4 ms·

For me in Texas, I am kicking myself for paying $800 rent a month for 4 years now (so I've "given" $40k to my landlord). That 40k I've given away would be reall

by esaym 10y ago

For me in Texas, I am kicking myself for paying $800 rent a month for 4 years now (so I've "given" $40k to my landlord). That 40k I've given away would be really nice to help me do a down payment on a house I'd like to buy (or anything I'd like to buy). But if I was "giving" away $7k a month, I'd be really kicking myself...

jimmywanger 10y ago
Hey I'm not trying to be snarky, but I'm trying to understand your point of view. You didn't "give" 40k to your landlord. You paid him for the use of his property, which presumably gave you shelter, kept you warm, gave you a place to park your car and keep your stuff, and he would fix anything that went wrong. That, to me, would like be me kicking myself for "giving" a hotel a couple hundred dollars for a room for a couple of days. A house provides you with shelter and warmth, and presumably provides these things to your family. You're paying money to take advantage of these things. Why is renting so much different from buying?
- ScottBurson 10y ago
  One might add, the amount of a mortgage payment that goes toward interest -- which is most of it at the beginning, and the fraction comes down only slowly -- is just as "wasted" as rent would have been.
  - jimmywanger 10y ago
    Well, the interest part of the mortgage payment is tax deductible, so that offsets things somewhat. Not 100%, but somewhat. Basically the amount you're paying in interest is tax-deductible, but you're not building equity.
    - dionidium 10y ago
      This benefit is often overestated (especially in discussions focused on the parts of the country with the highest housing costs (which is to say, places unlike Texas)). This guy was paying $800/mo for rent, so presumably he'd be looking at mortgages near that cost. If so, he'd almost certainly just take the standard deduction.
mywittyname 10y ago
You'd have "given" away a large chunk of that in interest and property taxes over that time anyway. Plus you'd be on the hook for maintenance and upkeep. A single major repair on a house can pay for an entire year of rent in cheaper areas. In other words, when renting, the upper bounds for housing costs is $9600/yr. While when owning, the lower bounds for housing costs is mortgage * 12, and you'll maybe get a small % of that back when you sell.

by esaym 10y ago

jimmywanger 10y ago

Hey I'm not trying to be snarky, but I'm trying to understand your point of view. You didn't "give" 40k to your landlord. You paid him for the use of his property, which presumably gave you shelter, kept you warm, gave you a place to park your car and keep your stuff, and he would fix anything that went wrong. That, to me, would like be me kicking myself for "giving" a hotel a couple hundred dollars for a room for a couple of days. A house provides you with shelter and warmth, and presumably provides these things to your family. You're paying money to take advantage of these things. Why is renting so much different from buying?

ScottBurson 10y ago
One might add, the amount of a mortgage payment that goes toward interest -- which is most of it at the beginning, and the fraction comes down only slowly -- is just as "wasted" as rent would have been.
- jimmywanger 10y ago
  Well, the interest part of the mortgage payment is tax deductible, so that offsets things somewhat. Not 100%, but somewhat. Basically the amount you're paying in interest is tax-deductible, but you're not building equity.
  - dionidium 10y ago
    This benefit is often overestated (especially in discussions focused on the parts of the country with the highest housing costs (which is to say, places unlike Texas)). This guy was paying $800/mo for rent, so presumably he'd be looking at mortgages near that cost. If so, he'd almost certainly just take the standard deduction.

mywittyname 10y ago

You'd have "given" away a large chunk of that in interest and property taxes over that time anyway. Plus you'd be on the hook for maintenance and upkeep. A single major repair on a house can pay for an entire year of rent in cheaper areas. In other words, when renting, the upper bounds for housing costs is $9600/yr. While when owning, the lower bounds for housing costs is mortgage * 12, and you'll maybe get a small % of that back when you sell.