I Donated thefultonhow Posted January 9, 2018 I Donated Share Posted January 9, 2018 All you really made on that house is the 20% you saved by a family member gifting you a discount. I don't understand how people go on believing your home is an investment. If you buy a rental property or a second home, that's an investment. But the home you live in is very rarely an investment unless you severely downsize, move to a much cheaper housing market, or go live in the woods. One way or another, you need a home, and selling your home just means you roll the money over into the next home. It's still an investment. It's about net worth. Eventually, you are going to either move into an apartment at an old person's home, or die. At that point, you either have a bunch of money to spend on cruises, or your kids inherit a bunch of money. The homeownership gap is the number one reason why minorities as a whole have lower net worths than white people as a whole. And net worth begets net worth through the generations. My parents are currently parlaying $300k of net worth from their deceased parents' real estate investments into a major renovation on their house, and someday, I'm likely going to inherit the results of that too. Link to comment Share on other sites More sharing options...
baconbits Posted January 9, 2018 Share Posted January 9, 2018 All you really made on that house is the 20% you saved by a family member gifting you a discount. I don't understand how people go on believing your home is an investment. If you buy a rental property or a second home, that's an investment. But the home you live in is very rarely an investment unless you severely downsize, move to a much cheaper housing market, or go live in the woods. One way or another, you need a home, and selling your home just means you roll the money over into the next home. Just to make the numbers easy: If I bought a house for $100k, and because of the gift if equity, I only took a loan for $80k, and the housing market rebounded and the house is now valued at $135k, how is that not an investment? Even if I paid $100k for the house, I'm coming out $35k ahead. From your tone, you should probably stick to renting. All of my friends rent save for one, and their rents are higher than my mortgage, and at the end of the day, their apartment leasing office can decide to not renew their lease and then they're on the curb with nothing to show for it. Meanwhile, I pay my taxes and live in an area worthless for civic development (no worry about eminent domain) soooo... I always have something to show for it. What's there to lose? I bought at virtually the bottom of the market so it can only go up. Link to comment Share on other sites More sharing options...
I Donated thefultonhow Posted January 9, 2018 I Donated Share Posted January 9, 2018 From your tone, you should probably stick to renting. All of my friends rent save for one, and their rents are higher than my mortgage, and at the end of the day, their apartment leasing office can decide to not renew their lease and then they're on the curb with nothing to show for it. And their rents will go up over time. Mortgage stays the same, until it no longer exists, and then you just have property taxes. Link to comment Share on other sites More sharing options...
Flinkly Posted January 9, 2018 Share Posted January 9, 2018 (edited) home ownership isn't always roses, but it is the right way to go for some/most people. Edited January 9, 2018 by Flinkly * Build Thread * 26.53 MPG - 12 month Average * Link to comment Share on other sites More sharing options...
Brady Posted January 9, 2018 Share Posted January 9, 2018 Just to make the numbers easy: If I bought a house for $100k, and because of the gift if equity, I only took a loan for $80k, and the housing market rebounded and the house is now valued at $135k, how is that not an investment? Even if I paid $100k for the house, I'm coming out $35k ahead. From your tone, you should probably stick to renting. All of my friends rent save for one, and their rents are higher than my mortgage, and at the end of the day, their apartment leasing office can decide to not renew their lease and then they're on the curb with nothing to show for it. Meanwhile, I pay my taxes and live in an area worthless for civic development (no worry about eminent domain) soooo... I always have something to show for it. What's there to lose? I bought at virtually the bottom of the market so it can only go up. It's that you're basically only $20K ahead. Because unless you choose to rent, you don't get to keep the $35K. You'll put it into to another house that ALSO increased by $35K in value between the time you bought your home, and the time you sold it. So you aren't actually $35K ahead ... you're $35K even. So no, you're not losing anything, but you aren't really gaining anything either. Second properties and rental homes/investment properties ... those are investments, because in the end, you can sell it and not NEED to redistribute the money into a new place to live. Link to comment Share on other sites More sharing options...
Flinkly Posted January 9, 2018 Share Posted January 9, 2018 so throwing away lets say $1.2k in rent each month is better than putting that or less money into a home? even if all homes gained equal value, you would still "win" financially with buying a home in the long run (just to spell it out, you'd "win" cause most of that money you pay to a mortgage or to buy a home is still yours when you sell/move. rent goes to someone elses pocket, and when you move you don't get anything back.) * Build Thread * 26.53 MPG - 12 month Average * Link to comment Share on other sites More sharing options...
rmoore5 Posted January 9, 2018 Share Posted January 9, 2018 It's that you're basically only $20K ahead. Because unless you choose to rent, you don't get to keep the $35K. You'll put it into to another house that ALSO increased by $35K in value between the time you bought your home, and the time you sold it. So you aren't actually $35K ahead ... you're $35K even. So no, you're not losing anything, but you aren't really gaining anything either. Second properties and rental homes/investment properties ... those are investments, because in the end, you can sell it and not NEED to redistribute the money into a new place to live. And the love that your LL has for you is pricless Link to comment Share on other sites More sharing options...
rmoore5 Posted January 9, 2018 Share Posted January 9, 2018 But if I didn't invest in properties through my life, even major repair caused by renters, I would be financially in the position I am in my retirement years. Thank G-d I am very handy. I whole heartily agree, I retired at 58 and looking back could have gone years earlier due to my wife and my efforts in residential rentals. Sure I am continuing to work the rehabs and maintenance but it work that I enjoy and I don't punch a clock! Link to comment Share on other sites More sharing options...
Brady Posted January 9, 2018 Share Posted January 9, 2018 so throwing away lets say $1.2k in rent each month is better than putting that or less money into a home? even if all homes gained equal value, you would still "win" financially with buying a home in the long run (just to spell it out, you'd "win" cause most of that money you pay to a mortgage or to buy a home is still yours when you sell/move. rent goes to someone elses pocket, and when you move you don't get anything back.) I'm not saying that Renting is better than ownership, just that ownership isn't an "investment". You generally don't get to keep the money you "make". As in, it doesn't generally pay for anything. My point is you hear people say things like "I really want to sell my house because it's gained so much value!" Great. Now what? Oh right, you need to buy another house. It's not an investment. It's just a better use of money than rent in most markets. Link to comment Share on other sites More sharing options...
Rhitter Posted January 9, 2018 Share Posted January 9, 2018 "My house was swallowed by a huge sink hole caused by that recent earthquake, but then again who would notice with that huge mudslide last week. Shit... Is that a wild fire?" West coast problems. Hey, my sinkhole did not eat my house. Just saying. But, I did turn it into a gym. My OBXT build Link to comment Share on other sites More sharing options...
jasejase Posted January 9, 2018 Share Posted January 9, 2018 It's still an investment. It's about net worth. Eventually, you are going to either move into an apartment at an old person's home, or die. At that point, you either have a bunch of money to spend on cruises, or your kids inherit a bunch of money. The homeownership gap is the number one reason why minorities as a whole have lower net worths than white people as a whole. And net worth begets net worth through the generations. My parents are currently parlaying $300k of net worth from their deceased parents' real estate investments into a major renovation on their house, and someday, I'm likely going to inherit the results of that too. See for many people (more than you think), it's not an investment that you can use in terms of cash. It's something that they end up living in till the end, and even if they go to a home, they end up keeping it as long as they can and it gets swolled up the state or neglect. It's an investment for the middle to upper class more than anyone else. Link to comment Share on other sites More sharing options...
jasejase Posted January 9, 2018 Share Posted January 9, 2018 so throwing away lets say $1.2k in rent each month is better than putting that or less money into a home? Sometimes. Absolutely. Or, it's much closer than you think. Link to comment Share on other sites More sharing options...
Rhitter Posted January 9, 2018 Share Posted January 9, 2018 Oh and Bay area prices - supposedly my house is worth $200k more now then I bought it for two years ago. I don't really believe it, but.... My OBXT build Link to comment Share on other sites More sharing options...
jasejase Posted January 9, 2018 Share Posted January 9, 2018 Timing and market location are two HUGE factors when buying real estate. Some places you cant really go wrong. Link to comment Share on other sites More sharing options...
baconbits Posted January 9, 2018 Share Posted January 9, 2018 I'm not saying that Renting is better than ownership, just that ownership isn't an "investment". You generally don't get to keep the money you "make". As in, it doesn't generally pay for anything. My point is you hear people say things like "I really want to sell my house because it's gained so much value!" Great. Now what? Oh right, you need to buy another house. It's not an investment. It's just a better use of money than rent in most markets. Except I could sell my house, recoup the $20k gift of equity, $35k increased value, and $15k I've paid on the mortgage. Sitting on $70k, I'd pay off my ~$32k remaining student loans. I could then get an apartment instead of a house, and while that would cost me more per month in rent compared to a mortgage, it wouldn't tap out or wreck my budget. The only downside to that would be, like I said, I'd be flushing $1500/mo down the toilet for a roof over my head (instead of dumping it into a saving's account of sorts) and that because the rent is higher than a mortgage, I couldn't grow my rainy day savings as fast. Or sell when the housing market is good, sit in an apartment and wait for the next crash, and buy in at the bottom again... you know... like when you invest in stocks to make money. Buy low, sell high. To each their own, but seriously, compare the cost of renting versus the cost of a mortgage. They intersect after 20-30 years depending on house cost and interest rates and rent, where apartments are "cheaper" for the first 20-30 years and after that, a house is cheaper. Are you in it for long term or short term? Link to comment Share on other sites More sharing options...
jasejase Posted January 9, 2018 Share Posted January 9, 2018 Don't forget to value your time. What if you took all that work/energy/resource and put it into a second job, business venture, etc. It's worth something as well. If you did a week or two worth of work, that's one thing... but that's never the case with a house. Link to comment Share on other sites More sharing options...
Flinkly Posted January 9, 2018 Share Posted January 9, 2018 Alright, we're off track. lets agree to disagree about buy vs. rent and get back to pictures (and discussion) of home improvement. Thanks! * Build Thread * 26.53 MPG - 12 month Average * Link to comment Share on other sites More sharing options...
FJuan Posted January 9, 2018 Share Posted January 9, 2018 My wife's balls are delicious. Link to comment Share on other sites More sharing options...
Brady Posted January 9, 2018 Share Posted January 9, 2018 Except I could sell my house, recoup the $20k gift of equity, $35k increased value, and $15k I've paid on the mortgage. Sitting on $70k, I'd pay off my ~$32k remaining student loans. I could then get an apartment instead of a house, and while that would cost me more per month in rent compared to a mortgage, it wouldn't tap out or wreck my budget. The only downside to that would be, like I said, I'd be flushing $1500/mo down the toilet for a roof over my head (instead of dumping it into a saving's account of sorts) and that because the rent is higher than a mortgage, I couldn't grow my rainy day savings as fast. Or sell when the housing market is good, sit in an apartment and wait for the next crash, and buy in at the bottom again... you know... like when you invest in stocks to make money. Buy low, sell high. To each their own, but seriously, compare the cost of renting versus the cost of a mortgage. They intersect after 20-30 years depending on house cost and interest rates and rent, where apartments are "cheaper" for the first 20-30 years and after that, a house is cheaper. Are you in it for long term or short term? So, first of all, you didn't "make" money on the 20% gift. That gift is a gift. It's not your investment. So then you're still at 35,000. But on your 80,000 loan, if you've paid $15,000 in mortgage payments, you've also paid over $5,000 in interest to the bank, so your 15,000 of mortgage payments is only 10,000 equity. Great, you're up $45,000. You're going to pay off 32,000 in student loans which is going to save you some interest on your student loans. Now you've got $13,000 cash and you'll be able to put that money saved each month toward a down payment on a house. Which will now cost you even more than it did before, because you've probably given up a couple years renting while you save. Ultimately, the house didn't do much for you. It just shifted money around in the years you paid for the house and then saved for a new house. Link to comment Share on other sites More sharing options...
Brady Posted January 9, 2018 Share Posted January 9, 2018 Alright, we're off track. lets agree to disagree about buy vs. rent and get back to pictures (and discussion) of home improvement. Thanks! It's not a disagreement about renting vs. buying. It's a disagreement about whether your primary residence is an "investment." Link to comment Share on other sites More sharing options...
Flinkly Posted January 10, 2018 Share Posted January 10, 2018 So yesterday they finished DISCOVERING more rot/issues, and so the task of fixing, replacing, etc. can start. Who knows how much this is gonna cost yet, but my average guess is ~$8k. Insurance person said that it had to be a "sudden and accidental" problem for any sort of water damage to be taken care of. So for example, your incoming water line for the dishwasher bursts while you're at work and the flooring and some walls are ruined. She did say that maybe this could be covered, since there were no signs of an issue until some recent dripping inside was seen, but if we submit a claim, it would go against us and remove our no-claim discount, as well as potentially raising our premium. gotta love insurance. It is nice that there aren't any further suprises, and there wasn't any framing that needed replaced. just OSB and everything external of that. Also, apparently our neighbor came over to talk to the workers about an issue she has. we're part of a development of 42 houses, so i can only imagine that at least a few others have a similar issue to some degree. fun times. * Build Thread * 26.53 MPG - 12 month Average * Link to comment Share on other sites More sharing options...
jasejase Posted January 10, 2018 Share Posted January 10, 2018 It would probably be covered. What's the cause of Loss again? Link to comment Share on other sites More sharing options...
rmoore5 Posted January 11, 2018 Share Posted January 11, 2018 So yesterday they finished DISCOVERING more rot/issues, and so the task of fixing, replacing, etc. can start. Who knows how much this is gonna cost yet, but my average guess is ~$8k. Insurance person said that it had to be a "sudden and accidental" problem for any sort of water damage to be taken care of. So for example, your incoming water line for the dishwasher bursts while you're at work and the flooring and some walls are ruined. She did say that maybe this could be covered, since there were no signs of an issue until some recent dripping inside was seen, but if we submit a claim, it would go against us and remove our no-claim discount, as well as potentially raising our premium. gotta love insurance. It is nice that there aren't any further suprises, and there wasn't any framing that needed replaced. just OSB and everything external of that. Also, apparently our neighbor came over to talk to the workers about an issue she has. we're part of a development of 42 houses, so i can only imagine that at least a few others have a similar issue to some degree. fun times. $8K and no framing ??? F that. Seems high. Link to comment Share on other sites More sharing options...
jasejase Posted January 11, 2018 Share Posted January 11, 2018 In for pics of damage. We will estimate for you lol Link to comment Share on other sites More sharing options...
Flinkly Posted January 12, 2018 Share Posted January 12, 2018 (edited) It would probably be covered. What's the cause of Loss again? from the view of when they had it torn down to the sheathing (see my earlier pic), it looked like "half" the damage was from a leaking seal at the upper window, and the other "half" appeared to be caused by a gutter (which until we moved in didn't have the appropriate kickout flashing to guide water into the gutter vs. flowing onto the siding...). granted, even if the roof was pouring water onto the siding, it should be sealed up and not cause a problem.... right? then the damage caused was rot and insect ("outside"). a windowsill will need to be replaced inside (swollen from getting wet and being MDF), but otherwise no interior damage. i wish there was a way to talk to a claims person about it before submitting a claim, cause the ladies who answer the phone at "my" insurance office seem to have no clue since this isn't what comes through the office 80% of the time. but of course submitting a claim and having it rejected is a bad thing.... ugh... Edited January 12, 2018 by Flinkly added different view * Build Thread * 26.53 MPG - 12 month Average * Link to comment Share on other sites More sharing options...
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