Current Events > I'm starting to wonder what the point of owning a house in middle-age is.

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Let's say you're 40 years old. You have a spouse who is the same age, and 2 children, a boy who is 10, and a girl who is 12.

Why should you own a house? Why not just rent a house? Or flat, for that matter? What difference does it make?

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You're right. You're 40, do what you want.

Because hopefully you'll pay off your mortgage soon and have the security that comes with it. Not sure how/why you can't understand that.

ghostmess posted...

Because hopefully you'll pay off your mortgage soon and have the security that comes with it. Not sure how/why you can't understand that.

Perhaps I'm stupid. Can you explain it to me with hand puppets, please?

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My monthly mortgage payments are substantially cheaper than the equivalent rental costs would be for a house of the same size, and when the mortgage is paid off I end up with an asset worth around 110K.

Renting you end up with nothing, and you have no real control over your long term living plans as the landlord could decide to sell the property on a couple months notice. That is not good for children if you end up having to move area/school - it's a lot of disruption.

ArchiePeck posted...

My monthly mortgage payments are substantially cheaper than the equivalent rental costs would be for a house of the same size, and when the mortgage is paid off I end up with an asset worth around 110K.

Renting you end up with nothing, and you have no real control over your long term living plans as the landlord could decide to sell the property on a couple months notice. That is not good for children if you end up having to move area/school - it's a lot of disruption.

Have you ever done a cost analysis on maintenance/fees? I'm curious to know if it's worked out cheaper in monthly costs for you, asset ownership aside.
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ghostmess posted...

Because hopefully you'll pay off your mortgage soon and have the security that comes with it. Not sure how/why you can't understand that.

This to be honest minus the flaming
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Rent is often times equally or more expensive than a mortgage payment. The mortgage promises ownership eventually and you dont have the HOA doing constant invasive inspections.

The reason that everyone doesnt just get a mortgage is because you are required to pay a percentage up front, which most people dont have. Because of rent prices.
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Because you'll eventually own it and not have a check due every month.
You can do what you want with it and in it. I have my childhood mid 50s home and I'm 36. Got a backyard and front yard. Trees, pond, patio, etc.
Just don't be stupid and buy a track home or in a HOA. The whole point of having a home is to enjoy it. Be able to to what you want with it. Plant what you want. Paint it what you want. Alter what you want. You're going to spend the rest of your life there. It shouldn't be treated as a temporary investment to trade up in 5 years. And it sure as hell isn't something some third reich HOA afraid of minorities should have a say so on what you can do with.
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Have you ever done a cost analysis on maintenance/fees? I'm curious to know if it's worked out cheaper in monthly costs for you, asset ownership aside.

I've never sat down and worked it out, but there's no question it's still going to be way better.

The only major work we've ever done on our house in six years was a new roof (4K) as we had a couple little leaks due to the age of the roof (the houses were built in the late 70s). And even then, we effectively get that money back as it improves the house valuation - a surveyor will as a few thousand on for a roof under ten years old.

Before we got married we rented a two bedroom flat Glasgow for 600 a month. We own a three bedroom house with a garden twenty minutes outside Glasgow for slightly under 400 a month and it'll be paid off in our late 40s.

ArchiePeck posted...

Have you ever done a cost analysis on maintenance/fees? I'm curious to know if it's worked out cheaper in monthly costs for you, asset ownership aside.

I've never sat down and worked it out, but there's no question it's still going to be way better.

The only major work we've ever done on our house in six years was a new roof (4K) as we had a couple little leaks due to the age of the roof (the houses were built in the late 70s). And even then, we effectively get that money back as it improves the house valuation - a surveyor will as a few thousand on for a roof under ten years old.

Before we got married we rented a two bedroom flat Glasgow for 600 a month. We own a three bedroom house with a garden twenty minutes outside Glasgow for slightly under 400 a month and it'll be paid off in our late 40s.

That's crazy, I'm looking at a flat in Edinburgh for 800 a month rent. Good luck buying property in Edinburgh though :(

Been considering buying in the borders actually...
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Yeah I've got friends in Edinburgh that just can't save for a house because their rent is so much.

Come see me do comedy next time I'm through at The Stand or Monkey Barrel! Finished up for the year but should be back in February.

ArchiePeck posted...

Yeah I've got friends in Edinburgh that just can't save for a house because their rent is so much.

Come see me do comedy next time I'm through at The Stand or Monkey Barrel! Finished up for the year but should be back in February.

Give me a shout out when you do, I'll pop along for sure.
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Ive been thinking the same thing TC. Im 25 and single and at this point it looks like Ill be single for the rest of my life. Id rather just pay rent thru a landlord which is corporate america most likely and not have to deal with the bs in owning a house. In addition, its for me to even stay planted in a place for more than 3 years. Im worried about some bs happening to me in like a year, so idk how people can comfortably sign a 30 year mortgage and act like their life will be the exact same or better for the next 30 years. Lastly, I couldnt even afford a to buy a house in an area that I could see myself staying in long term, so why waste money on one? Id rather just use the money to invest in a business or rental property.
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The family you described is exactly someone who should own a home. With children youre less likely to move and will most likely have large costs (education, etc) so you may as well be building equity.

You can borrow against your equity with a bank for a very low interest rate (probably slightly higher than prime). And if you ever do eventually move that equity becomes cash in your pocket. Depending on how home values and the market went when you buy/sell you can get quite the return on your investment.

Take the first home I bought for example. Got it for 175,000. It appraised for 195,000. I made $20K right off the bat. We made some improvements (perhaps $3-4K) and sold it 5 years later for 215,000. So 40K in profit minus improvement and maintenance costs. Not too shabby of a return. If Im really generous with maintenance costs and even throw on interest I paid to the bank Id say 20K in net profit at least, simply by utilizing my credit to purchase instead of rent.

TL;DR: Build and take advantage of equity if you plan to live in a home for enough years to at least benefit from turns in the real estate market.
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CapnMuffin posted...

The family you described is exactly someone who should own a home. With children youre less likely to move and will most likely have large costs (education, etc) so you may as well be building equity.

You can borrow against your equity with a bank for a very low interest rate (probably slightly higher than prime). And if you ever do eventually move that equity becomes cash in your pocket. Depending on how home values and the market went when you buy/sell you can get quite the return on your investment.

Take the first home I bought for example. Got it for 175,000. It appraised for 195,000. I made $20K right off the bat. We made some improvements (perhaps $3-4K) and sold it 5 years later for 215,000. So 40K in profit minus improvement and maintenance costs. Not too shabby of a return. If Im really generous with maintenance costs and even throw on interest I paid to the bank Id say 20K in net profit at least, simply by utilizing my credit to purchase instead of rent.

TL;DR: Build and take advantage of equity if you plan to live in a home for enough years to at least benefit from turns in the real estate market.

So basically buy if you plan to live in an area 5+ years?
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JBaLLEN66 posted...

Ive been thinking the same thing TC. Im 25 and single and at this point it looks like Ill be single for the rest of my life. Id rather just pay rent thru a landlord which is corporate america most likely and not have to deal with the bs in owning a house. In addition, its for me to even stay planted in a place for more than 3 years. Im worried about some bs happening to me in like a year, so idk how people can comfortably sign a 30 year mortgage and act like their life will be the exact same or better for the next 30 years. Lastly, I couldnt even afford a to buy a house in an area that I could see myself staying in long term, so why waste money on one? Id rather just use the money to invest in a business or rental property.

I mean, for some people's lifestyles it might be more suitable to stick with renting, but you'd need to be confident of having a really good career path and being able to put a huge amount of additional money away in savings because if you don't own a home then you're going to have to pay rent your entire life. If you don't have the savings for this then you'll need to keep working for your entire life (like, even in your 70s and 80s!) or end up homeless and in government assisted living.

ArchiePeck posted...

JBaLLEN66 posted...

Ive been thinking the same thing TC. Im 25 and single and at this point it looks like Ill be single for the rest of my life. Id rather just pay rent thru a landlord which is corporate america most likely and not have to deal with the bs in owning a house. In addition, its for me to even stay planted in a place for more than 3 years. Im worried about some bs happening to me in like a year, so idk how people can comfortably sign a 30 year mortgage and act like their life will be the exact same or better for the next 30 years. Lastly, I couldnt even afford a to buy a house in an area that I could see myself staying in long term, so why waste money on one? Id rather just use the money to invest in a business or rental property.

I mean, for some people's lifestyles it might be more suitable to stick with renting, but you'd need to be confident of having a really good career path and being able to put a huge amount of additional money away in savings because if you don't own a home then you're going to have to pay rent your entire life. If you don't have the savings for this then you'll need to keep working for your entire life (like, even in your 70s and 80s!) or end up homeless and in government assisted living.

Im not completely against buying a house, but why should I lock myself in a 30 year mortgage in a place I would not even want to stay at longer than a year at most? The only areas I could afford to buy a house in are ***** areas. Some people do not care about where they live at and can handle living in BFE or amongst other deplorables and their food lions and plethora of cheap Chinese buffets.
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And Tc, I think posters here are low balling you on the true maintenance cost of owning a house. Its not just having a cheaper mortgage, you are basically committing sweat and cash in to your house. I rent a house owned by Wall Street and you can easily tell who is renting a house or financing one based off the appearances of the homes.
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