Is home ownership a good idea for everyone?

[TexasHusker]

Renting is better for some people, owning is better for some people.

My wife and I owned our townhome outright and decided to move last year, we ran the numbers and decided to rent at our new location and plan on doing so for the foreseeable future.

Homes do not always go up in value either, a lot of people were hit hard by the housing crash of 08 when their planned forced savings turned into walking away or taking a loss to sell. We sleep very well at night not owning, especially in Illinois.

While a home is not continously appreciating in value, over a decade timeframe it would be highly unusual that a home would not.

[97guns]

It's not that simple, though. I rented from the time I graduated college in 1986 until I was married and we bought our home in 1994.

I'm not looking for a pissing match but I'm just guessing you probably spent around $100,000 in rent for that 8 year span

[disneysteve]

I'm not looking for a pissing match but I'm just guessing you probably spent around $100,000 in rent for that 8 year span

Well, probably not since that was 25-30 years ago and rents weren't that high back then, but it wouldn't have mattered. I still wouldn't have bought instead of renting. I moved 3 times during those 8 years. That would have been a mess. Renting is far cleaner and easier when you're changing locations every couple of years. The last thing I needed while I was in the midst of med school and residency would have been dealing with the whole home buying and home selling process multiple times.

[AJ444]

While a home is not continously appreciating in value, over a decade timeframe it would be highly unusual that a home would not.

Happened to me and a lot of other people I know. It was not "highly unusual" after the crash, a lot of people are still underwater.

[kork13]

Both renting & buying have benefits. Renting provides a great deal more flexibility, and fewer unanticipated expenses. Home ownership allows you to preserve a portion of your housing costs as equity, while letting you settle down in an area long term.

When I was younger, I rented a series of apartments, because buying a house wouldn't make sense. I appreciated renting, and had no desire at the time to buy a house. I was moving almost every year, and was only just starting to get established financially. Once things settled down in those respects, I bought my first home, and was quite happy with it.

This is a question that depends a great deal on your individual situation, and there is often no perfect answer. But in general terms, I would say that if you need the flexibility to move every year or three, then rent. If you're planning to stay put long term, are financially prepared for it, and can handle repairs when required, then buying could be a good option.

[JoeP]

Home ownership has the disadvantage of putting the homeowner on the hook for maintenance, upgrades, and repairs. I've found that apartments in my area do a decent job of keeping things safe and liveable; the expenses are predictable and renters can shop around for prices and amenities that make sense for them.

I've found that home ownership puts quite a bit of burden on the homeowner. There are unplanned events that may have been averted by maintenance, or that require an emergency account to cover. Not everyone is handy or competent in repairs, so there is an extra cost for farming out the work.

[rennigade]

It isn't focused on buying a property as an investment. It's talking about the "investment" value of your primary home which isn't actually an investment at all. It's also asking a different question regarding if home ownership is the right move for everyone. So I don't think it belongs in the real estate section.

Real Estate Investing
A forum dedicated to all things real estate

Someone needs to drop the investing part. Maybe Real Estate Everything. But its hip to post every single thing in the general section because it gets the most views. Until its enforced it will continue to happen and will just be a cluster.

[TexasHusker]

If we are going to break out real estate from the general forum, I think we ought to have individual forums for a lot of diifferent types of investments:

Mutual funds
Annuities
Stocks
Bonds
Options - calls, puts, staddles
Pork bellies
Fine art
Precious metals
Collector coins
Energy partnerships
Jewelry
Treasury notes
Natural resources

[disneysteve]

Real Estate Investing
A forum dedicated to all things real estate

If we are going to break out real estate from the general forum, I think we ought to have individual forums for a lot of diifferent types of investments:

There were many who felt that real estate investing warranted it's own forum because there were so many threads dedicated to the topic that were starting to clog up the General Discussion and Investing and Banking forums. Plus it created a place for people with questions about that topic to post and look for answers.

Some of the other things you list, TH, like stocks, bonds, and mutual funds already belong in the Investing and Banking forum. Most of the other things on your list rarely if ever come up in discussion here so there's no reason to give them their own forums. Precious metals do get some action but not enough to separate those conversations. If that changes in the future, a dedicated forum could be created.

[LivingAlmostLarge]

We owned for 14 years and have now rented again for almost 2 years. Waste of money? Yes and No. We didn't know where we would be or what we would be making or how things would work out. So renting bought us flexibility and opportunity to make decisions. I think renting has it's positives that others mentioned. And it often times is underrated the true benefits of renting. It really is nice to not have to do any repairs or worry about stuff breaking. I noticed problem with the water pressure in our shower, but I shrug it off and decided I'm not going to worry. Our refrigerator freezes water and leaks but it works well enough. So no point in mentioning it. Our garage door gets stuck but it works again after pushing the button a few times.

[GoodSteward]

Happened to me and a lot of other people I know. It was not "highly unusual" after the crash, a lot of people are still underwater.

It's really an unfair thing in my eyes to say the house values fell. What really happened is the housing market got reset back to more reasonable levels. It was pushing too high and collapsed. In other words, the homes were never really worth the dollar amount they were being paid for, so it was bound to crash.

People are willing to pay premiums for things when there is a very high demand for them, but that doesn't mean they are worth it. I see it all the time in tech. People will pay well over retail for the item because it is the newest, best on the market. The Oculus VR headset that retailed $600 went for over $1500 on eBay last year due to it being so hyped and the preorder wait time was so long. Just hours into the first preorder day and your order was pushed out months. Six months later, you can get it right away for retail. When the market shifts back and you can buy something for regular price it appears the value dropped when you realize you paid a lot more than it was actually worth. The value didn't go down in half. It reset, but you bought in when it was over-inflated in value.

This is what happened to the housing market. There was an unrealistic, overinflated value on houses and it came back down. It just sucks for those who bought in at that time and in those areas(it didn't hit every area).

[disneysteve]

It's really an unfair thing in my eyes to say the house values fell. What really happened is the housing market got reset back to more reasonable levels. It was pushing too high and collapsed. In other words, the homes were never really worth the dollar amount they were being paid for

Something is worth whatever people are willing to pay, no more, no less.

If I try to sell my house for 300K and nobody makes an offer, then it isn't worth 300K. If 4 people make offers that are all above and beyond 300K, then it's worth more than 300K. And what it's worth today may be higher or lower than what it was worth last month or what it will be worth 6 months from now. Values aren't fixed. That's how supply and demand works.

[GoodSteward]

Something is worth whatever people are willing to pay, no more, no less.

If I try to sell my house for 300K and nobody makes an offer, then it isn't worth 300K. If 4 people make offers that are all above and beyond 300K, then it's worth more than 300K. And what it's worth today may be higher or lower than what it was worth last month or what it will be worth 6 months from now. Values aren't fixed. That's how supply and demand works.

I know, but that pretty much nulls the purpose of a market value of something. It must be based off something to start with. One way I look at a house value is based on what it would cost to build the same thing. If I can build it cheaper it isn't worth the price they are asking.

The better way to look at it, in my opinion, would be are the values maintaining or are they spiking? That would indicate if the market is stable or not, and if the demand is artificially raising the price (perceived value). If it is spiking it would be a red flag that it could also bottom out (like it has before). Just my 2 cents anyway.

You really can't tell for sure what will happen, but it seems HCOL areas are going to be hit harder if something does happen. From what I've seen, LCOL areas are like used cars. You hit a point where they all kinda even out in value and there is little difference, even if some are nicer. lol

[disneysteve]

I know, but that pretty much nulls the purpose of a market value of something. It must be based off something to start with.

True, but market value of something can change rapidly, even overnight or within the same day.

I collect Disney memorabilia. Years ago, Disney used to have collector conventions in Florida. Those who were registered for the convention could go to a special shop and buy limited edition convention souvenirs. Right down the hall was a convention room where dealers were set up selling collectibles. Many of the convention attendees were also dealers. They would go into the shop, buy a souvenir plate for $25, walk down the hall and sell that plate in their booth for $100 minutes later. In some cases, there were buyers hanging out at the exit of the shop buying things from people as they left before they even made it to the marketplace room. So how much was that plate worth? Was it worth $25 because that's what Disney was selling it for? Was it worth $100 because that's what it was going for in the other room? Or was it worth $15 because that's what you could pick one up for 6 months later when the hoopla died down and nobody else wanted one.

[TexasHusker]

True, but market value of something can change rapidly, even overnight or within the same day.

I collect Disney memorabilia. Years ago, Disney used to have collector conventions in Florida. Those who were registered for the convention could go to a special shop and buy limited edition convention souvenirs. Right down the hall was a convention room where dealers were set up selling collectibles. Many of the convention attendees were also dealers. They would go into the shop, buy a souvenir plate for $25, walk down the hall and sell that plate in their booth for $100 minutes later. In some cases, there were buyers hanging out at the exit of the shop buying things from people as they left before they even made it to the marketplace room. So how much was that plate worth? Was it worth $25 because that's what Disney was selling it for? Was it worth $100 because that's what it was going for in the other room? Or was it worth $15 because that's what you could pick one up for 6 months later when the hoopla died down and nobody else wanted one.

If home values were as volatile as Disneyana, there would be a lot few home owners, but a lot more speculators.

On that note, I have a wonderful "sorcerer mickey" table centerpiece, where Mickey is riding a wave with his hands ahead and a big grin on his face. I happened to be watching an interview on TV with the CEO of Disney I believe and he had the EXACT SAME PIECE! I would say this piece is maybe 10 years old now. Maybe be worth something in a few years?