I bought my long term home last year. I should have it paid off in ~15 years right before I retire. I don't care if there's a downturn soon because I won't be selling it then anyways.
I think it’s a huge 20-30 year liability for a terrible return and I can’t stomach the thought of it. Am I over thinking it?
The average decent single family home that isn’t 150 years old and on top of the neighbors house where we are is 500k and another 8-10k in taxes a year. We can pay the mortgage but I don’t want to. My wife and friends think I’m crazy.
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This probably the best answer here. So much bad information. I’ve owned a few homes going way back. Never lost money because it was mine/ours. Paying rent is asinine. You’ll never have anything, but what do I know.I bought my long term home last year. I should have it paid off in ~15 years right before I retire. I don't care if there's a downturn soon because I won't be selling it then anyways.
you need to understand, real estate is next to number #1 for making money. Once the land is gone, it's gone. Basically all the rich people I know own land and real estate. When you rent out you are pissing money away. Your home WILL increase in value. You may not see it quickly but you WILL make a profit. My first house, doubled my money in 7 years. My current house, Almost doubled in 3 years. If you can't afford your area, you need to move to a more affordable spot. You may even have to move states. The longer you wait, the more expensive it will be. Several of my friends got ****ed, they waited too long, and now they can't afford a house.I think it’s a huge 20-30 year liability for a terrible return and I can’t stomach the thought of it. Am I over thinking it?
The average decent single family home that isn’t 150 years old and on top of the neighbors house where we are is 500k and another 8-10k in taxes a year. We can pay the mortgage but I don’t want to. My wife and friends think I’m crazy.
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Yes, but in the end you have nothing. It's like throwing money out the window. While $500k is expensive for just a decent house, it will be yours, and you will be building equity as you pay down the mortgage and the house appreciates. Your other option is to buy a multi-unit property and live rent free as tenants pay your mortgage, but it doesn't seem like you'd be willing to do the upkeep or maintenance.
I heard the same arguments during the last bubble. It's amazing how many people still have their heads up their asses after not learning anything the last time around. They'll probably blame the banks for their own greed and stupidity this time too. Home prices can't outrun wages foreverWait for it to come crashing down soon. It could be around the corner. It could be next month. It could be a year from now. The problem is, every Tom, Dick, and Harry is predicting it's going to crash ASAP. Once again, time in the market is the best thing, not trying to time it.
Google, reddit, news, whatever outlet you want, they've been preaching the 'end is near' bubble forever.
2013:
The Next Housing Bubble Is About To Pop All Over You - Gawkergawker.com/the-next-housing-bubble-is-about-to-pop-all-over-you-510108728
2014:
Here's proof the housing bubble is about to burst | 2014-04-15 ...https://www.housingwire.com/.../29669-heres-proof-the-housing-bubble-is-about-to-b...
2015:
Get Ready for Another Real Estate Bubble | The Fiscal Timeshttps://www.thefiscaltimes.com/2015/03/03/Get-Ready-Another-Real-Estate-Bubble
2016:
4 Signs The Global Housing Bubble Is Already Bursting--Here's What ...https://www.forbes.com/.../4-signs-the-global-housing-bubble-is-already-bursting-her...
2017:
This veteran investor nailed the last housing bubble and now expects ...https://www.marketwatch.com › ... › Stocks › Howard Gold's No-Nonsense Investing
2018:
We're probably at peak housing. Here's what that means. - MarketWatchhttps://www.marketwatch.com › Economy & Politics
The fact is, while everyone's been holding out on buying in at the next crash, all the people who have a few years in have built up enough equity to pad the next dip. Here's California, Nevada and Arizona.
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Is buying for everyone? Hell no. Can you lose your ass in a downturn. Hell yes.
Is now the time to buy? Depends on a multitude of factors. Just don't sit on your ass and miss building equity waiting for an eventual drop.
I think it’s a huge 20-30 year liability for a terrible return and I can’t stomach the thought of it. Am I over thinking it?
The average decent single family home that isn’t 150 years old and on top of the neighbors house where we are is 500k and another 8-10k in taxes a year. We can pay the mortgage but I don’t want to. My wife and friends think I’m crazy.
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Right. The 500k loan I have actually costs me 800k over 30 years on top of let’s say 6k a year in tax. So let’s say nothing ever goes wrong, taxes never increase, I never have to replace or maintain anything and my home doubles its value and is worth 1 million. I paid 800k for the loan. I paid almost 200k in taxes. My house doubled but I broke even, and I had a huge financial burden for the thirty years.
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Huge financial burden? How much more is the monthly payment really going to be than what you pay in rent? If it is so much more that it is a burden it must be because the house you plan to buy is way more than what you currently rent. That's gotta be considered in all these calculations. If you choose this big nice home I would assume it's because that's what you really want. So why settle for renting something not up to your standard just because you could potentially only "break even" after 30 years if you purchase?
Then there's that time AFTER the mortgage is paid off to consider. You are then only paying minimal costs vs still paying rent which tips the scales more in your favor after each passing month. And you're essentially sitting on $1m( considering the numbers from your example) if you are ever forced to sell.
Don't buy because people say it's a good financial investment. Buy because a good portion of that mortgage payment would be going down the drain anyway in rent, it may as well be going towards something you'll eventually own.
I’m paying a little more than half in rent of what a comparable home would cost.
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Do you work in southboro?We’re on the bottom of a 2 family home. It’s a great situation I’m reluctant to leave.
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Is that just in your area or are you speaking in general?
What would be a comparable home to what your'e renting?
Id just buy. With raytheon in Marlboro and i believe a TJX building in Marlboro people are moving to those towns at a high rate. Housing will always be high in that area.The average 2 bedroom would be 2-2400 here.
So the 2 family we are in is owned by the daughter of my wife’s old boss. Her and her husband had a terrible experience with their first tenant. She trashed it and couldn’t stay current with rent. They fixed it back up and We moved in, originally planned for a few months. I paid for 3 months in full with a discount for paying in full. Then we decided to “re-up” for a full year paid in full with a discount again. They wanted 2k per month and I got away with a payment in full of 16,000 for the year with the agreement that if we leave early we are reimbursed for the months left minus one. Basically if we moved in June we get 5 months back.
A comparable home would be 400ish. We have a great deal that’s why I’m reluctant. Basically I’m paying now and comfortable but expecting to see a down turn in the next few years. We can for sure afford to buy but I feel like the markets high and the return over all isn’t fantastic.
We were pre-approved for something like an 800k mortgage. We gross together monthly on average 15k. She makes 83k per year and I’m around a 100. we have a few CCs with a combined few grand balance that we use to pay for everything during the month and 1 car payment of 385$
We live frugally.
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Do you work in southboro?