I hate buying a home. - Page 2 - The Planted Tank Forum

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post #16 of 33 (permalink) Old 02-14-2013, 01:53 PM
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Originally Posted by NWA-Planted View Post
Well first off on my house, i didn't put a down payment.

But how is it not an investment? I mean with anything in life is a gamble. But i got my property and house extremely cheap, since then even in the poor economy my property has gone up. Yes i still owe and pay interest and have tax etc.. But my monthly payment is over 100 dollars less(that includes traces and insurance) than what i was renting for, and it's my house my property, i want to tear down a wall i do it. (or build a fish house on a piece of your property like I did)

Not to mention thats the overhead you pay in renting is for repairs / taxes etc. I still see buying as a more effective use of money than renting the one down side is should the housing market flop and your upside down.

Outside that the only difference to me is i am handling my repairs not a landlord

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The only time that will matter though is if you decide to sell while you're upside down. We refi'd and took some equity out in 08. So right now I am more than likely upside down by about 20G. Since I don't plan on selling it doesn't matter. I fully intend to give the house to my avatar in the future if he wants it. By then it should have risen in value again. At a normal rate of appreciation not the inflated bubble rate. Again it all matters on your own personal time table. If you're looking to move in 2-5 years than no, a house is not a good investment. If you're a long timer than the opposite is true. Main thing is to not buy more house than you can afford.

Oldpunk, you're not buying a home. You're buying a house. They're different. A house is nothing more than a structure. That's what you're buying. A home is what you make it and can be anything from a mansion to a cardboard box.

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post #17 of 33 (permalink) Old 02-14-2013, 01:56 PM
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I feel the pain of looking. The last few place I've went and looked at were nasty. When you can smell the cat pee from outside the house, the inside isn't pleasant. lol.

I'm in a good position though, we sold our house to a developer who has plans later for the land (last house left on the block kind of deal) and we can stay 9 months after closing and just have to pay property taxes and keep the grass cut, etc, so 9 months with no mortgage and the ability to look and find the place we want and not take something quick because of time.

I just want a room for a tank rack and I'm happy. lol.

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post #18 of 33 (permalink) Old 02-14-2013, 02:02 PM
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Re: I hate buying a home.

I want my shop / fish house / wine brewing area... I will be happy with that!!!

Another thing to consider is modular housing NOT mobile, a modular title is considered a regular house and will gain value instead of loss.

Me and my wife are currently looking at a mobile floor plan but converted to modular... So 2300 sq ft, full finish, solid wood cabinets stone tile 1/2" finished dry wall etc... And we are going to come out about $60 a square foot... Just have to find some land!

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post #19 of 33 (permalink) Old 02-14-2013, 02:05 PM
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The joys and pains of home ownership... Know that the pains you go through are going to pan out in the end. must have a long term view when you enter this game... Keep your eye on the ball.

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post #20 of 33 (permalink) Old 02-14-2013, 02:05 PM
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Originally Posted by NWA-Planted View Post
I want my shop / fish house / wine brewing area... I will be happy with that!!!

Another thing to consider is modular housing NOT mobile, a modular title is considered a regular house and will gain value instead of loss.

Me and my wife are currently looking at a mobile floor plan but converted to modular... So 2300 sq ft, full finish, solid wood cabinets stone tile 1/2" finished dry wall etc... And we are going to come out about $60 a square foot... Just have to find some land!

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Go with 5/8" drywall.

Our house is just over 1850 sq.ft. 136G land and home in 99. 1.3 acres. I did a bunch of work myself and we added a lot of upgrades. Some I wouldn't do again some I would. Shoot our flooring was over $4/sq.ft. That's one thing I wouldn't do again. I stained all the trim work but had the builder's guy install. Solid wood doors throughout. (Which still need to be finished.) I did insist on 5/8" and am glad I did. Rockers didn't like it much though.

One of the other things I didn't consider is the current acceptable size of a 2 car garage. Wouldn't have cost much more to have added six feet or so if I had realized that the wood shop and 2 cars don't fit.

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post #21 of 33 (permalink) Old 02-14-2013, 02:06 PM
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Ok, guys, like most people you have been mislead into the true definition of terms.

Investment: The purchase of an asset that returns cash flow
Asset: Something you own 100% outright of value.
Liability: Something you own that financially exposes you to risk

Since you do not own your house (the bank owns it) and it does not return cash flow then it is not an investment
If you own your house outright than its an asset at best that requires a yearly rental payment to the government in the form of property taxes. ( not a very good asset that cost you money every year)
Since most people are financially obligated to a lender for their house that they think they own, but actually dont, then it is in every since of the word - a liability.

Also like most people you guys miss the difference or complete ignore it, between REAL and NOMINAL gains. By the time you add up all the insurance, maintenance, taxes and interest from your "nominal" gain IF your house went up in value, you might be slightly ahead, but when you adjust for inflation and put your gains in "REAL" terms then I guarantee 90% of homeowner lose money on their homes over the course of a 20 year mortgage. INFLATION MEANS EVERYTHING !!!

There has been 2 generations of brain washing the American public by the mortgage lenders and realtor associations into believing what you guys just said that somehow enslaving yourself in decades of debt is "the American dream"

Not trying to burst anyone's bubble here, but this is a line of reasoning we have been purposely led away from by people that have a vested interest in us not understanding it fully (namely the banks and realtors)


Here's another line of reasoning: People say buy now because interest rates are so low. So if low interest spur demand for homes, what happens when interest rates rise again and demand falls - again - and prices drop - again ? Homes are only worth what people can pay for them. What people can pay for them is wholly dependent on whether they can borrow the money and at what rate. So your homes value is not based on the home itself, but on market demand which is driven by Federal Reserve central planning and interest rates. -- This again is more risk - more liability.

Nothing wrong with buying a home, but there is equally nothing wrong with renting forever either. The math is not as clear cut and it is not the "dream" most have been led to believe.
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post #22 of 33 (permalink) Old 02-14-2013, 02:17 PM
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Can't people believe what they want and choose to spend their money how they see fit? Just because people have different views on terms or how they view their money spending, doesn't mean we need to address where we take issue with their sentiments. Besides, buying a house IS a big deal to a most people who buy a home and attempting to detract that from them is just a waste of your breath. Live and let live.

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Originally Posted by rbarn View Post
Ok, guys, like most people you have been mislead into the true definition of terms.

Investment: The purchase of an asset that returns cash flow
Asset: Something you own 100% outright of value.
Liability: Something you own that financially exposes you to risk

Since you do not own your house (the bank owns it) and it does not return cash flow then it is not an investment
If you own your house outright than its an asset at best that requires a yearly rental payment to the government in the form of property taxes. ( not a very good asset that cost you money every year)
Since most people are financially obligated to a lender for their house that they think they own, but actually dont, then it is in every since of the word - a liability.

Also like most people you guys miss the difference or complete ignore it, between REAL and NOMINAL gains. By the time you add up all the insurance, maintenance, taxes and interest from your "nominal" gain IF your house went up in value, you might be slightly ahead, but when you adjust for inflation and put your gains in "REAL" terms then I guarantee 90% of homeowner lose money on their homes over the course of a 20 year mortgage. INFLATION MEANS EVERYTHING !!!

There has been 2 generations of brain washing the American public by the mortgage lenders and realtor associations into believing what you guys just said that somehow enslaving yourself in decades of debt is "the American dream"

Not trying to burst anyone's bubble here, but this is a line of reasoning we have been purposely lead away from by people that have a vested interest in us not understanding it fully (namely the banks and realtors)



Here's another line of reasoning: People say buy now because interest rates are so low. So if low interest spur demand for homes, what happens when interest rates rise against and demand falls - again - and prices drop - again ? Homes are only worth what people can pay for them. What people can pay for them is wholly dependent on whether they can borrow the money and at what rate. So your homes value is not based on the home itself, but on market demand which is driven by Federal Reserve central planning and interest rates. -- This again is more risk - more liability.
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post #23 of 33 (permalink) Old 02-14-2013, 02:24 PM
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Originally Posted by rbarn View Post
Ok, guys, like most people you have been mislead into the true definition of terms.

Investment: The purchase of an asset that returns cash flow
Asset: Something you own 100% outright of value.
Liability: Something you own that financially exposes you to risk

Since you do not own your house (the bank owns it) and it does not return cash flow then it is not an investment
If you own your house outright than its an asset at best that requires a yearly rental payment to the government in the form of property taxes. ( not a very good asset that cost you money every year)
Since most people are financially obligated to a lender for their house that they think they own, but actually dont, then it is in every since of the word - a liability.

Also like most people you guys miss the difference or complete ignore it, between REAL and NOMINAL gains. By the time you add up all the insurance, maintenance, taxes and interest from your "nominal" gain IF your house went up in value, you might be slightly ahead, but when you adjust for inflation and put your gains in "REAL" terms then I guarantee 90% of homeowner lose money on their homes over the course of a 20 year mortgage. INFLATION MEANS EVERYTHING !!!

There has been 2 generations of brain washing the American public by the mortgage lenders and realtor associations into believing what you guys just said that somehow enslaving yourself in decades of debt is "the American dream"

Not trying to burst anyone's bubble here, but this is a line of reasoning we have been purposely led away from by people that have a vested interest in us not understanding it fully (namely the banks and realtors)


Here's another line of reasoning: People say buy now because interest rates are so low. So if low interest spur demand for homes, what happens when interest rates rise again and demand falls - again - and prices drop - again ? Homes are only worth what people can pay for them. What people can pay for them is wholly dependent on whether they can borrow the money and at what rate. So your homes value is not based on the home itself, but on market demand which is driven by Federal Reserve central planning and interest rates. -- This again is more risk - more liability.

Nothing wrong with buying a home, but there is equally nothing wrong with renting forever either. The math is not as clear cut and it is not the "dream" most have been led to believe.
Your not totally correct in your assumptions. Rent money is totally out the window and is fully unrecoverable. At least with a house you can recoup SOME of the money. At least with a mortgage you know exactly what your payment will be for the next 10, 20 or 30 years. (disregarding taxes and insurance of course. We are talking P&I only here) Renting your landlord can increase the rent according to HIS needs.

Within your rent you are still paying for this. The landlord may stroke the check but the renter is paying it. And the renter receives no tax credit for it. The renter is paying the property taxes and again receives no tax credit. (assuming you itemize of course). the main thing is not to use "creative" financing. Put the down payment on. Buy for the correct price. Use your head for more than a hatrack and come to terms with what you can realistically afford and you do win.

You can invest in the stock market but they don't always return an immediate cash flow. And in fact not only do you face the loss of interest/gains but also your entire principal amount.

Buying property is not the same as buying a car. Do you lease a car or buy it?

Dilution is the solution for the pollution.
Quote me as saying I was misquoted.
Once you get rid of integrity the rest is a piece of cake.
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post #24 of 33 (permalink) Old 02-14-2013, 02:24 PM
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Quote:
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Can't people believe what they want and choose to spend their money how they see fit? Just because people have different views on terms or how they view their money spending, doesn't mean we need to address where we take issue with their sentiments. Besides, buying a house IS a big deal to a most people who buy a home and attempting to detract that from them is just a waste of your breath. Live and let live.
I know this just went all "tea party" political.

----------

So the only thing to do is to rent and pay for a house for someone else to own then? Most rental properties are owned by big investment groups that buy houses outright with their own money, and then rent them into the ground, making as much as 10-20% return after taxes, insurance on there money, so by renting all you're doing is helping the evil rich people get richer.

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post #25 of 33 (permalink) Old 02-14-2013, 02:30 PM
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I know this just went all "tea party" political.

----------

So the only thing to do is to rent and pay for a house for someone else to own then? Most rental properties are owned by big investment groups that buy houses outright with their own money, and then rent them into the ground, making as much as 10-20% return after taxes, insurance on there money, so by renting all you're doing is helping the evil rich people get richer.
Nah, it's not political. Just money is all. Just people trying to give both sides of the argument in a more or less adult fashion. Let's keep it that way. And no personal attacks.

Dilution is the solution for the pollution.
Quote me as saying I was misquoted.
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post #26 of 33 (permalink) Old 02-14-2013, 02:34 PM
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Re: I hate buying a home.

I guess ultimately it depends on what kind of deal you can get. Any kind of home loan with the word variable is a disaster waiting to happen, thankfully i got mine locked. Which sadly isn't always a secure thing. Thats why they are pushing house buying currently cause you can lock in some outstanding fiance percentages.

Rbarn, thank you for clarifying asset vs liability vs investment, i sometimes forget that terminology used isn't always in the way we think!!

Though i still see a house as a good purchase as there is other non trackabe gains so to speak. Credit, memories etc that makes it more of a personal decision.

the bank owns the loan not the house so to speak. If you default yes the bank becomes the owner so they can sell and attempt to recoup money.

It also really depends on what you want to

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post #27 of 33 (permalink) Old 02-14-2013, 03:05 PM
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Sorry Rbarn, I wasn't trying to call names. I do understand it is a liability that you owe, and sometimes for a long time, sometimes not. I think the biggest mistake people make when shifting from renting to buying, is look at like I'm paying $1500 a month rent, with mortgage, taxes insurance, I will only pay $900 a month, so I'm saving $600 a month and then live $600 a month better instead of saving that $600 a month for balloon payments off their mortgage, or for home improvements or repairs. If you could sustain on $1500 a month renting, then save that extra $600 instead of leasing a $600 a month car or extending your means. This helps pay your house down faster, allows you to save money and invest that, have an emergency fund, etc. If you spend that extra $600 each month, then you need some roof work and don't have the extra money, then you need to take equity out of your house and then you owe more and end up in the cycle. The idea is to not get caught up in the cycle.

I much rather try my hand at owning though, win or loose, than rent and just pay the house off for someone else. Now that's an investment. lol.

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post #28 of 33 (permalink) Old 02-14-2013, 03:18 PM
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Sorry Rbarn, I wasn't trying to call names. I do understand it is a liability that you owe, and sometimes for a long time, sometimes not. I think the biggest mistake people make when shifting from renting to buying, is look at like I'm paying $1500 a month rent, with mortgage, taxes insurance, I will only pay $900 a month, so I'm saving $600 a month and then live $600 a month better instead of saving that $600 a month for balloon payments off their mortgage, or for home improvements or repairs. If you could sustain on $1500 a month renting, then save that extra $600 instead of leasing a $600 a month car or extending your means. This helps pay your house down faster, allows you to save money and invest that, have an emergency fund, etc. If you spend that extra $600 each month, then you need some roof work and don't have the extra money, then you need to take equity out of your house and then you owe more and end up in the cycle. The idea is to not get caught up in the cycle.

I much rather try my hand at owning though, win or loose, than rent and just pay the house off for someone else. Now that's an investment. lol.
Now that's advice you can take to the bank. Literally.

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post #29 of 33 (permalink) Old 02-14-2013, 03:21 PM
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Investment has different meanings in finance and economics.

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In economics, investment is related to saving and deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments.

In finance, investment is putting money into something with the expectation of gain, usually over a longer term. This may or may not be backed by research and analysis. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, inter alia, to inflation risk.

In contrast putting money into something with a hope of short-term gain, with or without thorough analysis, is gambling or speculation. This category would include most forms of derivatives, which incorporate a risk element without being long-term homes for money, and betting on horses. It would also include purchase of e.g. a company share in the hope of a short-term gain without any intention of holding it for the long term. Under the efficient market hypothesis, all investments with equal risk should have the same expected rate of return: that is to say there is a trade-off between risk and expected return. But that does not prevent one from investing in risky assets over the long term in the hope of benefiting from this trade-off. The common usage of investment to describe speculation has had a effect in real life aswell: it reduced investor capacity to discern investment from speculation, reduced investor awareness of risk associated with speculation, increased capital available to speculation, and decreased capital available to investment.
Quote:
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset).[1]

The balance sheet of a firm records the monetary[2] value of the assets owned by the firm. It is money and other valuables belonging to an individual or business.[1] Two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets.[3] Current assets include inventory, while fixed assets include such items as buildings and equipment.[4]

Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs,[4] and financial assets, including such items as accounts receivable, bonds and stocks.

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post #30 of 33 (permalink) Old 02-14-2013, 03:25 PM
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Then dont. nothing wrong with renting.



Its not an investment. Its a liability. What kind of returned could the money you spent on a down payment return at 5%/yr compounded over 20 years ?




And just think of all the money you saved in property taxes, insurance, maintenance, and interest payments.
What kind of investment are you guranteed 5% return? I'm all ears
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