mykevermin
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$120K? I shoulda gone to law school.
Interesting Story About a Guy Who Sues Debt Collectors
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[quote name='speedracer']Fair enough. I just think if it is the correct business decision to walk away from a contract, it's a no brainer. Every business entity on the planet iterates this decision every day and I just don't think individuals should be different. [/quote]
I just think contracts should only be able to be walked away from if both sides agree on the terms. If a person can't pay their debts, then going into bankruptcy is the legal and ethical way to do so. But it's only ethical if all avenues of paying the debt back have been exhausted.
[quote name='speedracer']
But mortgages are not de facto good debt. A business decision is made and if the value of the investment declines, people should weigh their current assets against liabilities and decide if it makes sense to continue or default on the contract.
[/QUOTE]
True, and I don't think most people should not buy houses with the aim of making money. Especially in the short term as the housing market is so volatile
But the point is everyone needs somewhere to live. Say you're at the point that you have a stable job, and know you want to stay in an area until retirement. It makes no sense to keep renting. Rent until you have a good down payment saved up, buy a house with in your means, and stay there until it's paid off (or close to it).
Then when you're ready to move (for retirement or whatever) you have a house you can sell and buy another without any debt being taken on. While if you were renting, then you either have to move and continue to pay rent, or take out a loan to buy a house unless you saved up a ton of money etc. And if you stayed there a decade or two or three then you're almost certain to end up with a pretty nice profit over the long haul.
So I do think a mortgage is a better choice than renting--with the huge caveat that you should only buy when you have a down payment saved up and should only buy a house that's well with in (and ideally well under) your means. As long as avoiding the hassles of renting--neighbors (if it's not a stand alone house), land lords etc.
And it's certainly better debt in that case than running up a credit card debt for crap you don't need etc. Mortgages can 100% be bad debut. But a mortgage within/below your means for a place you tend to live long term is a good choice vs. renting as you'll be able to have the money in pocket years down the road when you move. Vs. having nothing to show for it. Especially if you can pay less in mortgage than you would in rent (to offset interest).
But I agree with you 100% that you shouldn't buy until you have a sizable downpayment saved up, and will be able to pay off the mortgage early. I don't plan on buying until I get my student loans paid off. And with the nomadic nature of an academic career I want to wait until I have tenure somewhere and I'm sure I want to stay at that University long-term etc.
[quote name='fatherofcaitlyn']When somebody gets sick and loses their job, I think it is important that the person stops spending any money.
He or she and their family should move directly into a cardboard box and hand over all worldly possessions to creditors.[/QUOTE]
Like I said, emergencies happen and force people into debt. That's a very different situations from the single person who racks up credit card debt buying electronics, designer clothes, fine dining etc.
Though people who aren't financially independent and have families to support should get disability insurance. It's usually around $10 a month and will give the peace of mind of having a safety net if you become ill or injured and can't work for a long stretch. So even some of the emergency debts can be avoided if people plan ahead. Getting a financial adviser is a huge help there as then you can at least be aware of all the options out there.
I just think contracts should only be able to be walked away from if both sides agree on the terms. If a person can't pay their debts, then going into bankruptcy is the legal and ethical way to do so. But it's only ethical if all avenues of paying the debt back have been exhausted.
[quote name='speedracer']
But mortgages are not de facto good debt. A business decision is made and if the value of the investment declines, people should weigh their current assets against liabilities and decide if it makes sense to continue or default on the contract.
[/QUOTE]
True, and I don't think most people should not buy houses with the aim of making money. Especially in the short term as the housing market is so volatile
But the point is everyone needs somewhere to live. Say you're at the point that you have a stable job, and know you want to stay in an area until retirement. It makes no sense to keep renting. Rent until you have a good down payment saved up, buy a house with in your means, and stay there until it's paid off (or close to it).
Then when you're ready to move (for retirement or whatever) you have a house you can sell and buy another without any debt being taken on. While if you were renting, then you either have to move and continue to pay rent, or take out a loan to buy a house unless you saved up a ton of money etc. And if you stayed there a decade or two or three then you're almost certain to end up with a pretty nice profit over the long haul.
So I do think a mortgage is a better choice than renting--with the huge caveat that you should only buy when you have a down payment saved up and should only buy a house that's well with in (and ideally well under) your means. As long as avoiding the hassles of renting--neighbors (if it's not a stand alone house), land lords etc.
And it's certainly better debt in that case than running up a credit card debt for crap you don't need etc. Mortgages can 100% be bad debut. But a mortgage within/below your means for a place you tend to live long term is a good choice vs. renting as you'll be able to have the money in pocket years down the road when you move. Vs. having nothing to show for it. Especially if you can pay less in mortgage than you would in rent (to offset interest).
But I agree with you 100% that you shouldn't buy until you have a sizable downpayment saved up, and will be able to pay off the mortgage early. I don't plan on buying until I get my student loans paid off. And with the nomadic nature of an academic career I want to wait until I have tenure somewhere and I'm sure I want to stay at that University long-term etc.
[quote name='fatherofcaitlyn']When somebody gets sick and loses their job, I think it is important that the person stops spending any money.
He or she and their family should move directly into a cardboard box and hand over all worldly possessions to creditors.[/QUOTE]
Like I said, emergencies happen and force people into debt. That's a very different situations from the single person who racks up credit card debt buying electronics, designer clothes, fine dining etc.
Though people who aren't financially independent and have families to support should get disability insurance. It's usually around $10 a month and will give the peace of mind of having a safety net if you become ill or injured and can't work for a long stretch. So even some of the emergency debts can be avoided if people plan ahead. Getting a financial adviser is a huge help there as then you can at least be aware of all the options out there.
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speedracer
Banned
[quote name='mykevermin']$120K? I shoulda gone to law school.[/QUOTE]
Above what she made before. I looked at all potential avenues for investment, carefully prescreened applicants, and took out a loan for a capital improvement project. She's done this lowly business school grad city worker proud.
The reality of her experience with litigation is what is the impetus for my opinions. Businesses pay lawyers the ungodly sum they do because lawyers can alternately invalidate or satisfy a contract. That's all they do. Nothing more. The business looks at it only in those terms and decides what makes them more money.
Individuals should do the same thing. This whole capitalism thing rests on drinking someone else's milkshake.
Above what she made before. I looked at all potential avenues for investment, carefully prescreened applicants, and took out a loan for a capital improvement project. She's done this lowly business school grad city worker proud.
The reality of her experience with litigation is what is the impetus for my opinions. Businesses pay lawyers the ungodly sum they do because lawyers can alternately invalidate or satisfy a contract. That's all they do. Nothing more. The business looks at it only in those terms and decides what makes them more money.
Individuals should do the same thing. This whole capitalism thing rests on drinking someone else's milkshake.
[quote name='speedracer']People flinch when they think of spending $12k yearly on an apartment. It's wasted money! So they get a house note and drop a quarter mil in interest over 30 years. Finance fail.[/QUOTE]
I don't understand this. 6 years ago my wife and I were paying $1,500 in rent per month to live in a run down one bedroom apartment with no A/C and an upstairs neighbor I couldn't stand. After I graduated from law school we bought our first house for roughly $500k (so instead of throwing the money out the window on rent we are investing in our future... I think). After 6 years and no renovations our house was recently appraised at roughly $650k.
Assuming we sell the house (which we are thinking about because 1,250 sqft. and one bathroom isn't quite big enough for our growing family of 4) we will make roughly $150k over 6 years to roll into another mortgage. If we buy another $500k house we will have just over $200k to make a down payment leaving us with under $300k of debt (since we have paid off over $50k in principal so far). This would drastically reduce our monthly mortgage payments and in theory we could do this 2 more times and own our house in 10 years. How is this not "good debt" or bad finance? I don't get it (I'm admittedly slow in this area).
I don't understand this. 6 years ago my wife and I were paying $1,500 in rent per month to live in a run down one bedroom apartment with no A/C and an upstairs neighbor I couldn't stand. After I graduated from law school we bought our first house for roughly $500k (so instead of throwing the money out the window on rent we are investing in our future... I think). After 6 years and no renovations our house was recently appraised at roughly $650k.
Assuming we sell the house (which we are thinking about because 1,250 sqft. and one bathroom isn't quite big enough for our growing family of 4) we will make roughly $150k over 6 years to roll into another mortgage. If we buy another $500k house we will have just over $200k to make a down payment leaving us with under $300k of debt (since we have paid off over $50k in principal so far). This would drastically reduce our monthly mortgage payments and in theory we could do this 2 more times and own our house in 10 years. How is this not "good debt" or bad finance? I don't get it (I'm admittedly slow in this area).
speedracer
Banned
[quote name='javeryh']I don't understand this. 6 years ago my wife and I were paying $1,500 in rent per month to live in a run down one bedroom apartment with no A/C and an upstairs neighbor I couldn't stand. After I graduated from law school we bought our first house for roughly $500k (so instead of throwing the money out the window on rent we are investing in our future... I think). After 6 years and no renovations our house was recently appraised at roughly $650k.
Assuming we sell the house (which we are thinking about because 1,250 sqft. and one bathroom isn't quite big enough for our growing family of 4) we will make roughly $150k over 6 years to roll into another mortgage. If we buy another $500k house we will have just over $200k to make a down payment leaving us with under $300k of debt (since we have paid off over $50k in principal so far). This would drastically reduce our monthly mortgage payments and in theory we could do this 2 more times and own our house in 10 years. How is this not "good debt" or bad finance? I don't get it (I'm admittedly slow in this area).[/QUOTE]
Your story is amazingly atypical. Since we're talking about a 1200 sq ft house for $650k, we're talking about something in either a top 5 city or DC (just went back and saw we're talking about NJ). The rest of the housing market doesn't move that way. If you were in Akron, OH or Riverside, CA or San Antonio, TX, you'd be so upside down you'd probably wanna walk away.
Also, you're probably in the top 10% of the country in earnings per year due to your employment and location.
The problem would be the first time your house went upside down. I think the market overall is off 15 or 20%, and some localities are off some ridiculous number like 30-45%. Even 20% off a half mil house is $100k under water. In a hard hit area you'd be looking at more like $200k. That's a gigantic, unrealistic number to expect to come back from for a family making $55k a year.
Gaining 20% on your house value and making top 10% money means never really worrying about it. Hell, either one means not really worrying about it. Even so, if you read Above The Law, you know even then that job security is relative.
Assuming we sell the house (which we are thinking about because 1,250 sqft. and one bathroom isn't quite big enough for our growing family of 4) we will make roughly $150k over 6 years to roll into another mortgage. If we buy another $500k house we will have just over $200k to make a down payment leaving us with under $300k of debt (since we have paid off over $50k in principal so far). This would drastically reduce our monthly mortgage payments and in theory we could do this 2 more times and own our house in 10 years. How is this not "good debt" or bad finance? I don't get it (I'm admittedly slow in this area).[/QUOTE]
Your story is amazingly atypical. Since we're talking about a 1200 sq ft house for $650k, we're talking about something in either a top 5 city or DC (just went back and saw we're talking about NJ). The rest of the housing market doesn't move that way. If you were in Akron, OH or Riverside, CA or San Antonio, TX, you'd be so upside down you'd probably wanna walk away.
Also, you're probably in the top 10% of the country in earnings per year due to your employment and location.
The problem would be the first time your house went upside down. I think the market overall is off 15 or 20%, and some localities are off some ridiculous number like 30-45%. Even 20% off a half mil house is $100k under water. In a hard hit area you'd be looking at more like $200k. That's a gigantic, unrealistic number to expect to come back from for a family making $55k a year.
Gaining 20% on your house value and making top 10% money means never really worrying about it. Hell, either one means not really worrying about it. Even so, if you read Above The Law, you know even then that job security is relative.
Yep, location matters a lot if you're wanting to buy a starter house, hope it appreciates and sell it and put the profit toward a more permanent house.
If you've saved up and are ready to settled down into a house long term, then it's less of an issue. Being upside down doesn't really matter as long as you're payments are very manageable and you're not looking to sell for decades if ever. The market will bounce back in the long-term, and any case when it's paid off you can sell it and put all the money toward a new place.
It's much better to own than rent once you're settled down and plan on totally paying off that house and living their all the rest of your working days and maybe beyond on pretty much every front. No neighbors, landlords etc. to deal with, and you'll eventually own the place and have something you can sell vs. just throwing away money in rent. Of course again you need to have a big down payment saved up and income to pay off the loan early for it to be a good decision to buy a place.
But otherwise, yeah, have to be very careful about buying early before your settled down and hoping to make a profit and get into a bigger place in a few years As that's very dependent on location and the volatile housing market over the short term.
If you've saved up and are ready to settled down into a house long term, then it's less of an issue. Being upside down doesn't really matter as long as you're payments are very manageable and you're not looking to sell for decades if ever. The market will bounce back in the long-term, and any case when it's paid off you can sell it and put all the money toward a new place.
It's much better to own than rent once you're settled down and plan on totally paying off that house and living their all the rest of your working days and maybe beyond on pretty much every front. No neighbors, landlords etc. to deal with, and you'll eventually own the place and have something you can sell vs. just throwing away money in rent. Of course again you need to have a big down payment saved up and income to pay off the loan early for it to be a good decision to buy a place.
But otherwise, yeah, have to be very careful about buying early before your settled down and hoping to make a profit and get into a bigger place in a few years As that's very dependent on location and the volatile housing market over the short term.
mykevermin
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http://www.nypost.com/p/news/local/...ple_makes_tight_studio_R15ToNFTaJE3c17zkw4efP
Own property in Manhattan for $150K!
Own property in Manhattan for $150K!
[quote name='mykevermin']http://www.nypost.com/p/news/local/...ple_makes_tight_studio_R15ToNFTaJE3c17zkw4efP
Own property in Manhattan for $150K![/QUOTE]
That's just insane! I could never live that way, but I guess I can see it for someone who's constantly on the go, wants to eat out every meal etc.
Own property in Manhattan for $150K![/QUOTE]
That's just insane! I could never live that way, but I guess I can see it for someone who's constantly on the go, wants to eat out every meal etc.
mykevermin
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they're innovative, that's for sure. I couldn't rock that lifestyle. But I admire their moxie.
EDIT: I also could never live that way, because I hate cats.
EDIT: I also could never live that way, because I hate cats.
I love cats, mine is sleeping beside me on the couch while I've been working from home all day. I like dogs too, but can't deal with the hassle of having to walk them.
I definitely give them big props for finding a way to score a place for that price in Manhattan, which seems to work for their lifestyle of being on the go and just needing a place to sleep.
Only big draw back even for them seems to be the lack of storage for clothes and having to keep clothes at the dry cleaners to grab on the way to work etc. If it was just a tad bigger to allow a small closet or wardrobe that would make it much more manageable.
At least for one person, would be damn hard to do it with a significant other--I got to have some personal space/alone time at home.
I like dogs too, but can't deal with the hassle of having to walk them.I definitely give them big props for finding a way to score a place for that price in Manhattan, which seems to work for their lifestyle of being on the go and just needing a place to sleep.
Only big draw back even for them seems to be the lack of storage for clothes and having to keep clothes at the dry cleaners to grab on the way to work etc. If it was just a tad bigger to allow a small closet or wardrobe that would make it much more manageable.
At least for one person, would be damn hard to do it with a significant other--I got to have some personal space/alone time at home.
soulvengeance
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[quote name='dmaul1114']I love cats, mine is sleeping beside me on the couch while I've been working from home all day. I like dogs too, but can't deal with the hassle of having to walk them.
I definitely give them big props for finding a way to score a place for that price in Manhattan, which seems to work for their lifestyle of being on the go and just needing a place to sleep.
Only big draw back even for them seems to be the lack of storage for clothes and having to keep clothes at the dry cleaners to grab on the way to work etc. If it was just a tad bigger to allow a small closet or wardrobe that would make it much more manageable.
At least for one person, would be damn hard to do it with a significant other--I got to have some personal space/alone time at home.[/QUOTE]
I think being that close to the cat box is probably the worst thing actually.
I like dogs too, but can't deal with the hassle of having to walk them.I definitely give them big props for finding a way to score a place for that price in Manhattan, which seems to work for their lifestyle of being on the go and just needing a place to sleep.
Only big draw back even for them seems to be the lack of storage for clothes and having to keep clothes at the dry cleaners to grab on the way to work etc. If it was just a tad bigger to allow a small closet or wardrobe that would make it much more manageable.
At least for one person, would be damn hard to do it with a significant other--I got to have some personal space/alone time at home.[/QUOTE]
I think being that close to the cat box is probably the worst thing actually.
[quote name='docvinh']I think being that close to the cat box is probably the worst thing actually.[/QUOTE]
Not really, would just have to be more active in scooping it out and changing the litter more often so it doesn't get smelly--which is something you need to do even in a normal sized one bedroom or studio apartment.
So that's less of an issue in my eyes than the lack of space for clothes (or other items period), lack of a kitchen for cooking at home, and just being crammed in such a small place with another person.
Not really, would just have to be more active in scooping it out and changing the litter more often so it doesn't get smelly--which is something you need to do even in a normal sized one bedroom or studio apartment.
So that's less of an issue in my eyes than the lack of space for clothes (or other items period), lack of a kitchen for cooking at home, and just being crammed in such a small place with another person.
mykevermin
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[hillbilly]if you ain't got a fridge you can fit a 24-pack o cold beer in, you ain't got a home[/hillbilly]
[quote name='fatherofcaitlyn']Neither. They "loaned" you money. They can take you to civil court. If you stole money out of their purses, then we can take about criminal charges.[/QUOTE]
I think it all depends on how I represent myself. At some point, we could be looking at charges of fraud, I would assume. I mean, Bernie Madoff did take people's money and invest it, just like he said he would and like they agreed to - but his intent was still fraudulent. If I convince 100 old ladies that I have two starving children at home and I just need the $100 to get me through until I get paid next week with A) No starving children and B) No intentions of ever paying them back, I'm pretty sure I could end up looking at ail time.
Likewise, if I take out a bunch of credit card debt with either little to no intentions of repaying it, there should be some legal issues there.
[quote name='javeryh']Not really. I have no debt in my life except for one car (2 years to go) and my house (30 years to go) and I owe $400,000+ to the bank. I need to hit the lottery.[/QUOTE]
Sorry - should have specified, I meant $100,000 in credit card debt.
[quote name='JolietJake']I think people see irresponsible banks being bailed out and decide they should be too.[/QUOTE]
Agreed. And this never should have happened.
[quote name='mykevermin']Part of larceny involves the act of taking - since loans are given, it can not legally be larceny.[/quote]
Borrowing without paying back isn't taking?
Hey, myke, can I "borrow" your car?
[quote name='mykevermin']I can only imagine how much your income must be to acquire $100,000 worth of credit in the form of credit cards. That seems more impossible to accomplish than unlikely.[/QUOTE]
I work at Walmart and my wife works for a local small business owner (irony?). If I gathered up all my credit cards and went on a wild spending spree one night, I could probably rack up that much with what I currently have (assuming the cards didn't get holds put on any of them that calling the credit card company wouldn't take care of). I've often said that the only thing I could do with my credit limits is get myself in big-ass trouble.
[quote name='speedracer']Fair enough. I just think if it is the correct business decision to walk away from a contract, it's a no brainer. Every business entity on the planet iterates this decision every day and I just don't think individuals should be different.[/QUOTE]
Agreed. So long as both parties agree to the terms. Otherwise, a business could hire you, work you for two weeks, then decide to terminate your employment without paying you. Likewise, you shouldn't be allowed to run up a credit card debt, then decide to "walk away" without any attempt at paying it.
I think it all depends on how I represent myself. At some point, we could be looking at charges of fraud, I would assume. I mean, Bernie Madoff did take people's money and invest it, just like he said he would and like they agreed to - but his intent was still fraudulent. If I convince 100 old ladies that I have two starving children at home and I just need the $100 to get me through until I get paid next week with A) No starving children and B) No intentions of ever paying them back, I'm pretty sure I could end up looking at ail time.
Likewise, if I take out a bunch of credit card debt with either little to no intentions of repaying it, there should be some legal issues there.
[quote name='javeryh']Not really. I have no debt in my life except for one car (2 years to go) and my house (30 years to go) and I owe $400,000+ to the bank. I need to hit the lottery.[/QUOTE]
Sorry - should have specified, I meant $100,000 in credit card debt.
[quote name='JolietJake']I think people see irresponsible banks being bailed out and decide they should be too.[/QUOTE]
Agreed. And this never should have happened.
[quote name='mykevermin']Part of larceny involves the act of taking - since loans are given, it can not legally be larceny.[/quote]
Borrowing without paying back isn't taking?
Hey, myke, can I "borrow" your car?
I think you're confused as to what a metaphor is. Stop paying taxes for a couple of years, then get back to me.
I don't play the lotto, but this *could* be fun.Wanna start a cag lotto pool, javery?
[quote name='mykevermin']I can only imagine how much your income must be to acquire $100,000 worth of credit in the form of credit cards. That seems more impossible to accomplish than unlikely.[/QUOTE]
I work at Walmart and my wife works for a local small business owner (irony?). If I gathered up all my credit cards and went on a wild spending spree one night, I could probably rack up that much with what I currently have (assuming the cards didn't get holds put on any of them that calling the credit card company wouldn't take care of). I've often said that the only thing I could do with my credit limits is get myself in big-ass trouble.
[quote name='speedracer']Fair enough. I just think if it is the correct business decision to walk away from a contract, it's a no brainer. Every business entity on the planet iterates this decision every day and I just don't think individuals should be different.[/QUOTE]
Agreed. So long as both parties agree to the terms. Otherwise, a business could hire you, work you for two weeks, then decide to terminate your employment without paying you. Likewise, you shouldn't be allowed to run up a credit card debt, then decide to "walk away" without any attempt at paying it.
speedracer
Banned
[quote name='UncleBob']Otherwise, a business could hire you, work you for two weeks, then decide to terminate your employment without paying you. Likewise, you shouldn't be allowed to run up a credit card debt, then decide to "walk away" without any attempt at paying it.[/QUOTE]
Both of those things happen every day in this country without retribution.
Both of those things happen every day in this country without retribution.
JolietJake
Banned
[quote name='mykevermin']
EDIT: I also could never live that way, because I hate cats.[/QUOTE]
....you're dead to me Myke.
EDIT: I also could never live that way, because I hate cats.
[/QUOTE]....you're dead to me Myke.
[quote name='dmaul1114']The first doesn't. They can decide to fire someone after two weeks in many cases. But they have to pay the person for the work they did during those two weeks.[/QUOTE]
I won't say it *never* happens, but I'd say it's pretty rare - and when it does, a simple call to one's state Department of Labor should correct it...
I won't say it *never* happens, but I'd say it's pretty rare - and when it does, a simple call to one's state Department of Labor should correct it...
Trancendental
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[quote name='UncleBob']I won't say it *never* happens, but I'd say it's pretty rare - and when it does, a simple call to one's state Department of Labor should correct it...[/QUOTE]
New enterprises (particularly tech startups) can work people for months without a paycheck before going belly up. Workers who were hoping their loyalty to a fledgling tech company would pay off are left high and dry, many without even the salary checks they were promised were coming week after week.
And then there are all the pensions that are raided for years, and then when all is said and done the contracts are ripped up (for workers not execs, of course)
However way you slice it, every day workers are denied compensation they were supposedly guaranteed in contracts, and they are effectively powerless to dispute it. Only when we talk about executive compensation do we become "a nation of laws"
New enterprises (particularly tech startups) can work people for months without a paycheck before going belly up. Workers who were hoping their loyalty to a fledgling tech company would pay off are left high and dry, many without even the salary checks they were promised were coming week after week.
And then there are all the pensions that are raided for years, and then when all is said and done the contracts are ripped up (for workers not execs, of course)
However way you slice it, every day workers are denied compensation they were supposedly guaranteed in contracts, and they are effectively powerless to dispute it. Only when we talk about executive compensation do we become "a nation of laws"
speedracer
Banned
[quote name='dmaul1114']The first doesn't. They can decide to fire someone after two weeks in many cases. But they have to pay the person for the work they did during those two weeks.[/QUOTE]
I read it wrong. I read they terminated an employment contract that had a length and fired early. Prolly cause that happened to me.
To continue that off topic renting vs. mortgage thing, Get Rich Slowly just posted an article asking the same question. Great read.
I read it wrong. I read they terminated an employment contract that had a length and fired early. Prolly cause that happened to me.
To continue that off topic renting vs. mortgage thing, Get Rich Slowly just posted an article asking the same question. Great read.
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Yeah, I'd agree with that short article.
As I said before people shouldn't really go into buying a house expecting to make a profit--especially in the short term.
You go into it when have a big downpayment, and you buy below your means for other reasons than profit. You do it to get away from shared walls and ceilings/floors in apartments. To get away from landlords in rented houses. To get the ability to fix up the place however you like etc.
And you do it when you're going to be somewhere longterm, as then when you are ready to move you'll have the money you saved up over the years PLUS whatever you can sell your house for. Vs. renting long-term and ONLY having whatever money you saved. And if you do it right you'll have mortgage paid of many years before you plan on moving, so you'll also be able to save up more than you would if you were paying rent the whole time. So in the long-term you'll almost always be better off owning vs. renting if you do it right.
Short-term? Not so much as it's a huge gamble.
Ttoo many people buy houses too soon, before they have enough money saved up, before they're settled down and know they'll be in a location long-term, before they know what size house they'll need for their family etc. And that's a bad decision most of the time, unless your in a place with a very good housing market and lucky enough to not have a bubble burst between the time you buy and time you want to sell.
As I said before people shouldn't really go into buying a house expecting to make a profit--especially in the short term.
You go into it when have a big downpayment, and you buy below your means for other reasons than profit. You do it to get away from shared walls and ceilings/floors in apartments. To get away from landlords in rented houses. To get the ability to fix up the place however you like etc.
And you do it when you're going to be somewhere longterm, as then when you are ready to move you'll have the money you saved up over the years PLUS whatever you can sell your house for. Vs. renting long-term and ONLY having whatever money you saved. And if you do it right you'll have mortgage paid of many years before you plan on moving, so you'll also be able to save up more than you would if you were paying rent the whole time. So in the long-term you'll almost always be better off owning vs. renting if you do it right.
Short-term? Not so much as it's a huge gamble.
Ttoo many people buy houses too soon, before they have enough money saved up, before they're settled down and know they'll be in a location long-term, before they know what size house they'll need for their family etc. And that's a bad decision most of the time, unless your in a place with a very good housing market and lucky enough to not have a bubble burst between the time you buy and time you want to sell.
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fatherofcaitlyn
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I like this calculator.
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1
You only have to know what everything costs and how the market is moving. If I knew those sorts of things, I would be in real estate instead of tech support.
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1
You only have to know what everything costs and how the market is moving. If I knew those sorts of things, I would be in real estate instead of tech support.
Only problem I see with that calculator is that it seem to only show when buying is better than renting based on annual savings.
The fact of the matter is 20-30 years down the road you're better off having a paid off house that you can sell if you want to move, than you are having rented for the 20-30 years and having nothing to sell and bring in capital when you want to move.
So you lose the benefit of getting to a point where you no longer have to pay rent or mortgage, unless you can manage to save up enough to buy a home outright after renting long-term. But most people don't make enough money (nor manage their money well enough) to be able to save up that much cash. Especially not if they want to remain in a metropolitan area. One could probably do it if they wanted to by a cheap house in the middle of nowhere in a flyover state.
But in any case, I'm the wrong person to ask about this kind of stuff. Given I did 11 years of college and grad school to take an academic job, I'm cleary not very motivated by making as much money as possible! As long as I can pay my bills, have a rainy day fund etc. I'm fine. I don't care about retiring early etc. It's not like my job is backbreaking or anything, but rather is something I enjoy.
So I'll definitely buy a home once I'm ready to settle down and have a nice down payment saved up etc.
The fact of the matter is 20-30 years down the road you're better off having a paid off house that you can sell if you want to move, than you are having rented for the 20-30 years and having nothing to sell and bring in capital when you want to move.
So you lose the benefit of getting to a point where you no longer have to pay rent or mortgage, unless you can manage to save up enough to buy a home outright after renting long-term. But most people don't make enough money (nor manage their money well enough) to be able to save up that much cash. Especially not if they want to remain in a metropolitan area. One could probably do it if they wanted to by a cheap house in the middle of nowhere in a flyover state.
But in any case, I'm the wrong person to ask about this kind of stuff. Given I did 11 years of college and grad school to take an academic job, I'm cleary not very motivated by making as much money as possible! As long as I can pay my bills, have a rainy day fund etc. I'm fine. I don't care about retiring early etc. It's not like my job is backbreaking or anything, but rather is something I enjoy.
So I'll definitely buy a home once I'm ready to settle down and have a nice down payment saved up etc.
bread's done