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It's not quite that simple. We owned a house in Baltimore for 8 years, when we sold we got $3000 more than we had paid for it. Additionally we had done ~$40,000

It's not quite that simple. We owned a house in Baltimore for 8 years, when we sold we got $3000 more than we had paid for it. Additionally we had done ~$40,000 worth of work that a renter would not have. Add in $7500 in commission when we sold. If I can still do basic math, that's an extra $463.54 per month to be a home owner. Maybe we should have rented after all.

busterarm 13y ago
I know this, but it's not that simple either. Long term renters do put work/money into their apartments. My mom has put probably twice that into the NY apartment she's been renting since 1970. She did work that the landlord was unwilling to do or do quickly (we were repeatedly flooded out by our hoarder upstairs neighbor in the '90s and the landlord dragged their feet on repairs because they wanted a rent controlled tenant out). When you say you put $40k in work into your house and got $3k more than you paid for it, are you saying that you got $43k over your purchase price? If not I think we need to take another look at your accounting process here: a) the $40k is optional and b) if I'm right about your math, a bad investment. Not trying to be rude. If it comes off that way, sorry.
- zimbu668 13y ago
  No, we got $3000 over our purchase price. a) Yes the $40K was optional, but we probably would have had to sell for $20k less had we not done the work. Bringing our "ownership tax" to ~$275 a month. Pretty close to the lower end rent premium you mentioned above. b) It was absolutely a bad investment in straight financial terms. We did get the pleasure of a nicer house, for what it's worth. Also not trying to be rude :)
  - clavalle 13y ago
    So, compared to what you would pay for rent, were you able to recoup any of the stored value you paid over the years? Compared to losing 100% of what you would pay for shelter every month, how did what you end up with compare? Not as an investment, but as a value store?
    - zimbu668 13y ago
      My back of the envelope calculations said yes for us, but had we been able to save $100 a month (on rent) for the 8 years, then it would have been no. Had we not done any improvements, or maybe just done the best(going from 0 to 1/2 bath on the first floor) then I think it would have been a clear, but not massive win. So for our second house we looked for a place with "no potential." The early 90's kitchen had already been updated, the basement is finished, etc. Edit: Clarification.

busterarm 13y ago

I know this, but it's not that simple either. Long term renters do put work/money into their apartments. My mom has put probably twice that into the NY apartment she's been renting since 1970. She did work that the landlord was unwilling to do or do quickly (we were repeatedly flooded out by our hoarder upstairs neighbor in the '90s and the landlord dragged their feet on repairs because they wanted a rent controlled tenant out). When you say you put $40k in work into your house and got $3k more than you paid for it, are you saying that you got $43k over your purchase price? If not I think we need to take another look at your accounting process here: a) the $40k is optional and b) if I'm right about your math, a bad investment. Not trying to be rude. If it comes off that way, sorry.

zimbu668 13y ago
No, we got $3000 over our purchase price. a) Yes the $40K was optional, but we probably would have had to sell for $20k less had we not done the work. Bringing our "ownership tax" to ~$275 a month. Pretty close to the lower end rent premium you mentioned above. b) It was absolutely a bad investment in straight financial terms. We did get the pleasure of a nicer house, for what it's worth. Also not trying to be rude :)
- clavalle 13y ago
  So, compared to what you would pay for rent, were you able to recoup any of the stored value you paid over the years? Compared to losing 100% of what you would pay for shelter every month, how did what you end up with compare? Not as an investment, but as a value store?
  - zimbu668 13y ago
    My back of the envelope calculations said yes for us, but had we been able to save $100 a month (on rent) for the 8 years, then it would have been no. Had we not done any improvements, or maybe just done the best(going from 0 to 1/2 bath on the first floor) then I think it would have been a clear, but not massive win. So for our second house we looked for a place with "no potential." The early 90's kitchen had already been updated, the basement is finished, etc. Edit: Clarification.