4 ms·

I don't think you should buy a house unless you really need one. The transaction and maintenance costs are usually downplayed, and you don't know how it will d

I don't think you should buy a house unless you really need one. The transaction and maintenance costs are usually downplayed, and you don't know how it will do as an investment. If you don't need a house save and invest.

2OEH8eoCRo0 4y ago
I don't care how it will do as an investment, I don't like paying thousands of dollars a month to somebody else in the form of rent.
- mariodiana 4y ago
  I don't care so much about paying rent. What I care about is what happened to me, back in 2020. During the pandemic, the wealthy fled Manhattan and created a buying frenzy in Upstate NY, where I live. My landlady decided it was in her interest to cash in on that; and, so, when the whole world was being turned upside down, I got the news that I would have to look for another place to live. I bought a condo solely for the control it offered me. As far as I'm concerned, nobody gets to do that to me again.
- ska 4y ago
  It's usually a trade off between paying someone for rent, or paying someone else interest (and others for tax, maintenance, etc.) You can't really take the investment aspect or any of these others out of the analysis if you want to understand what's best for you. Particularly in countries with policies to encourage/subsidize home ownership the answer is often, "buy a place", but not always.
  - mancerayder 4y ago
    Interest is tax deductible, and if you have an investment property you can write off a lot of things. No tax benefits go to renters. That's one of many considerations here other than raw liabilities.
    - ska 4y ago
      This all depends on jurisdiction of course. Agree a investment property is a whole other can of worms, but not really relevant on the "should I buy or rent, personally" decision. For that one, you need to compare to other investments, which is in many ways more straightforward.
abrouwers 4y ago
Sure, buying doesn't always result in a positive return, but renting is guaranteed to not. Housing is usually a decent investment.
- ska 4y ago
  > but renting is guaranteed to not. This is only true if you assume the same housing at the same cost/mo (including everything). And assume timelines. Usually this isn't the case, so there are definitely scenarios where you are better off renting.
  - abrouwers 4y ago
    I guess I don't follow - if you rent, for any period of time (sure, I'm slightly assuming a longer period of time - say, >1 year), you will give the landlord rent money over that duration, and walk away with ~nothing at the end. I'm not saying it's impossible to lose LESS with buying unwisely / unluckily, of course.
    - ska 4y ago
      You have to factor in everything. It's not just rent payment vs. mortgage payment, it's everything you spend on housing (taxes, repairs, etc.) in two scenarios. In any situation where the rental scenario results in extra cash flow that you then invest, you can end up ahead in total, sometimes significantly so. It's all complicated by the fact that you are rarely comparing rent vs. buy on the actual same property. Remember also in the "buy" scenario you have to include closing costs etc. which can affect your timeline. Your 1yr is unrealistic, you'll eat 5-10% of sale price on just that, typically, which may be way more than rent.
insane_dreamer 4y ago
However you can write off your mortgage interest payments as a tax-deductible expense, which you don't benefit from as a renter; plus you're building equity that you can then resell later. There are always exceptions, but generally in the long run, at least in the US, you're much better off owning than renting.
- lotsofpulp 4y ago
  Mortgage interest deduction is only available for people who itemize, i.e. people who owe more federal income tax than the standard deduction. Per IRS statistics, only 11% of tax filers itemized in 2019. I would bet this deduction does not benefit anyone who is struggling to decide between renting or buying.
  - sure_about_that 4y ago
    ==I would bet this deduction does not benefit anyone who is struggling to decide between renting or buying.== I can tell you from personal experience that you are wrong.
  - smileysteve 4y ago
    With increasing housing costs and property taxes; it's getting easier and easier to surpass the standard deduction. If your state has income taxes, even easier. Example scenario: New >$3000/mo mortgage, $2000/mo to interest and property taxes = $24k. Have a 5% state income tax?, on $60k, that's another $3k deduction.
s1artibartfast 4y ago
Needs are pretty broad. A lot of people "need" home ownership to feel a sense of security and engage in the type of activities that make them happy

2OEH8eoCRo0 4y ago

I don't care how it will do as an investment, I don't like paying thousands of dollars a month to somebody else in the form of rent.

mariodiana 4y ago
I don't care so much about paying rent. What I care about is what happened to me, back in 2020. During the pandemic, the wealthy fled Manhattan and created a buying frenzy in Upstate NY, where I live. My landlady decided it was in her interest to cash in on that; and, so, when the whole world was being turned upside down, I got the news that I would have to look for another place to live. I bought a condo solely for the control it offered me. As far as I'm concerned, nobody gets to do that to me again.
ska 4y ago
It's usually a trade off between paying someone for rent, or paying someone else interest (and others for tax, maintenance, etc.) You can't really take the investment aspect or any of these others out of the analysis if you want to understand what's best for you. Particularly in countries with policies to encourage/subsidize home ownership the answer is often, "buy a place", but not always.
- mancerayder 4y ago
  Interest is tax deductible, and if you have an investment property you can write off a lot of things. No tax benefits go to renters. That's one of many considerations here other than raw liabilities.
  - ska 4y ago
    This all depends on jurisdiction of course. Agree a investment property is a whole other can of worms, but not really relevant on the "should I buy or rent, personally" decision. For that one, you need to compare to other investments, which is in many ways more straightforward.

abrouwers 4y ago

Sure, buying doesn't always result in a positive return, but renting is guaranteed to not. Housing is usually a decent investment.

ska 4y ago
> but renting is guaranteed to not. This is only true if you assume the same housing at the same cost/mo (including everything). And assume timelines. Usually this isn't the case, so there are definitely scenarios where you are better off renting.
- abrouwers 4y ago
  I guess I don't follow - if you rent, for any period of time (sure, I'm slightly assuming a longer period of time - say, >1 year), you will give the landlord rent money over that duration, and walk away with ~nothing at the end. I'm not saying it's impossible to lose LESS with buying unwisely / unluckily, of course.
  - ska 4y ago
    You have to factor in everything. It's not just rent payment vs. mortgage payment, it's everything you spend on housing (taxes, repairs, etc.) in two scenarios. In any situation where the rental scenario results in extra cash flow that you then invest, you can end up ahead in total, sometimes significantly so. It's all complicated by the fact that you are rarely comparing rent vs. buy on the actual same property. Remember also in the "buy" scenario you have to include closing costs etc. which can affect your timeline. Your 1yr is unrealistic, you'll eat 5-10% of sale price on just that, typically, which may be way more than rent.

insane_dreamer 4y ago

However you can write off your mortgage interest payments as a tax-deductible expense, which you don't benefit from as a renter; plus you're building equity that you can then resell later. There are always exceptions, but generally in the long run, at least in the US, you're much better off owning than renting.

lotsofpulp 4y ago
Mortgage interest deduction is only available for people who itemize, i.e. people who owe more federal income tax than the standard deduction. Per IRS statistics, only 11% of tax filers itemized in 2019. I would bet this deduction does not benefit anyone who is struggling to decide between renting or buying.
- sure_about_that 4y ago
  ==I would bet this deduction does not benefit anyone who is struggling to decide between renting or buying.== I can tell you from personal experience that you are wrong.
- smileysteve 4y ago
  With increasing housing costs and property taxes; it's getting easier and easier to surpass the standard deduction. If your state has income taxes, even easier. Example scenario: New >$3000/mo mortgage, $2000/mo to interest and property taxes = $24k. Have a 5% state income tax?, on $60k, that's another $3k deduction.

s1artibartfast 4y ago

Needs are pretty broad. A lot of people "need" home ownership to feel a sense of security and engage in the type of activities that make them happy