6 ms·

I agree with your premise but I suspect your numbers are a bit off. Regardless, whether it's 2 years or 3 years, to do the lifestyle you're suggesting takes an

I agree with your premise but I suspect your numbers are a bit off. Regardless, whether it's 2 years or 3 years, to do the lifestyle you're suggesting takes and incredible amount of willpower to be willing to sacrifice and prioritize. It's passing up that cell phone upgrade. It's cutting discretionary spending to zero. It's passing on happy hour and bringing lunch every day. While feasible, it's hard.. but suffering for two years to benefit for a decade. Quite possibly worth it.

Rapzid 10y ago
It's worth pointing out that is just for the down payment. If you want to get ahead in life you need to be "saving" that much and more every year. And oops, your expenses just shot up dramatically because now you're a home owner.
- smsm42 10y ago
  BTW everybody knows about mortgage payments/rent but many forget about property taxes you have to pay as a homeowner. That's about 1.5% of your house purchase cost every year. Of course, there are tax deductions for that but even after them it's still non-negligible chunk of cash on homes approaching $1M.
  - shostack 10y ago
    Don't forget about home repairs and renovations, HOA, and services like gardening, etc. depending on what you buy. It is easy to end up spending double rent on a comparable place. The difference is for now at least the home you buy can grow nicely so you need to do the math on rate of return for that vs other uses of that cash.
    - vonmoltke 10y ago
      Those are all expenses your landlord has to pay if you are renting. If those costs plus mortgage is double rent than either landlords are hemmoraging money or something is seriously fucked up with the housing market.
      - smsm42 10y ago
        True, but when you rent, the cost is obvious and stated upfront, however ownership has many hidden costs that are not apparent when you consider only purchasing price.
    - Rapzid 10y ago
      And closing/financing fees! If you end up taking a job out of area and decide to sell(understandable as now isn't the right time to be purchasing a rental) you're out the fees.
      - smsm42 10y ago
        Oh yeah, those. You pay through the nose when you buy and when you sell. Can easily knock several percentage points off the price you thought you're selling for, or add the same to the price you though you're buying for. One has to be very careful to include those in all calculations. Renting is mostly flat-rate experience, and owning has much higher variance of payments. But owning has its own benefits :)
      - vonmoltke 10y ago
        If you live in an area with closing fees on rentals, like I do, rhat's a wash.
  - shadowwolf007 10y ago
    Anecdote to back up what you wrote: When I bought my first home my loan (P+I) payment was $1300 per month on average (paid every 2 weeks), which was not only affordable but cheaper than what I was renting at once you accounted for interest deductions! But the taxes were somewhere around $500 a month after the township raised local property tax by the maximum year after year. Due to average daily balance laws and escrow regulations, we often had a substantial amount of money "invested" in to our escrow account. There was no amount of deductions to make this home an asset. It pushed a good quality home at a great price to something that now remains completely unoccupied. My situation is 100% atypical - but I more meant to illustrate how big of an impact property taxes can be.

Rapzid 10y ago

It's worth pointing out that is just for the down payment. If you want to get ahead in life you need to be "saving" that much and more every year. And oops, your expenses just shot up dramatically because now you're a home owner.

smsm42 10y ago
BTW everybody knows about mortgage payments/rent but many forget about property taxes you have to pay as a homeowner. That's about 1.5% of your house purchase cost every year. Of course, there are tax deductions for that but even after them it's still non-negligible chunk of cash on homes approaching $1M.
- shostack 10y ago
  Don't forget about home repairs and renovations, HOA, and services like gardening, etc. depending on what you buy. It is easy to end up spending double rent on a comparable place. The difference is for now at least the home you buy can grow nicely so you need to do the math on rate of return for that vs other uses of that cash.
  - vonmoltke 10y ago
    Those are all expenses your landlord has to pay if you are renting. If those costs plus mortgage is double rent than either landlords are hemmoraging money or something is seriously fucked up with the housing market.
    - smsm42 10y ago
      True, but when you rent, the cost is obvious and stated upfront, however ownership has many hidden costs that are not apparent when you consider only purchasing price.
  - Rapzid 10y ago
    And closing/financing fees! If you end up taking a job out of area and decide to sell(understandable as now isn't the right time to be purchasing a rental) you're out the fees.
    - smsm42 10y ago
      Oh yeah, those. You pay through the nose when you buy and when you sell. Can easily knock several percentage points off the price you thought you're selling for, or add the same to the price you though you're buying for. One has to be very careful to include those in all calculations. Renting is mostly flat-rate experience, and owning has much higher variance of payments. But owning has its own benefits :)
    - vonmoltke 10y ago
      If you live in an area with closing fees on rentals, like I do, rhat's a wash.
- shadowwolf007 10y ago
  Anecdote to back up what you wrote: When I bought my first home my loan (P+I) payment was $1300 per month on average (paid every 2 weeks), which was not only affordable but cheaper than what I was renting at once you accounted for interest deductions! But the taxes were somewhere around $500 a month after the township raised local property tax by the maximum year after year. Due to average daily balance laws and escrow regulations, we often had a substantial amount of money "invested" in to our escrow account. There was no amount of deductions to make this home an asset. It pushed a good quality home at a great price to something that now remains completely unoccupied. My situation is 100% atypical - but I more meant to illustrate how big of an impact property taxes can be.