of buying the same house.
So does it bother me that we rent? nahhh... seems to be working out for us. Do we want to own? Sure. But not because we want to paint and knock down "Our own" walls. Its more that someday we'll retire somewhere else- preferably early- and buy a house to live in with zero debt.
In the meantime we've saved enough cash to buy a house lock-stock-and barrel almost anywhere in the country minus the overpriced coasts. If we bought in the Bay Area we could easily put down at least 60%, which I wouldn't because again- the prices are ridiculous.
Can we remodel the kitchen to our taste? Can we have a pet? Can I have my own band room like I always want? I love vintage mid century furniture, should I buy them now or wait until we have a house ‘cos the furnitures made not fit the new house? Can I build a dream backyard to really enjoy it or do I just bring my kid to a public park and call it a day? Can I get a new fridge now or stay with the old, inefficient one? People said you can rent a good house in a nice neighborhood.
I have both rented and owned at various points, and it made sense at various points to do one or the other. Certainly there were times where I could have afforded to buy, but rented instead, so let's get rid of that canard right now. We could take these rationalizations one by one:
1) There's no evidence I would customize my kitchen if I bought a house without seeing that house first.
2) I have had pets in rentals -- plural for both pets and rentals.
3) I don't know what a band room is, but I don't see why not.
4) What stops you from buying furniture? If you're like many people during the boom, paying big bucks for a non-ideal house, you could easily have the same problem with a house you bought, and then you're stuck because you own it.
5) I don't know what a dream backyard is, and although I haven't personally done it, I have friends who rent who have improved the backyard and made arrangements with the landlord to apportion the payments appropriately.
6) The fridge? You're talking about making a multi-hundred thousand dollar purchase (in my area, half-million minimum) based on a fridge you could buy for $300? I question your judgment if that's the case. For one place I rented, I did buy a fridge, and then sold it to the next tenant (no need for me to cart it around). In another, I actually bought new water-efficient laundry machines because the landlord didn't provide them, and that turned out to be a great decision. There's no reason you couldn't move the fridge to the garage and buy your own.
7) I've lived in perfectly nice rentals. Some of them were nicer than places that were bought, at least to start off (pre-remodeling).
Look, these are all factors to consider, but let's not pretend that these are the factors that should apply to everyone. There are financial factors, mobility factors, job factors, personal preferences, etc.
Get a copy of Skrunk and White while you’re at it.
Clambo, you made a good point about the subway, but if you're going to be snarky, it's STRUNK and White.
@edward2: I am happy for you. Looks like you get a great deal $1300 for a nice big house in a great neighborhood. Great!! :-)
Seriously?
A faked foreign written accent, braggado unlimited, near absurd positions and statements,
and Im the only one that understands that masayako is a troll?
what part of yourself is the same no matter if you rent, borrow, or really own?
what part of you is the same whether you are single, married or divorced.
what part of you is the same when you had no kids and what part is the same, now that you do?
the real part of you, that does not change with this temporary category or role, is your true self. This part ( the real you) can truly be happy no matter what.
many of us do not really know ourselves. to truly be happy, one must find this person.
it has nothing to do with things, having or not having them, roles or other ego driven perceptions of self.
so ask yourself. "who am I, what makes me happy?"
hint it's not a thing or object is it?
Great Post Masayako - I couldn't agree more. Well said. Of course, the haters here will crucify you for it...
This message board is fun. The trolls make it more fun.
Real Estate is a spectator sport in CA (similar possibly to watching christians getting massacred by lions in ancient Roman colliseum) and this board is how we communicate our pleasure or displeasure to the emperor or each other.
be happy where you are is what I got out of the original post.
debt slavery is not my version of happiness at this time.
Seriously?
A faked foreign written accent, braggado unlimited, near absurd positions and statements,
and Im the only one that understands that masayako is a troll?
Troll.
Exactly. Ironic that a self-professed student of human behavior can't recognize his own motivations.
Great Post Masayako - I couldn’t agree more. Well said. Of course, the haters here will crucify you for it…
Homeowner circle-jerk begins.
Edvard,
If you are renting a nice 4 bedroom home with a big backyard in a good neighborhood where equivalent homes are going for $700k... Then your landlord is a very benevolent man, your father or a moron!
When i moved to los angeles in 2002... My first 550 sq ft 1 bedroom apt rental in Burbank was $1100 a month. The fact that you found a $700k 4 bedroom home at around the same time to rent without a single rent increase even during the bubble years... Well you basically won the lottery... 99% of the population couldnt get the sweetheart deal you got, its a fairy tale for the majority of renters.
this sounds like a fallacy, a fallacy of false dichotomy.
There are more than 2 choices here. People have their options, housing preferences don't make everyone happy or sad. Some of us might not care much about these issues, and we are capable of being more than just happy or sad like some bipolar chick.
Happiness to me is being free, not being tied down to debt, mortgage, place or a job. We live very comfortably, and somehow do not seem to care for NAR propaganda about how our happiness must be attached to certain commercial goods or huge debt.
housing preferences don’t make everyone happy or sad.
That's cultural. In USA happiness and sadness is tied to home, in the psyche on common mass.
Happiness is a state of mind and can not be qualified or quantified by mere possessions.
I own my home but to explain why would be an exercise in futility.
Does owning my home make me happy? Let’s just say that my dog greeting me when I come home makes me happy; it’s only for a moment but one that is frequently reborn.
I can’t say that about my house.
If you're happy and you know it...clap your hands!
Happy 4th of July everybody!!
@masayako
Great post. I too rented for about 3 years in a "nice neighborhood with good schools" (or something like that). We REALLY liked the area and the rental but we never knew if we might have to move out (we had a year to year). We also had a very basic kitchen, basic bathrooms, etc.
We bought an REO two months ago and pay about $200 more a month than our rent in the SAME neighborhood.
There are two sides to the "residential fence". There's the Bears on Patrick.net and the Realtor Bulls. I'd say both our wrong. Take Patrick's rental calculator for example. 0% rental inflation? About a half percent deflation on a home forever?
Do people really think that 20 years from now homes will be worth less than they are today? Our economy is hinged on inflation!!
I really don't care if the our home decreases because it's IT'S A PLACE TO LIVE FIRST and an investment second.
Do people really think that 20 years from now homes will be worth less than they are today? Our economy is hinged on inflation!!
it's not 100% chance of inflation. 0% chance of deflation. the odds are somewhere in between.
historically, houses roughly track inflation.
there are in fact 20 years period where housing markets have deflated; just not in the united states. don't be one of those people that say it can't happen because it's never happened before (eg prices --never-- fall in the US). those people are short sighted.
so yes, there's a greater than 0% chance houses will be worth less (after adjusting for inflation) in 20 years.
@Hysteresis
You are correct, anything is possible. I'm hoping that "somewhere in the middle" means there will be SOME inflation in the next 20 years. And I'm not necessarily talking housing inflation.
Right now houses are essentially worth what there were 11 years ago but I would bet that things will change in the next 9 years.
Maybe not, but at least I'll be almost paid off with my mortgage.
:o)
Hi kronicade,
I am happy for you. You are making a right decision for you and your family. A home is more than just 4 walls and a roof. It's a place you build memories with. As long as price is make sense compare to rent, you should be fine. Will the price drop more? Maybe, maybe not. It becomes less important compare to other priorities in life. Also, if the price is dropped low enough, I will buy another property for investment purpose.
decreases
@masayako
Great post. I too rented for about 3 years in a “nice neighborhood with good schools†(or something like that). We REALLY liked the area and the rental but we never knew if we might have to move out (we had a year to year). We also had a very basic kitchen, basic bathrooms, etc.
We bought an REO two months ago and pay about $200 more a month than our rent in the SAME neighborhood.
There are two sides to the “residential fenceâ€. There’s the Bears on Patrick.net and the Realtor Bulls. I’d say both our wrong. Take Patrick’s rental calculator for example. 0% rental inflation? About a half percent deflation on a home forever?
Do people really think that 20 years from now homes will be worth less than they are today? Our economy is hinged on inflation!!
I really don’t care if the our home decreases because it’s IT’S A PLACE TO LIVE FIRST and an investment second.
Hi kronicade,
I am happy for you. You are making a right decision for you and your family. A home is more than just 4 walls and a roof. It’s a place you build memories with. As long as price is make sense compare to rent, you should be fine. Will the price drop more? Maybe, maybe not. It becomes less important compare to other priorities in life. Also, if the price is dropped low enough, I will buy another property for investment purpose.
I say with utter certainty that I believe Kronicade now feels entirely validated since he has a stamp of approval from an anonymous internet poster. Good job!
A home is more than just 4 walls and a roof. It’s a place you build memories with.
Are all japanese this bipolar and emotional or just you? House and home are two different things. If you are incapable of building memories while saving for the future than you really have to figure it out man.
I totally agree with Post .......I have been a sad renter from ever but after buying my first one , I'm really enjoying it. No words can express it.
"House and home are two different things"
I wish more people would understand that. Of course memories can be in a building but it is the people that create those memories not the building itself.
“House and home are two different thingsâ€
I wish more people would understand that. Of course memories can be in a building but it is the people that create those memories not the building itself.
Nobody argues that. But how may people do you know rent the same house for 10 years? I always wanted to but there was always something that came up. Landlord needed to sell, Landlord was a dick so we moved, landlord wanted to raise rent, etc...
So the memories you built in your own home are very different because one day your kids are old and inherit the house they grew up in. Quite different than looking back at the 15 rental houses you jumped around in, don't you think?
From my own experience, owning a home is a good thing as long as the price is right. Like Patrick said, it is a terrible time to buy an "expensive" house. He didn't say it's a bad idea to buy any house.
There are many negative feelings toward those who prefer to own even when our own numbers make sense. I think some people feel like this because the price in Bay Area is so high, houses are really unobtainable or "no longer make sense" to buy. They are angry or even despair deep down inside. The irony is: they really want to own one day, just not at this crazy price. There are many affordable houses outside Bay Area if you or your family are willing to relocate. Demand and supply. There are too many rich people in Silicon Valley, the competition is high. In order to maximize the items you can buy with the money you have, moving is not necessary a bad thing. I did.
I used to live in San Mateo. Price was way too high. Can I afford a house? Yes. Do I want to pay $750,000 for a 1600 sqfts house in an 'okay' neighborhood? Not really. I could rent or relocate. What did I do? I left. I am so happy I did. Life is too short to wait for the big drop. It may never come and we are certainly not getting younger. Life is now and I didn't want to postpone my happiness. Can't wait; don't want to wait. US of A is a big place and there are so many nice place and good scenery outside the bay area. I was so narrow minded when I was only thinking about the space between 101 and 280. There are bigger, better places out there to explore.
In Bay Area, I spent 10-12 hours working each day in a boring cubicle in a big hi tech company. Now, I worked 8 hrs and go biking for 2 everyday. We made a little less, just a little, but our quality of life has improved greatly. Not trying to tell everyone to buy, obsviouly. Why would I? I am trying to tell others to look outside the box, find your happiness, right the path for you and your family. At the same time, be nice and help one another. Life is also too short to live with people you hate. Surround with people you love and love them back, life will be so much better. :o). Enjoy your long weekend.
“House and home are two different thingsâ€
I wish more people would understand that. Of course memories can be in a building but it is the people that create those memories not the building itself.Nobody argues that. But how may people do you know rent the same house for 10 years? I always wanted to but there was always something that came up. Landlord needed to sell, Landlord was a dick so we moved, landlord wanted to raise rent, etc…
So the memories you built in your own home are very different because one day your kids are old and inherit the house they grew up in. Quite different than looking back at the 15 rental houses you jumped around in, don’t you think?
owning a home is a good thing as long as the price is right
Agreed, as long as value of that home is not plummeting,otherwise bank is milking on the home owner.
I totally agree with Post …….I have been a sad renter from ever but after buying my first one , I’m really enjoying it. No words can express it.
it's called attachment to an idea. IMHO
just don't let the banksters or anyone else mess with your grammar please. like,......renter , borrower or renting to own,.... VS , A Real Owner or,....I'm a Renter, or I'm a borrower of money and I will hopefully own later, or I really just bought this place , I'm a 100 percent owner. or I'm a half borrower with my partner.
which one is it really???
How many here are Real Owners? you hold a note and owe no one, or no company money for the right to call yourself an Owner.
Or do you prefer to mess with my English language to satisfy your ego.
I know I'm a renter. do you know what you are? hopefully not a debt slave?
no one says "when I grow up I want to be a debt slave."
WOW now that I think about it,... I've never heard anyone say
"I just want to be free" either,...hmmmm
Hey folks "I JUST WANT TO BE FREE!!!!"
- For the 1st house, I have a 30 years fixed mortgage at 4.5%. Paying it quite comfortably, because it's cheaper than rent for the same house). I prefer a mortgage instead paying more because I believe I can get better return than 4.5% with the cash on hands. I want a house of my own, though, that's a luxury item for my family to enjoy, not a necessity, of course. Nothing is necessity except food, water & medicines.
- For the 2nd house, it's my investment property. All paid. Collecting rents at 14% RoI annually
To me, at least, own a small debt in order to grow wealth is perfectly okay. As long as you don't own too much and has the ability to pay back, you are borrowing others money to make your own.
For mortgage, at 4-4.5%, it's a good way to build wealth especially when U.S. government is giving so much perks for investors (capital gains 15% for 1+ year holding period) and homeowners (mortgage interest is tax deductible + no tax $250k for single, $500k for couples on primary residence). I made my 1st bucket of cash from these government rules. If one can't fight it, join it. I did that in 2001/2002 timeframe.
The government is obviously rewarding homeowners and investors & certain purchasing behavior. Afterall, this is a capitalist country. As long as one don't get over their heads and borrow more than he/she can afford, we can use money to make more money. Housing market is here to stay. It's on the downward trend now, yes. So many people get hurt by it, but I know so many friends of mine made money from it also.
no one says “when I grow up I want to be a debt slave.â€
WOW now that I think about it,… I’ve never heard anyone say
“I just want to be free†either,…hmmmm
Hey folks “I JUST WANT TO BE FREE!!!!â€
Renting is better now as the job market is not stable and job security is pretty much a thing of the past. Longest job was 3 years at large company and then layoff. Stayed at another company 2 years then moved to better job then layed off again. My rent in Mountain View is $1600 a month compared to $4000 that would be for a condo mortgage. So far cheaper to rent. I would rather have the extra 2-4k in cash each month. Plus I do not know how long I will stay in bay area.
Sounds like a great plan. Good job, SJ.
SJ says
Renting is better now as the job market is not stable and job security is pretty much a thing of the past. Longest job was 3 years at large company and then layoff. Stayed at another company 2 years then moved to better job then layed off again. My rent in Mountain View is $1600 a month compared to $4000 that would be for a condo mortgage. So far cheaper to rent. I would rather have the extra 2-4k in cash each month. Plus I do not know how long I will stay in bay area.
I bought the 1st one in Dec 2010
Oh you poor thing
Can I get a new fridge now or stay with the old, inefficient one?
Easy Jim, be careful what you wish for.
I bought a new nifty side by side 30cf fridge and had to demo and remodel my whole kitchen. There's a good damn reason the cabinets are right next to the Refrigerators at home despot.
That $1600 dollar refrigerator ended up costing me about 8K. And three weeks of a house in disarray and stress.
Had I known that refrigerator dimensions have intentionally been altered to make existing cabinetry obsolete, I would have waited to buy the fridge for when was motivated to remodel instead of "OH Crap Now I have to remodel".
As you can guess I waited more than 10 to buy a house from when I actually decided I wanted a house. I sat out the bubble with a genuine disgust for the whole episode. The banks, realtors, or speculators were not getting one thin dime from me.
Sure it was long resentful pissed off wait. But you know what?
FWIW I've got a house with plenty of room, 10,000 sqft lot, 2400sqt house, with an in laws quarters, that I am currently using as my music studio and work office space. But when or if I buy another this place will serve as two income rental places.
And when I think about the alternative to what could have been, Spending 250-300K on 800 sqft because I was afraid of being priced out for ever, vs what I actually ended up with, which is exactly what I said I wanted all along.
I can't stop grinning with satisfaction. Sure it was a miserable 10 year wait, but buying in those conditions was not a suitable alternative. 300K at 6% + interest, or 2500 to 3500 monthly morgage nut for thirty years.
Shiiiiiiiiiiiiiiiiiiiiiiiiiiiiit I got off easy.
I was thinking about this old thread today in my current rental.
Before I rented out my last house, we built a beautiful baby's nursery that was featured by some major magazines and D*sney. I spend days painting and designing the nursery and I won't be shy to say it was stunning. My son is now old enough where he wants his room to be very unique and we've been looking at this nautical custom sailboat room. It will require new floors, new windows (think submarine windows) and a sailboat (bed) installed. No way will a landlord let us do this.
We've also been looking at houses in the past 6 months to buy and one of the thing I also want is a work shed and a paved side garage so I can work on some classic cars. I want to convert an old Porsche 356 into an electric car and repaint a 70's Bronco 4x4. Again, things you can't do if you are a renter. I can rent a paint booth and a garage but that is going to cost $1400 a month as another rental. I also have a boat and an exotic car that I can't store at my current rental so they stay at my parents.
Some buyers like that granite kitchen counter or 50K landscape backyard. I just want a man-cave to call my own. A custom garage with a lift and a paint booth. I've seen my peers invest 100K on their garages. I don't plan on doing that for any rental. So I guess in my circumstances, I'm an unhappy renter looking for a place to call home so I can do all the stuff I want to do.
I've seen my peers invest 100K on their garages. I don't plan on doing that for any rental.
Yes, and I don't even plan that for any house I own! If you'd like to engage in more consumption by engaging in some consumption, that's fine. I'm not sure what this has to do with anything, other than you like to spend money on material things and then use that desire to justify your decision. There is nothing wrong with that, but different strokes for different folks.
My personal answer to all of this random consumption you wrote about was "who gives a shit?" I don't want to paint my car in my house -- if I had a 70s Bronco, I could get a guy to do an awesome paint job, and then save the extra thousands of dollars I would need to buy good equipment to do that with on other things that I care about. And I'd avoid the fumes, and the hassle, and the mess that would fuck up my house. Meanwhile, it's just another day at the paint shop, which is much better at aggregating costs than I am, since I only paint a car every few years.
So the memories you built in your own home are very different because one day your kids are old and inherit the house they grew up in. Quite different than looking back at the 15 rental houses you jumped around in, don't you think?
All this nonsense about house vs. home and leaving the house to your kids. That sort of conceptualization doesn't really work for me, and I'm not a "bitter renter" -- I've owned and rented at various times and even rented when I could afford to buy, so let's get rid of those canards. For one thing, have you ever cleaned out grandma's house? There's all this crap you can't believe was accumulated that you mostly throw away because it's not useful to anyone else. You can keep the items that are meaningful, but the house is a dilapidated hovel with "deferred maintenance" that it's a hassle to get rid of. Why would I want to inherit the house I grew up in when my parents spent years and years complaining about how it was too small and how they wanted to move to a bigger place in a nicer neighborhood (which they did, oddly enough, after I moved out, not that we ever lived in a bad neighborhood -- just "movin' on up...").
At the end of the day, you have yourself, your thoughts, and your toys. Toys are easily exportable from house to house, but if you engage in overconsumption of any one thing, whether it's a house, or a Bronco or anything else, it can compromise yourself or your thoughts. The building those things are done in doesn't even enter into the equation for me. In fact, if I overspend on the building, it might keep me from having memories because I couldn't afford a vacation or other activity that I wanted to do. People move for all kinds of reasons -- does that mean their memories are magically extinguished? No, it means that they had a job situation change, a financial situation change, a personal situation change, or a personal preference change.
If people could just admit they have different goals in life from other people and different preferences without making all kinds of judgments, we wouldn't see this need to justify one's life in these threads. I don't need to justify mine to you.
Your observations are flawed controllio.
Your body-shop advice is misguided. I'm talking about a hobby, a passion. I know people who build their retirement boats in their garage.
Some are restoring their 1/4 million dollar ferrari.
In my example, I'm going to have some classic cars (for my hobby) in which I will be restoring.
It won't happen 1-2 days at a body shop. I may take years for a ground up restoration; stripping it down to the frame.
I may wake up in the middle of the night when I have an idea or motivation to do some welding and fabrication.
I'll be teaching my son how to rebuild an engine. The engine block may be left in the open in my workshop all summer and I'll work on it here and there every other Sunday morning.
That is how I view home ownership. The ability to have the freedom to do what you want (in a non HOA community). Some people like to re-do their nursery, add a patio. Heck, I know a guy who suffers from a terrible bout of gout so he built himself a japanese sauna in his backyard.
Sure, he can go to the rent-a-sauna which doesn't open 24 hours a day. With his own home, he can get a hot sauna at 3AM if he wants to. As a renter, why would anyone have an incentive to invest in 'hardware' or upgrades that the landlord can simply veto or benefit.
So I guess in if I was to look at it from a logical fiscal point of view, it doesn't make sense for me to rent a garage for 10 years to support my hobby when doing it in our own home/garage is
more cost-effective. A home is more than the roof and shelter from the elements. Growing up, I had wonderful memories of my parent's home. One year, the backyard was a golf course. The next, we made it into a go kart race track. In high school, we converted it to basketball court.
That is how I view home ownership. The ability to have the freedom to do what you want (in a non HOA community).
Yeah, and that's BS, because you could spend enough money to do that without owning a home, and it might even be cheaper than buying a house. People often confuse ownership of a material good with "freedom." I am not more free because I own my own lawn mower; rather I'm engaging in consumption to have my own when it would actually be a better economic model if groups of neighbors chipped in to buy a communal lawn mower that was just passed down with the house. If I want to have my own auto shop, why does it need to be attached to my house? Ultimately, I am more free if it's not -- because I might move to a new neighborhood or the next town over, or maybe even across the country and I can sell my unattached auto shop to a fellow enthusiast, instead of taking a massive hit on the sale of my house because the new owner doesn't need an auto shop.
If you want to consume, go ahead and consume (no judgment from me), but don't conflate it with some nonsense about memories in a "home" or a "passion." Ultimately it's consumption. House buying is just yet another form of consumption.
Even with your classic car hobby, you don't need a house. You could buy or rent a dedicated car shop if you chose to do so. It has absolutely nothing with buying a house, other than it happens to be attached. In addition, very little stops you from doing a lot of that in a rental. I've even lived in a rental that had a nursery done up better than I would have done it myself -- I paid nothing extra for this!
Heck, I know a guy who suffers from a terrible bout of gout so he built himself a japanese sauna in his backyard.
A sauna (i.e. a wood room designed for containing steam) in his backyard. Okay, if you say so.
A home is more than the roof and shelter from the elements. Growing up, I had wonderful memories of my parent's home. One year, the backyard was a golf course. The next, we made it into a go kart race track. In high school, we converted it to basketball court.
No, see, this is exactly why your statement is flawed. Your parents' house is no longer a golf course, and yet you still have a memory of it.
Look, none of this is to take the extreme viewpoint as some people take here that buying is always a waste. In fact, I have a much more nuanced opinion, and you can look back through prior posts of mine to find it. Buying can make financial sense, and in most markets it should be cheaper than renting. I've done both at various times. In some markets, like mine, it's currently cheaper to rent. But that has absolutely nothing to do with my memories or my hobbies -- there's no reason to tie those things together.
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"Buy happy vs rent sad", Or "Buy sad vs rent happy?"
Which one are you?
I often come to Patrick to study human behavior because I believe human behavior is the one of main driver of housing price.
From several years of observation, many of you are not really Happy Renters like you want others to believe. Some of you are renting and postpone buying until the price is cheap enough. Deep down, you still want to be a owner. Has your own place to call Home, a shelter over your head, a place you can decorate/paint as you want, a large big yard to invite friends over to BBQ(or showoff), I know. I was one of "you".
I own now. 2 houses. One for rent, one as my primary residence. I bought the 1st one in Dec 2010, 2nd one in 2011. I could have wait and hope for a big drop. Sure. I could even make more money by putting that in stocks. (I made over 45% RoI in my portfolio. Thanks to several small cap, now turned mid cap).
But then, there's a tradeoff. My kid and wife would continue to live in a temporary lifestyle. Can we remodel the kitchen to our taste? Can we have a pet? Can I have my own band room like I always want? I love vintage mid century furniture, should I buy them now or wait until we have a house 'cos the furnitures made not fit the new house? Can I build a dream backyard to really enjoy it or do I just bring my kid to a public park and call it a day? Can I get a new fridge now or stay with the old, inefficient one? People said you can rent a good house in a nice neighborhood. My research of local RE indicate that good house in good school charge a premium and I would pay near or more than mortgage to live there. Still can't call it a home until I could decorate the way I like it.
Looking back at my last 5 years of renting, I was really enjoying it because the money I saved. But near the end of it, I felt I really want to own a darn home myself and start living the lifestyle I intend to use the one for (before I forget what's the damn point of making money anyway, which is to improve the quality of living). I am in my 30s now, owning a place and raising my kid, paying off a home before 55 is my goal. Should be okay, since the mortgage is cheaper than rent for this SFR i live in. Price may drop more or go up from here, who knows for sure? There are too many variables and interventions I can't control, so why waste energy there.
It's my choice to take this particular financial path in life. Time will tell if I make more right decisions than wrongs. I am just happy to be home and live in a place I can smile happily every morning. Good luck to all happy homeowners and happy renters. Stay your course. :-)
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