Is a home an asset or liability?

[Sean]

Buy a house and make someone else pay you rent. Live in a cheap rent controlled apartment for many years. Win.

[pauldun170]

When you are older (not trying to knock your age), childless and single its no big deal to live "light".

Tigger's only concern is to have a suitable amount set aside to provide for himself when old age hits and he is no longer able to work.

Personally, if I were in his situation I'd pick up a condo or townhouse. MAYBE a small house (if I were anti social) vs pissing cash away but that's a personal choice.

[Amber Lamps]

Originally Posted by pauldun170

When you are older (not trying to knock your age), childless and single its no big deal to live "light".

Tigger's only concern is to have a suitable amount set aside to provide for himself when old age hits and he is no longer able to work.

Personally, if I were in his situation I'd pick up a condo or townhouse. MAYBE a small house (if I were anti social) vs pissing cash away but that's a personal choice.

A condo has it's advantages but can be a major loss in the end depending on the market. I actually owned a condo once and was lucky to sell it for enough to break my loan after 5 years of payments. The owners here are trying to get people to buy these apts but their prices are ridiculous!

[t-homo]

To buy the apartment complex? Or just individual?

[Amber Lamps]

Originally Posted by t-rock

To buy the apartment complex? Or just individual?

They want to make these condos...

[RACER X]

Originally Posted by TIGGER

Yep you will just be paying on the principal by that time, congratulations!!! I'm sure that the bank totally appreciates your efforts to pay them interest for the last 20 years!

and in the meanwhile your landlord is laughin his way to the bank, thanks for paying MY mortgage.

w/ your plan you have to pay for rent, save for buying your future home 20yrs from now and save for retirement.

and i agree w/ paul if your single and your age, i'd live like a college kid like you too.

[Captain Morgan]

Originally Posted by TIGGER

If that's the case then subtract those amounts from my rent figure. You aren't including them for the homeowner. Come on bro, at least try to play a little fair. When you set up your buyer, you made a point of leaving out taxes, upkeep, etc. Then you go on about how I pay those things IN MY RENT. That's my argument. I pay $460/month plus $140/month utilities (electric, cable, gas) for a $600 per month living expense TOTAL. I don't pay anything else because it is included in my rent. I don't pay a water bill, I don't pay for trash pick up, I don't pay to have the grass mowed, I don't pay for repairs, I don't pay property tax, etc. Sure it's in my rent but that's my point, how much of that is included in your house payment? 0 You can't decide to leave all that stuff out of your equation and declare that this is a fair comparison. Granted, I can exaggerate but you are eliminating all the negative factors in total.

FWIW BTW, the leasing company wants me to sign another lease for....$460/month.

I think the problem with your argument is that you're comparing a small apartment to a larger house. If you want a true comparison, you'd need to compare the same size home to your apartment. Personally, I bought a fairly small house. It's 2 Bdrm, 1 bath, 1 car garage and 3/4 basement. My mortgage, insurance and taxes combined is $440 a month (but I pay $500 to put more toward principal). I put zero down when I bought the house a year ago (VA loan). The same size apartment (without a basement) would cost me $615, plus utilities, to rent. Now, personally, I'm doing some upgrades to my house. They aren't necessary, but they're things I want, so I don't think they're relevant to the discussion. I could pay my $500 per month, live here for a couple years without upgrades, sell the place and quite likely come out ahead vs. renting the same size place. I don't intend to do that, but I could. Now, I don't get a tax deduction for mortgage interest because I'm paying less than the standard deduction, but I still think I'd come out ahead of someone renting the same size place.

Originally Posted by Homeslice

TIGGER seems to be assuming that you always buy in a flat market that never rises, and that you always spend money on upkeep and repairs. Like I said before, I know plenty of people who only kept their home for 2-3 years, yet made a profit after selling it. Is that the norm, no, but it's possible depending if you're in an upswing.

Yes, but you're in San Fran, so it stands to reason you'd know several people who've done that.

[Homeslice]

Originally Posted by Sean

Buy a house and make someone else pay you rent. Live in a cheap rent controlled apartment for many years. Win.

How much is the rent you're paying compared to the rent you're earning? The reason I ask is, I've always been leery of the idea of being a landlord while still paying rent yourself.....Seems like your net cashflow would zero itself out. Of course, you get some business deductions from being a landlord though.

I could also see it being a good deal if the house you own is way out in the sticks, and you wanted to keep living in a nicer area for quality of life reasons.

[Homeslice]

Originally Posted by Captain Morgan

Yes, but you're in San Fran, so it stands to reason you'd know several people who've done that.

Even in the Midwest......larger areas like Chicago.......It wasn't uncommon for people to buy a home in say 2000, and have it appreciate 10-15% every year......

Up until the crash of course.

I'm just saying, this whole idea that nobody makes a profit is hogwash.

In some cases it takes longer than others...............If you bought a home in LA around 91-92, you wouldn't have broken even until like 98-99, due to the bad market in between there. But for those who held onto it........

[goof2]

Originally Posted by Gay Fanboy

Karl, I'm including everything and I realize that different markets have different numbers. Try telling me I'm wrong if you live in the DC area. How about parts of California? New York? There are parts of this country that you will pay $5000+ on a $100,000 house annually in taxes. Heck, some of you pay association fees monthly. Some of you pay for snow removal. ETC. I will never pay more than $600 total to live here for the length of my lease, period.

Try renting in the DC area, California, or New York. For an accurate comparison you really need to compare housing prices in your area. You also need to use the value of a house that is similar in size, similar in amenities, and has very little land. In your costs you are also not factoring in the fact that interest paid on a mortgage is tax deductible. Rent is not.

None of that really matters though. There are a lot of reasons why people own a home rather than renting and only one of them is financial. If those additional reasons do not exist for you, great. You will be happier renting. If those additional reasons do exist you might want to consider buying. The decision is up to each individual, but any of the financial justifications that have been given, on either side, require future knowledge I'm pretty sure none of us have.