[eluded]

Rates below 3% for first time ever.

[AlpineWhite_SJ]

Originally Posted by c1pher

Right, ownership benefit is more of a psychological thing than it is a financial thing. Once you look at it on a spreadsheet, you quickly figure out what’s what. Being able to have consistent living expenses helps when you are trying to put money in savings. If you have house repairs or other bills that come up, it can cause you to reduce or eliminate savings, thereby reducing that final number you have at retirement.

I’m not saying don’t own a home, but if you’re young and trying to bank for retirement, it’s important to really look at the market you live in and determine which path is more cost effective.

With COVID, companies are now relooking at remote work and this does change the dynamic for many professionals who have been transitioned to changing jobs and locations every so many years, requiring relocation. So if remote work takes hold, it’s possible to stay in a home even if you’re changing jobs.

You should definitely look at it in a spreadsheet or have someone like a financial professional look at it for you. If you can’t afford to do repairs/maintenance without eating into savings rate, it’s probably more than you can afford.

[Hawkeye]

Originally Posted by zx10guy

Another reason why I would love to relocate there along with no sales tax on retail purchases to include no taxes on food when eating out. Buying and registering a car is also much cheaper.

That stuff is cheap here. My BMW, cause it is older, costs $51 a year to register and the special license plate is an additional $5 a year.

[W///]

Currently live in Upstate South Carolina, and houses are cheap compared to the big cities. For almost 10 years, I rented an apartment because my job and green card situation was still up in the air, so I wanted to be mobile as possible.

Once that was done, I decided to purchase a house, because my rent was $1100 for a 2 bedroom apt with 2 car garage is not that much different than my current $1400 mortgage. The plan was to grow roots and making this place my home base for decades to come.

My current house ranch style built in the 70s. It's 3 bedrooms, 3 bathrooms, 2050 sq ft on 0.8 acres of land, which is more than I'll ever need considering I'm in my mid 30s and single. What's amazing about the house is the previous owner is retired and built a 4 bay detached garage (no power though) for his wood working hobby. I love being able to have space to work on my cars and a spot for all of them.

Lessons learned so far:
- While there's a gap of only $300 a month, there are other expenses of course that push that gap to a quite a bit more than I expected. Nothing insane, but still worth noting (ie heating and cooling 2050 vs 1100 sq ft)
- Yard work takes a long time, and sucks during South Carolina heat
- Luckily no big repairs yet, but I know it's an older house and that's always in the back of your mind
- Rightly or wrongly, I don't look at the house as an investment. This is a place where I belong, having moved around a lot most of my childhood life. So I didn't plan it to buy it to sell it in 8 years to move to a bigger house. I think it has everything I need to be here for years to come
- It takes me forever to start and finish a project (same with my cars actually). For example, if I start painting a room, it'll take me a few weeks because I only feel like working on it during weekends. And that's ok.

Do I have any regrets with the move? Not at all. I love the privacy I have, my dogs are much happier since we went went from an apartment on the 3rd floor to a house with a big back yard and the garage situation is pretty damn amazing. While I completely get the flexibility of renting and moving around, for me, it was the exact opposite for me.

[PoorLurker]

Originally Posted by W///

Lessons learned so far:
- While there's a gap of only $300 a month, there are other expenses of course that push that gap to a quite a bit more than I expected. Nothing insane, but still worth noting (ie heating and cooling 2050 vs 1100 sq ft)
- Yard work takes a long time, and sucks during South Carolina heat
- Luckily no big repairs yet, but I know it's an older house and that's always in the back of your mind
- Rightly or wrongly, I don't look at the house as an investment. This is a place where I belong, having moved around a lot most of my childhood life. So I didn't plan it to buy it to sell it in 8 years to move to a bigger house. I think it has everything I need to be here for years to come
- It takes me forever to start and finish a project (same with my cars actually). For example, if I start painting a room, it'll take me a few weeks because I only feel like working on it during weekends. And that's ok.

Do I have any regrets with the move? Not at all. I love the privacy I have, my dogs are much happier since we went went from an apartment on the 3rd floor to a house with a big back yard and the garage situation is pretty damn amazing. While I completely get the flexibility of renting and moving around, for me, it was the exact opposite for me.

I like your list of things learned.

AC goes out? There's $15k. Need a new roof? $20-30k. Want to remodel it to something other than the home equivalent of a mullet and jean shorts? There's $150k.

Have I gotten to $200k yet? Oh maybe if you want to actually have hardscaping, haha.

People need different things in life. Some people like the freedom of movement and don't need space so a studio payment with a nice car satisfies them.

Some people want a yard and space.

As much as I want to be an outdoor kitchen kind of guy, I don't ever care to sit outside and eat.

I think I need more money so I can get a studio in a nice area and live their when my personality flips to that "downsize" life.

Seems like day by day I want something different.

[Humdizzle]

own free and clear. same with my cars. i live in the Midwest though so my home costs as much as some of your guy's down payments lol. $220k for 3000sq feet and 2 car carage. live at the end of a nice cul-de-sac. neighbor is a professor at the university. 5 minute drive to a major interstate, roughly the same amount of time to get to some nice back roads. maintenance isn't bad. i pay some kid $25 to mow my lawn every few weeks.

gf and i will probably build a smaller house sometime in the future with a 3-4 car garage as we don't plan to have kids and half of our current house (basement) is pretty much unused.

[Conissah]

Originally Posted by W///

Currently live in Upstate South Carolina, and houses are cheap compared to the big cities. For almost 10 years, I rented an apartment because my job and green card situation was still up in the air, so I wanted to be mobile as possible.

Once that was done, I decided to purchase a house, because my rent was $1100 for a 2 bedroom apt with 2 car garage is not that much different than my current $1400 mortgage. The plan was to grow roots and making this place my home base for decades to come.

Lessons learned so far:
- While there's a gap of only $300 a month, there are other expenses of course that push that gap to a quite a bit more than I expected. Nothing insane, but still worth noting (ie heating and cooling 2050 vs 1100 sq ft)
- Yard work takes a long time, and sucks during South Carolina heat
- Luckily no big repairs yet, but I know it's an older house and that's always in the back of your mind
- Rightly or wrongly, I don't look at the house as an investment. This is a place where I belong, having moved around a lot most of my childhood life. So I didn't plan it to buy it to sell it in 8 years to move to a bigger house. I think it has everything I need to be here for years to come
- It takes me forever to start and finish a project (same with my cars actually). For example, if I start painting a room, it'll take me a few weeks because I only feel like working on it during weekends.

Similar thing for me. Been renting apartments for 5 years, so not quite as long as you. I lived in and around Charlotte, but my last place was $1200 a month for a 1000 sq ft 1bd 1bth apartment with a garage. My house is brand new (so no worries from me on roof and all that, and no grass so I don't have to mow lol), on 0.6 acres, 1 mile from the lake, 1800 sq ft with a 500 sq ft garage (3bd 2 bth), and without PMI I'm looking at $1120 a month. Well water and septic, so no charges on that for me. Power is a bit higher than the small apartment, but nothing crazy. I would LOVE to have a shop, but for now it's fine for the wife and I.

I can let my dog run around in the yard no leash, I have my own grille, I can listen to music or movies as loud as I want, I can work on my cars in the garage without disturbing other people, it's amazing. I've been having a blast painting rooms, hanging up shelves, making it our own place. Absolutely love it. ONLY negative to the house is that we live on a road that is busier than we thought. Not a MAJOR road, but it gets quite busy. It's quiet after dinner time though, and doesn't start getting traffic on it until around 8am, so we can easily live with it.

[Hawkeye]

Originally Posted by Humdizzle

own free and clear. same with my cars. i live in the Midwest though so my home costs as much as some of your guy's down payments lol. $220k for 3000sq feet and 2 car carage. live at the end of a nice cul-de-sac. neighbor is a professor at the university. 5 minute drive to a major interstate, roughly the same amount of time to get to some nice back roads. maintenance isn't bad. i pay some kid $25 to mow my lawn every few weeks.

gf and i will probably build a smaller house sometime in the future with a 3-4 car garage as we don't plan to have kids and half of our current house (basement) is pretty much unused.

You just described me pretty well. Just moved to the larger house (not smaller) with a larger garage and have a wife so I just have a few years on you

We have a lot of family that visits and we like to throw a lot of parties so we went for a larger house with good entertainment spaces... and 5 bedrooms for the relatively frequent guests.

[SSW]

Originally Posted by PoorLurker

Bad thing about moving up is the increased cost of property taxes. Even if you carry equity from one home to another, you are still faced with a large increase in property taxes.

FWIW, in CA, under certain circumstances, a person over 55 can transfer the property value assessment of one property to another under Prop 60 w/o accuring a higher property tax liability.

I used this provision to keep my mother's property tax down when she had to sell her 1/2 interest in a very expensive property that she bought in 1948 and then bought a less expensive (but with a still higher assessed value) in North Beach in the 90's.

The new property has to be worth less than the old one and the transfer generally can occur only w/in the same county (with certain exceptions) but, if you qualify, it can save you a heap of $ in property taxes.

[SSW]

Originally Posted by eluded

Rates below 3% for first time ever.

Even refi rates are dropping below 3% APR and I'm looking into doing it (as many others are) right now.

[c1pher]

I was fortunate enough to get 3.25% back in 2010 so no real incentive to refi for me.

[zx10guy]

Originally Posted by c1pher

I was fortunate enough to get 3.25% back in 2010 so no real incentive to refi for me.

My vacation home is at that rate. Got it in 2012. So same situation.

My primary home is 3.75% and refi'd in 2012. This one is tougher. Don't know if it makes sense for me to refi even at the current low rates. I've been paying in for 8 years. For me to reset the clock and add in closing costs plus resetting the clock with front loaded interest, not sure if it makes sense.

[PoorLurker]

Originally Posted by zx10guy

My vacation home is at that rate. Got it in 2012. So same situation.

My primary home is 3.75% and refi'd in 2012. This one is tougher. Don't know if it makes sense for me to refi even at the current low rates. I've been paying in for 8 years. For me to reset the clock and add in closing costs plus resetting the clock with front loaded interest, not sure if it makes sense.

Similar position. Not close enough to want to do a 15 year but don't want to reset to a 30yr.

My loan guy signed me up to this site that sends me monthly emails tracking my home value, equity, rates, and other stuff. It has nice calculators built in to play with "what if"

Last time I looked it didn't make too much sense. However, locking in a 30yr at a near 1% lower while paying that same amount or a few bucks more to get it back to "23" years might be a good idea. Having the freedom to pay less when you want to go from base model car to top of the end model and need a few hundred extra :wink: YMMV - being in CA it's easy to quickly become house poor!

[c1pher]

Originally Posted by Thadi

Renting is a waste of money but I don't have a choice for now.

When you consider that you have to pay no matter where you live, it’s not a waste. Like I said earlier, if you remove the emotional/psychological components, it becomes more of a math problem to solve to determine if buying or renting is more cost effective.

[chassis]

Originally Posted by NorCalAthlete

As I shop for a house I'm meeting more and more people who swear they'll never buy a house because their investments pull more than a house would appreciate, or because it's just too much of a hassle, whatever.

I'm pretty set on having an asset I can rent out if need be, that is highly likely to appreciate by a 6-figure amount, in a desirable area, so I can have my own garage for my car and do what I want with the place without worrying about losing a deposit or whatever.

How about the rest of you? Do you own? Rent? Rent for now but plan to own when able?

NorCalAthlete NorCal real estate is a distorted cartoon, because of its high price appreciation. compared with the rest of the United States.

Most places in the US do not see price appreciation that beats an actively managed equity portfolio, or even a passively managed one, over any appreciable time period.

My conclusion after 25 years of home ownership is that the primary dwelling is an expense, not an investment. Whether one owns or rents, the end result remains - it's an expense. I have done dozens of analyses on this.

Owning a home often gives the owner a higher quality experience, generally for raising children. This can mean higher property taxes to pay for higher quality public schools, with higher income neighbors and more yard and living space. The benefit in this scenario is a higher quality experience, not a better net present value outcome.

I haven't met one person that is married and has children living full time with parents, who have flipped their primary dwelling multiple times in a manner to deliver a financial return that exceeds a passively managed equity portfolio.

Summary: real estate doesn't return what an equity portfolio can return. Northern California may be one of very few exceptions to this.

[AlpineWhite_SJ]

Originally Posted by chassis

NorCalAthlete NorCal real estate is a distorted cartoon, because of its high price appreciation. compared with the rest of the United States....

....Summary: real estate doesn't return what an equity portfolio can return. Northern California may be one of very few exceptions to this.

Very much so, which is why you’ve got to look at northern ca a bit differently and advice from other areas can only be applied selectively in this market. It also may not even beat an index here either, surprisingly. I checked and our last house was a 90% return but the S&P 500 returned 133% during the same time period.

However putting the money into the index fund wouldn’t have given me any utility that having a house did, tax benefits, etc. and it overlooks the fact that I would have still had to pay someone rent, reducing available income to invest on a continual basis.

Home ownership shouldn’t be primarily driven by a desire for, or expectation of, appreciation, it’s a nice by-product that you may get that you won’t get if renting.

[chassis]

Originally Posted by AlpineWhite_SJ

Very much so, which is why you’ve got to look at northern ca a bit differently and advice from other areas can only be applied selectively in this market. It also may not even beat an index here either, surprisingly. I checked and our last house was a 90% return but the S&P 500 returned 133% during the same time period.

However putting the money into the index fund wouldn’t have given me any utility that having a house did, tax benefits, etc. and it overlooks the fact that I would have still had to pay someone rent, reducing available income to invest on a continual basis.

Home ownership shouldn’t be primarily driven by a desire for, or expectation of, appreciation, it’s a nice by-product that you may get that you won’t get if renting.

AlpineWhite_SJ What is the total return of your house in the example above (price appreciation less property taxes, maintenance expense, HOA fees and capital improvements inclusive of any tax benefits), compared with total return of the S&P including dividend reinvestment?

[Carnut12]

I have only owned, I’m on house # 3, I also owned a condo so technically # 4. I should’ve bought a few years earlier. Moving house to house costs money, but you make it your own, can’t do that with a rental.

My current house is by far my favorite and I’ve been here the longest, 10 years now, I have a ton of equity I couldn’t imagine renting this entire time. I refinanced 3 years ago with a 15 year mortgage it’s nice seeing the principal go down every year. On a 30 year loan the first 5 years the principal barely moves.

[DriverDaily]

Originally Posted by BlackF82

Renting is a waist of money, buy a house. If your doing great financially, reduce to a 15yr loan. There is nothing that comes close to the feeling of owning a house, a feeling of pride and restfulness.

A house feels more like an anchor to me. I'd prefer not to be tied down to one city.

[AlpineWhite_SJ]

Originally Posted by chassis

AlpineWhite_SJ What is the total return of your house in the example above (price appreciation less property taxes, maintenance expense, HOA fees and capital improvements inclusive of any tax benefits), compared with total return of the S&P including dividend reinvestment?

Bought at 599k, sold at 1.15M. Put roughly 100k into it while owning it for capital improvements (roof, hvac and some foundation work). No tax benefits for the improvements, No HOA, and very little maintenance since I did a lot of it myself instead of hiring people, outside of big projects in the capital improvement area.

To clarify, my numbers were napkin math on the raw appreciation of the asset, since I think some think that the Bay Area real estate market is solid gold but fail to realize just how much a passive investment can appreciate. A more thoughtful analysis takes into account tax bracket, barrier to entry (ie 20% down), tax savings for deductions, tax outlay for property tax, how much you spend on maintenance, loan interest rate, insurance expense, and more. Also, our gain was under the taxable threshold so you’d also have to compare to long term gain on the index. All in, we made much more than the numbers I put up, so likely better than the same amount placed in an index. But it’s tough to communicate in simplistic terms to someone who doesn’t have the same variables.

[zx10guy]

Why was this moved to the sports subforum?

I can see maybe some viewing real estate as a blood sport though.....

[Hawkeye]

Why did this thread get moved to the sports lounge?