buying a house without family money is very scary

morandetektor wrote:

Moran.

Houses are free.

Potentially, they pay you to live in them.

You have to be a moran's moran to mess this up.

Suppose you rent for $500 per month. That's $6000 per year. Let's say over a 10 year period. 60 thousand.

So you buy a house and LOSE 60,000 selling it 10 years later. You are only out your rent.

If you "LOSE" only 50,000, you're ahead by $10,000.

Renting is moranity writ large.

I was literally homeless at 18, (I lived in a car). (letsrun.com disclaimer... Now 30 years later wife and family, house and car, two weeks vacation per year, but still not quite sub 14 5k.)

This couldn't be further from the truth - there are many advantages to renting. I am a homeowner, and I'll be the first to tell you there are a laundry list of costs that come along with home ownership - many of them "hidden costs" that most of us don't think about.

nagoya wrote:

even if you're buying well within what you can/should afford, it's terrifying to lock up most of your savings when you could be one wrong move away from being canned, or company downsizes, or you want to move/change careers. If you do lose your job, you're x number of months away from having to deal with a forfeiture, losing your down payment, and ending up renting a 1br in a marginal part of town.

it makes sense that all of my prole friends rent forever, whereas those that came from upper middle to upper class all own their own homes.

I know many people who have at least two homes, using one as a rental property. Of course they are military and home loans are easy to get.

If you want to own a home and use it as a rental property look into large military posts...Hood, Campbell, Bragg....you’ll have turnover every 2-4yrs but your renter will pretty much never be fired and you’ll pretty much always have your rent.

That being said I’m 40 and rent because it makes no sense to buy when I’m moving every 2-4yrs.

Alan

morandetektor wrote:

Moran.

Houses are free.

Potentially, they pay you to live in them.

You have to be a moran's moran to mess this up.

Suppose you rent for $500 per month. That's $6000 per year. Let's say over a 10 year period. 60 thousand.

So you buy a house and LOSE 60,000 selling it 10 years later. You are only out your rent.

If you "LOSE" only 50,000, you're ahead by $10,000.

Renting is moranity writ large.

I was literally homeless at 18, (I lived in a car). (letsrun.com disclaimer... Now 30 years later wife and family, house and car, two weeks vacation per year, but still not quite sub 14 5k.)

The math is totally wrong here.

If you rented for $500 did that include anything like taxes, trash, sewer electrical, maintenance....?

If you buy a house for $60000 you are still having to pay taxes, trash ....and don't forget the fees for buying the house in the first place.

Owning a house is not that much of money make than people think it is.

Fortunately I'll never need to test your hypothesis

I didn't have any family money. In fact, I support my parents. I just busted my ass in school, went to a good college, and got a high-paying job. Voila, homeowner! Today (at age 37) I no longer even have a mortgage.

Why don't you have any family money? Do your parent not love you?

The math is totally right. My figures were simplified for morans. Is it so hard to conceive of the loss of $60,000 to include all of those other "expenses" ? If you can't even grasp a principle from a hypothetical situation, maybe you shouldn't be allowed to handle that much money anyway.

You're obviously looking to justify your decision not to buy, and that's fine. I won't try to convince you. I just thought I'd give you the benefit of my years of experience.

Renting is 100% loss. 100%. It's astonishing that anyone could portray that as a sane choice.

ChadBrad wrote:

People without family money should take fewer risks. They didn’t grow up learning how to be successful and, almost as important, deal with success. They are pre-wired for failure.

If you attain wealth it’s very important to pass it to you children to ensure they have as many advantages over their peers as possible.

.your obvious is showing

It depends on what the mortgage cost is for similar living situations. You're correct that renting is an expense, not an investment $60k. Let's say you buy for $120k. You put $20k down and your 30-year mortgage is $100k to start. Over 10 years, you will pay off about $20k in principle and the rest will go to interest. So you still have a "cost" of $40k in interest payments for purchasing. If housing prices stay flat over the 10 years, you've doubled your $20k down payment by paying down principle. When you sell, you probably have sales cost of approximately 6% of the value of the house, or $7200, so now your profit is down to $32800 on a $20k investment over 10 years. You historically can beat that return by just putting the $20k down payment in the market and renting.

If the housing market goes down, or you lose your job, or get transferred and have to sell earlier than 10 years, the numbers are worse.

The only way you "win" by buying is if the housing market goes up or you stay in the house long enough to pay off a significant portion of the principle.

Seriously , what crappy city do you guys live where rent is $500 and a new home is $120,000??!!

Not sure where the hell you guys live but of course buying a house makes sense with those prices on homes. People laugh at $2,500 per month rent in some cities, but it’s still more affordable than a $600,000-800,000 in the same area. People out here can do the down payment but then you become “House poor” if a spouse loses their job or you lose your job.

Maybe it’s just annoyance with how the stupid realtors out here push for “ buy the biggest you can afford” to pad their wallets. Renting is nice in some regards. Fireplace breaks down, need a new garbage disposal, etc....just call the landlord and have them deal with it. I despise house projects so this frees up more time to go out and do things....

I was just going with the $120k house because of his $500 rent example, to make them sorta comparable.

In my neighborhood, rents are about $2500 and houses are about $600k.

I could not afford to live in my neighborhood if I were shopping today.

troll game weak wrote:

ChadBrad wrote:

People without family money should take fewer risks. They didn’t grow up learning how to be successful and, almost as important, deal with success. They are pre-wired for failure.

If you attain wealth it’s very important to pass it to you children to ensure they have as many advantages over their peers as possible.

.your obvious is showing

Not a troll. Rich kids do better than poor kids. Look it up.

ChadBrad wrote:

troll game weak wrote:

.your obvious is showing

Not a troll. Rich kids do better than poor kids. Look it up.

well what happened to you then?

Honestly. Also I don’t understand why people don’t just ask their parents for help on a down payment and co-sign, it’s not rocket science

What is "family money"?

Ah, the rich kids of LR. A truly detestable lot you are.

UsedToBeKnowItAll wrote:

I was just going with the $120k house because of his $500 rent example, to make them sorta comparable.

In my neighborhood, rents are about $2500 and houses are about $600k.

I could not afford to live in my neighborhood if I were shopping today.

What crappy part of the country do you live in where you can buy a house for $600k, and why don’t you have enough money to afford one? Get a better job.

Everyday Millionaire wrote:

UsedToBeKnowItAll wrote:

I was just going with the $120k house because of his $500 rent example, to make them sorta comparable.

In my neighborhood, rents are about $2500 and houses are about $600k.

I could not afford to live in my neighborhood if I were shopping today.

What crappy part of the country do you live in where you can buy a house for $600k, and why don’t you have enough money to afford one? Get a better job.

I assume you're being sarcastic, but I'm perfectly happy in my neighborhood. And I'm perfectly happy not being house-poor. I have a 15-year mortgage, will retire early, and have extra money to live a pretty fulfilling life. I technically could afford a $600k house, but I would have to get a 30-year mortgage, and probably cut back on certain spending areas. No thanks.

The crappy part of the country I live in is right outside Boulder. Most people don't consider it a crappy part of the country.

spoiled fruit rotting against the tree wrote:

ChadBrad wrote:

Not a troll. Rich kids do better than poor kids. Look it up.

well what happened to you then?

I make a ton of money and live in a nice house. And I have a trust fund and my parents paid for my college and I’ve already fully funded my kids college. They’ll start out life ahead of other kids and hopefully pull even further ahead. Because that level of success is modeled for them every day of their lives and they have the genetic predisposition to capitalize on it. The whole time we are adding tremendous economic value to society.

It’s weird people think that evolutionary rules don’t apply to modern humans.