3 ms·

After I bought my house, the combination of maintenance, taxes, insurance, and mortgage interest was quite a bit higher than what I paid in rent (as I recall, $

After I bought my house, the combination of maintenance, taxes, insurance, and mortgage interest was quite a bit higher than what I paid in rent (as I recall, $400/month or more). That's money down the drain. I could have put $400 per month plus the entire principal repayment in the stock market. I'd have had less headache, less time spent on maintaining the property, and less stress from figuring out how to deal with problems while working crazy hours, plus a much better return. In my case, the house was a terrible investment. I didn't buy it as an investment (if I had, I'd have failed miserably).

pdonis 3y ago
> I didn't buy it as an investment Yes. So was buying the house a good idea for you, all things considered?
- bachmeier 3y ago
  Yes. A terrible investment relative to the stock market (I could easily pay cash for my house right now if I'd rented and put the leftover money in the stock market) but a good purchase. The answer would have been very different if had no kids.
reducesuffering 3y ago
It’s not that simple. If your principal is ~$1.5k/mth, then you actually own an extra $1.1k/mth, but it’s invested into SFH real estate rather than stock market. Then there’s the opportunity cost trade-off of the down payment being invested in SFH real estate or stock market. Maintenance problems can be solved purely by your equity savings put towards handymen. As that is exactly what most property owners do that would be renting to you.
- bachmeier 3y ago
  > If your principal is ~$1.5k/mth, then you actually own an extra $1.1k/mth The cost of the house (not counting principal repayment) was $400 above my rent, not $400.
  - reducesuffering 3y ago
    If your monthly PITI payment is $4k, principal $1.5k, rent $3.6k, then your net worth hit is actually only $2.5k/mth from the house. If you’re saying interest, taxes, and insurance were all $4k/mth, $400/mth, then sure, but people usually don’t talk about the costs of their mortgage that way.

pdonis 3y ago

> I didn't buy it as an investment Yes. So was buying the house a good idea for you, all things considered?

bachmeier 3y ago
Yes. A terrible investment relative to the stock market (I could easily pay cash for my house right now if I'd rented and put the leftover money in the stock market) but a good purchase. The answer would have been very different if had no kids.

reducesuffering 3y ago

It’s not that simple. If your principal is ~$1.5k/mth, then you actually own an extra $1.1k/mth, but it’s invested into SFH real estate rather than stock market. Then there’s the opportunity cost trade-off of the down payment being invested in SFH real estate or stock market. Maintenance problems can be solved purely by your equity savings put towards handymen. As that is exactly what most property owners do that would be renting to you.

bachmeier 3y ago
> If your principal is ~$1.5k/mth, then you actually own an extra $1.1k/mth The cost of the house (not counting principal repayment) was $400 above my rent, not $400.
- reducesuffering 3y ago
  If your monthly PITI payment is $4k, principal $1.5k, rent $3.6k, then your net worth hit is actually only $2.5k/mth from the house. If you’re saying interest, taxes, and insurance were all $4k/mth, $400/mth, then sure, but people usually don’t talk about the costs of their mortgage that way.