Is the American Dream not so Dreamy anymore???????

[eliza61]

True. But there still is that pesky property tax. Less than rent. But the house isn't quite payment free.

ETA: with rent, you don't worry about roof replacement or other repair and maintenance issues.

That's exactly the problem New Jerseyians have. My property taxes are almost 1000 a month. That's an extra grand every month for the "privilege" of home ownership. My house is on their market now. Seniors in this state can't afford to stay in their houses even after they are paid off.

 

[sukhakuli]

I have to say that the main reason we buy is because I hate renting. I have 4 kids and 2 dogs, do you know how quickly they can damage a house (I'm talking accidents here, not willful destruction)? And then I get all hyper because it's not my house they have damaged. When we buy, we just fix it. In addition, I get tired of living with other people's decor. I want to paint and decorate and remodel to my taste. We own a rental property, and the tenants are constantly griping because they don't like the carpet and paint colors. Too bad, it's not your house! I hate this feeling of maintaining other people's property, and never being able to make improvements because it's not mine.

So, that's more of a heart decision than a financial one. There are financial benefits, though. We have made a lot of money buying and selling houses over the years. Our rental has been a great investment, and the house we are currently living in will be, too. We bought near the bottom of the market, and prices are already going up quickly. You have to pay to live somewhere, you might as well live somewhere that will make you money, too.

Also, with interest rates so low, you may be better off putting your 20% down in to a Vanguard or some such than on the house. You will probably get a higher return that way. We chose not to put 20% down when we bought this house, even though we had it, and invested the money instead. My husband has a 10 year contract here, and we plan on staying after that as well. We will probably live here beyond retirement, and by then, the house will be paid off. Equity doesn't matter to us, we don't need to take out home equity loans, and don't plan on refinancing because the rate is so low, and we have no trouble making the payments, so having 20% down didn't matter.

 

[njmom47]

We bought a townhouse at the right time. It's a bit of both - home ownership and we take care of the inside, but the roof, stoop, grass, etc is done by the HOA. Our fees are quite reasonable at $153 a month.
We did actually start out by renting, decided we liked the area, and bought in the same community.
Rentals here are at least $1150 a month; our mortgage is just over $800 a month.

As everyone says, it depends on the local real estate market, which way housing prices will go, and location.

 

[AlohaNow]

How is getting a $20k deduction for mortgage interest and a $5k deduction for property taxes per year a myth?

I am saying that in our particular situation we do not benefit greatly from being able to itemize. Our annual interest is more around $10K and property taxes $1,500. Obviously, your digits are much higher, therefore, you benefit. Again, “Real estate is local.”

 

[ThereYouSeeHer]

In some ways we feel like we are still paying rent. We joke that Wells Fargo owns our house and we just rent it back from them every month. Which isn’t a joke, it’s actually true! We do have the freedom to make structural and esthetic changes, and have a dog, but you don’t actually own it until you own it.

Haha...this is so true. I always thought it was weird when certain applications or forms ask if you "rent or own." Well, we aren't renters, but we certainly don't own it either!

 

[disneycrazi]

Haha...this is so true. I always thought it was weird when certain applications or forms ask if you "rent or own." Well, we aren't renters, but we certainly don't own it either!

I never quite got that question either, always thought it seemed mis- worded somehow...