4 ms·

"You can do that when you own as well. You have to sell your house. " This is so incredibly wrong. Selling a house can be a massive and expensive undertaking.

"You can do that when you own as well. You have to sell your house. " This is so incredibly wrong. Selling a house can be a massive and expensive undertaking. Assuming agents are involved, you can expect to pay 6-9% of the value of the house in costs (agent fees, closing costs, etc), assuming the buyer doesn't find something that is against code or something that is starting to fail (furnace, roof, etc). You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency? You better hope the house value went up... Otherwise you're taking a $12,000-18,000 hit when you sell it. Sometimes, house values go DOWN-- and then you are under water.

larrys 12y ago
"You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency?" Well it goes without saying (and this is always true for anything you read on the web, right?) that the specifics of each persons circumstances need to be taken into account. Along those lines there are people that: a) Own their own business so they aren't employed by anyone and don't have a job opportunity to consider. b) Those in "a" have businesses that they intend to stick with and further may be tied down by either family or their wife's occupation (or children) c) Have considerable assets or family they wouldn't have to bail out. In any case along the lines of "family emergency" how would thinking of that situation allow anyone to ever take a chance or buy a house? What about having a startup (as only one example) and then having a "family emergency"? "Otherwise you're taking a $12,000-18,000 hit when you sell it" The main problem that I had with this article's slant is that it tried to quantify things in a way that made you think that all that mattered were dollars. Not everyone thinks like that. Or cares if they were to lose 12 to 18k they'd rather be a homeowner and live in a community as a homeowner rather than a renter in either an apartment building (with more transient residents) or as a renter in a condo or even as a renter in a neighborhood. And they are willing to part with money in order to do that. Same way some people might decide to spend $5000 on a vacation or $50,000 for an airplane (when flying the airlines obviously is cheaper in most cases).
- webwright 12y ago
  I own two houses and I agree with you. If you're in great financial shape and you'd be happy buying a house, buy a house. The vast majority of folks (americans, anyways) AREN'T in good financial shape, however, and often overestimate the permanence of their current situation. If you have to sell your house inside 5 years, you're in iffy shape. It can be financially catastrophic if you have to move during a down market. About 30% of folks are out of the house by the end of their 6th year, when they probably thought it was going to be their home for decades (source: http://www.nahb.org/generic.aspx?genericContentID=110770&channelID=311 http://www.nahb.org/generic.aspx?genericContentID=110770&cha... ).
bane 12y ago
Why would I sell my house when I can get somebody else to rent it and make my mortgage payments on that house for me? I'll just buy another house at my new location. In the end I'll now own two houses I do whatever I want with and my renter will own nothing.
- hnnewguy 12y ago
  >In the end I'll now own two houses I do whatever I want with and my renter will own nothing." Uh, you realize that when you buy a house, you end up paying tens, sometimes hundreds of thousands of dollars in interest beyond the value of the home? That's what the renter owns: money, in his pocket, compounding interest for decades. This is the reason why there's an economic calculation to be made. If you're paying the $1000 per month to rent a place that you could buy for a monthly mortgage, maintenance and tax cost of $1000, then, yes, you're an idiot for renting. But this doesn't happen in the real world, outside of the recent history of extremely fast-rising house prices and low interest rates.
  - bane 12y ago
    No, my renter is paying that for me. He's within a few percent of my mortgage in most markets (near the beginning of the loan, then as time goes on gets even more advantageous for the owner) so he's not working with some huge nest egg of capital that's making him loads of money. Especially if I just keeping financing at 100%. I can keep buyinbg properties and keep finding renters to pay them off for me as long as I feel like. Read the link I posted elsewhere here, buying is almost always better, even with the renter advantaged with a huge investment best egg to start. This nyt analysis isnt correct.
    - bane 12y ago
      Keep downvoting. Numbers don't lie. Do the math yourself and show your alternate calculations where you don't own a house at the end of the loan period if you buy and getting somebody to pay your mortgage as their rent makes you own it even cheaper.

larrys 12y ago

"You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency?" Well it goes without saying (and this is always true for anything you read on the web, right?) that the specifics of each persons circumstances need to be taken into account. Along those lines there are people that: a) Own their own business so they aren't employed by anyone and don't have a job opportunity to consider. b) Those in "a" have businesses that they intend to stick with and further may be tied down by either family or their wife's occupation (or children) c) Have considerable assets or family they wouldn't have to bail out. In any case along the lines of "family emergency" how would thinking of that situation allow anyone to ever take a chance or buy a house? What about having a startup (as only one example) and then having a "family emergency"? "Otherwise you're taking a $12,000-18,000 hit when you sell it" The main problem that I had with this article's slant is that it tried to quantify things in a way that made you think that all that mattered were dollars. Not everyone thinks like that. Or cares if they were to lose 12 to 18k they'd rather be a homeowner and live in a community as a homeowner rather than a renter in either an apartment building (with more transient residents) or as a renter in a condo or even as a renter in a neighborhood. And they are willing to part with money in order to do that. Same way some people might decide to spend $5000 on a vacation or $50,000 for an airplane (when flying the airlines obviously is cheaper in most cases).

webwright 12y ago
I own two houses and I agree with you. If you're in great financial shape and you'd be happy buying a house, buy a house. The vast majority of folks (americans, anyways) AREN'T in good financial shape, however, and often overestimate the permanence of their current situation. If you have to sell your house inside 5 years, you're in iffy shape. It can be financially catastrophic if you have to move during a down market. About 30% of folks are out of the house by the end of their 6th year, when they probably thought it was going to be their home for decades (source: http://www.nahb.org/generic.aspx?genericContentID=110770&channelID=311 http://www.nahb.org/generic.aspx?genericContentID=110770&cha... ).

bane 12y ago

Why would I sell my house when I can get somebody else to rent it and make my mortgage payments on that house for me? I'll just buy another house at my new location. In the end I'll now own two houses I do whatever I want with and my renter will own nothing.

hnnewguy 12y ago
>In the end I'll now own two houses I do whatever I want with and my renter will own nothing." Uh, you realize that when you buy a house, you end up paying tens, sometimes hundreds of thousands of dollars in interest beyond the value of the home? That's what the renter owns: money, in his pocket, compounding interest for decades. This is the reason why there's an economic calculation to be made. If you're paying the $1000 per month to rent a place that you could buy for a monthly mortgage, maintenance and tax cost of $1000, then, yes, you're an idiot for renting. But this doesn't happen in the real world, outside of the recent history of extremely fast-rising house prices and low interest rates.
- bane 12y ago
  No, my renter is paying that for me. He's within a few percent of my mortgage in most markets (near the beginning of the loan, then as time goes on gets even more advantageous for the owner) so he's not working with some huge nest egg of capital that's making him loads of money. Especially if I just keeping financing at 100%. I can keep buyinbg properties and keep finding renters to pay them off for me as long as I feel like. Read the link I posted elsewhere here, buying is almost always better, even with the renter advantaged with a huge investment best egg to start. This nyt analysis isnt correct.
  - bane 12y ago
    Keep downvoting. Numbers don't lie. Do the math yourself and show your alternate calculations where you don't own a house at the end of the loan period if you buy and getting somebody to pay your mortgage as their rent makes you own it even cheaper.