5 ms·

> Owning your own home is, in my view, the first step towards financial freedom. I don't disagree with you, but owning your own home can also be a step towards

by yosito 6y ago

> Owning your own home is, in my view, the first step towards financial freedom. I don't disagree with you, but owning your own home can also be a step towards financial ruin if you choose the wrong home. I know a few people who bought homes that they ended up losing huge amounts of money on and selling a few years later. Beyond that, it's also a commitment that comes with a huge opportunity cost. If I buy I house in Texas and later there's an opportunity in Oregon, I've got to deal with the house first before I can take the opportunity in Oregon. Lastly, the math doesn't always add up. Sometimes it makes more financial sense to rent (at least temporarily) than to own, but you have to do the math for your own situation.

VBprogrammer 6y ago
Personally I feel like buying housing, at least in the UK, makes a lot of sense. However, I have a friend who is currently in that kind of situation where it's certainly made me think twice. She bought a new built flat about 5 years ago in the outskirts of London. Following the Grenfell disaster it has gotten caught up in the inspections for fire safety and is now practically worthless until ~£70k worth of remedial works are carried out. She cannot remortgage it, she can't rent it out and she can't sell it. Pretty nasty scenario.
- XorNot 6y ago
  Apartments have always been kind of a sucker's deal compared to houses though. Houses in almost any condition can still be worth a ton, because you the owner have complete control over the state of the building on the land (including, knock it down and put a new one in).
  - ClumsyPilot 6y ago
    that because the laws in UK basically turn a apartment ownership into a indentured servitude - you pay 100 years of rent for the privilege of being bound to the place, taking the cost of any remedial works, having no stake in the land and on the hook for ground rent and any feed the management company dreams up In Czech Republic you actually own a share of the whole building and the land it stands on.
    - keerk43 6y ago
      Owning a share of the building has its own issues as well though. If your neighbours suck and don't care about maintaining the building adequately, then you're basically out of luck. Even worse, at least here in Finland some older apartment buildings in smaller cities are worth too little to get funding from bank for larger renovations, effectively making them impossible to do unless every tenant is capable and willing of getting a personal loan. I will never buy an apartment from reasons mentioned above. Just way too risky, at least with my own house it would be up to me what gets done and what doesn't.
      - ClumsyPilot 6y ago
        Certainly its a difficult subject, but I prefer owning something, rather than leasehold "renting for 100 years" as if we still have feudalism
        VBprogrammer 6y ago
        Freehold is one thing on a block of flats. The poor people who got conned into buying a house on a freehold basis where the legal protection for rent increases doesn't apply. That is a different matter.
pc86 6y ago
> and selling a few years later That might be part of the problem? It's extremely rare to make a profit selling a home less than 5 years after you bought it even in good-but-not-insane markets. Basically unheard of in under 3 years in not-insane markets. If the market slips you're easily looking at 7-8 years to break even. The math of a six-figure, three-decade loan just doesn't support quick flips even just to break even, and most people are way too proud to sell something for break even 5 years after they bought. Add in maintenance and it's easy to see how if you let that slip you can be on the losing end of a sale even 5-6 years later.
- yosito 6y ago
  Sure, you're correct. But there are many things that can force you to sell a house and take a loss.
- jcadam 6y ago
  Just sold a house in FL I bought in 2019. Realized I made a mistake in buying it - luckily the absolutely insane housing market right now in FL allowed me to get out without losing my shirt.
  - Hamuko 6y ago
    The housing market feels insane here as well. If my apartment fetches the same price per square metre as what other apartments in my area of the same age are listed for, my apartment would sell for like 30,000 € more today than what I paid for it like two years ago.
- JansjoFromIkea 6y ago
  to what extent is this factoring in the cost of rent? If I barely broke even on a sale after 5 years without accounting for the savings of not paying 5 years rent I'd be pretty happy with that exchange tbh.
- CuriouslyC 6y ago
  Depends on if you use a realtor to sell, if you get lucky in terms of unexpected maintenance, if you do any work on it yourself, and how much rentals cost in your area. It's not hard to make a short term profit as long as you keep realtors and contractors out of the mix.

by yosito 6y ago

VBprogrammer 6y ago

Personally I feel like buying housing, at least in the UK, makes a lot of sense. However, I have a friend who is currently in that kind of situation where it's certainly made me think twice. She bought a new built flat about 5 years ago in the outskirts of London. Following the Grenfell disaster it has gotten caught up in the inspections for fire safety and is now practically worthless until ~£70k worth of remedial works are carried out. She cannot remortgage it, she can't rent it out and she can't sell it. Pretty nasty scenario.

XorNot 6y ago
Apartments have always been kind of a sucker's deal compared to houses though. Houses in almost any condition can still be worth a ton, because you the owner have complete control over the state of the building on the land (including, knock it down and put a new one in).
- ClumsyPilot 6y ago
  that because the laws in UK basically turn a apartment ownership into a indentured servitude - you pay 100 years of rent for the privilege of being bound to the place, taking the cost of any remedial works, having no stake in the land and on the hook for ground rent and any feed the management company dreams up In Czech Republic you actually own a share of the whole building and the land it stands on.
  - keerk43 6y ago
    Owning a share of the building has its own issues as well though. If your neighbours suck and don't care about maintaining the building adequately, then you're basically out of luck. Even worse, at least here in Finland some older apartment buildings in smaller cities are worth too little to get funding from bank for larger renovations, effectively making them impossible to do unless every tenant is capable and willing of getting a personal loan. I will never buy an apartment from reasons mentioned above. Just way too risky, at least with my own house it would be up to me what gets done and what doesn't.
    - ClumsyPilot 6y ago
      Certainly its a difficult subject, but I prefer owning something, rather than leasehold "renting for 100 years" as if we still have feudalism
      - VBprogrammer 6y ago
        Freehold is one thing on a block of flats. The poor people who got conned into buying a house on a freehold basis where the legal protection for rent increases doesn't apply. That is a different matter.

pc86 6y ago

> and selling a few years later That might be part of the problem? It's extremely rare to make a profit selling a home less than 5 years after you bought it even in good-but-not-insane markets. Basically unheard of in under 3 years in not-insane markets. If the market slips you're easily looking at 7-8 years to break even. The math of a six-figure, three-decade loan just doesn't support quick flips even just to break even, and most people are way too proud to sell something for break even 5 years after they bought. Add in maintenance and it's easy to see how if you let that slip you can be on the losing end of a sale even 5-6 years later.

yosito 6y ago
Sure, you're correct. But there are many things that can force you to sell a house and take a loss.
jcadam 6y ago
Just sold a house in FL I bought in 2019. Realized I made a mistake in buying it - luckily the absolutely insane housing market right now in FL allowed me to get out without losing my shirt.
- Hamuko 6y ago
  The housing market feels insane here as well. If my apartment fetches the same price per square metre as what other apartments in my area of the same age are listed for, my apartment would sell for like 30,000 € more today than what I paid for it like two years ago.
JansjoFromIkea 6y ago
to what extent is this factoring in the cost of rent? If I barely broke even on a sale after 5 years without accounting for the savings of not paying 5 years rent I'd be pretty happy with that exchange tbh.
CuriouslyC 6y ago
Depends on if you use a realtor to sell, if you get lucky in terms of unexpected maintenance, if you do any work on it yourself, and how much rentals cost in your area. It's not hard to make a short term profit as long as you keep realtors and contractors out of the mix.