Topic: holy crap buying a house is stressful.

[evanphi]

Home purchasing under well regulated and managed lending practices is still a good financial model.

Credit union! Canada!

[Duke McDukiedook]

It helps to have a good mortgage broker.  We bought this house 5 years ago and yes, a little stressful, but painless in the end and worth it.

We just signed a contract for a small condo that we are buying as a rental property. Real estate is a great investment.

Houses are only a good investment if you can pay cash or finance very little and rent it out.
If you take out a 30 year mortgage and include maintenance, taxes, insurance, etc. it's a huge loss. If financing you'll pay three times the purchase price. Then factor in 30 years of inflation.

That being said, you've got to live somewhere. A good investment, no.

This X1000.
If you have a mortgage odds pretty good you have a #$%* investment on your hands.
People tend to forget all the hidden costs and time involved in maitaining a house.

You guys are delusional about home ownership [and not meant in an offending way]

So, you're going to rent the rest of your life? 
Do you know you can write off interest??

Most people who are not home owners simply cannot afford it.

Run the numbers, any money you think you are making off the sale of your house as profit gets sucked up by the interest you pay over the life of the loan and other incidentals IF YOU HAVE A MORTGAGE. Like Jeff said if you pay cash outright and get the right price money can be made.

I have a mortgage on my house and I am not fooling myself that it is a good investment; I figure it is better than paying rent to some one else though.

[evanphi]

I have a mortgage on my house and I am not fooling myself that it is a good investment; I figure it is better than paying rent to some one else though.

Well of course. Paying interest is not a good investment any time!

I think the "good investment" part of it, is that you get more back if you sell than you ever would if you rented for the same amount of time. If I spend 25 years in the place I am now compared to the house we are buying, yeah I would save $50,000 because of no interest payments on rent. BUT what happens when I want to sell vs. when I want to leave my rented place? I get more than $50,000 when I sell.

[Duanob]

Your primary house is not considered an asset. Your second investment or rental houses are. Why should I care about all that interest if someone else is paying the mortgage? I get to deduct it from my taxes.

On the subject of credit unions: BALLS OUT BABY!!! I told Bank of Amerika to go F themselves. They had us over a barrel in 2008 with high interest loans and no equity left in either of our properties. They said they could not help us. besides I've read plenty of horror stories about how the banks "helped" people, right into foreclosure. The credit union said no problem. All my refis and mortgages are with my creidt union. I am considering going to another credit union for checking accounts and credit cards as well. Screw the banks. 

I am still wating for one of these jack-holes to be put in prison for what they did to our country's economy.

[Bob Wessner]

I am still wating for one of these jack-holes to be put in prison for what they did to our country's economy.

One of my 2013 wishes has been fulfilled. Kwame Kilpatrick sentenced to prison. My remaining wish is that Jamie Dimon becomes his cellmate. 

[JeffSTL]

It helps to have a good mortgage broker.  We bought this house 5 years ago and yes, a little stressful, but painless in the end and worth it.

We just signed a contract for a small condo that we are buying as a rental property. Real estate is a great investment.

Houses are only a good investment if you can pay cash or finance very little and rent it out.
If you take out a 30 year mortgage and include maintenance, taxes, insurance, etc. it's a huge loss. If financing you'll pay three times the purchase price. Then factor in 30 years of inflation.

That being said, you've got to live somewhere. A good investment, no.

This X1000.
If you have a mortgage odds pretty good you have a #$%* investment on your hands.
People tend to forget all the hidden costs and time involved in maitaining a house.

You guys are delusional about home ownership [and not meant in an offending way]

So, you're going to rent the rest of your life? 
Do you know you can write off interest??

Most people who are not home owners simply cannot afford it.

Historically when adjusted for inflation the rate of return when considering all costs associated is about 1% on a primary residence...not a great investment. I'm not suggesting that renting is a better option. My approach is that I look at my house as my home and not an investment.

I own a home. Purchased a foreclosure in 2008. The people who were foreclosed on paid $160k for it and two years later I bought it from the bank for $120k. A small brick home built in 1948. I put a lot of work into it, but little money. I did everything myself. Refinished hardwood floors that were in terrible condition and had to totally rebuild the kitchen because it was gutted and much much more. Hopefully I'll come out ok in the deal someday, but I'm not counting on it.

Btw, this is my second house. The first one was lost in a "divorce." Was able to sell it for just a little more than I had paid for it, but lost every penny that I had put in it over the five years I had it. So about a $30k loss.

[Bob Wessner]

My approach is that I look at my house as my home and not an investment.

+1

[lone*X]

Whats really nice about home ownership is when you make that last payment and you get that clear deed of ownership in you hands.  It's been 14 years since I paid a house note and many more since I paid anyone else rent money.   Maintain it properly and it will last your lifetime.   Now if I could just do something about those dang property taxes and insurance cost.

[tomkimberly]

To the OP, congragts!

I'm on the other end of the spectrum, we are looking to retire and move to a less costly home. I know the stress is going to be huge but the rewards at the end will more than make up for this.

Tom

[MoMo]

To the OP, congragts!

I'm on the other end of the spectrum, we are looking to retire and move to a less costly home. I know the stress is going to be huge but the rewards at the end will more than make up for this.

Tom



I just did that Tom,  wound up debt-free and with considerably less taxes and insurance.  And an awesome shop!...Larry

[simon#42]

be thankful you all live in a large sparsely populated country and property prices are generally cheap . over here in small over populated britain house prices are very high indeed , add to that the government tax on house sales [ stamp duty ] it makes it very expensive to move . i am selling my house at the moment and the extra $80,000 the government want from any prospective new buyer in tax isn't exactly a good selling point .

[JeffSTL]

be thankful you all live in a large sparsely populated country and property prices are generally cheap . over here in small over populated britain house prices are very high indeed , add to that the government tax on house sales [ stamp duty ] it makes it very expensive to move . i am selling my house at the moment and the extra $80,000 the government want from any prospective new buyer in tax isn't exactly a good selling point .

Is this a one time tax upon purchase? Do you have to pay an annual tax? Here in St. Louis, Missouri I pay about $1600 a year (which seems to go up often) and this is considered to be fairly cheap.

[Bob Wessner]

Jeff, not bad compared to Ann Arbor taxes. And trust me, we have a very modesr house on a small lot. 

[JeffSTL]

Yep not too bad. It's pretty modest about 1000sqft and on 1/8 acre. If I were just up the street a few hundred yards I would be in the next town and my property tax would be about double. It's all relative I guess. They'll get it one way or another.

[simon#42]

its a one of purchase tax based upon the price of the house jeff , no annual property tax as yet .

[750K]

be thankful you all live in a large sparsely populated country and property prices are generally cheap . over here in small over populated britain house prices are very high indeed...

Unfortunately that doesn't apply to the whole of Canada, the east coast vs the west coast is a totally different ball game when looking at real estate prices. I'm in BC which has some of the highest housing prices in Canada, which is why I build a rental suite in our first house. We didn't over extend ourselves in the first place with our mortgage but having rental income really helps.

My house is my home, not just an investment. The future properties my wife and I buy will be investments, but you gotta live somewhere and I'd rather pay my own mortgage than someone else's when it comes down to it. Paying rent to someone else when you could afford to pay your own mortgage never made much sense to me.

[Bob Wessner]

What is it they say in real estate, "Location, location, location." We like living in Ann Arbor, but it is not the cheapest place. Both real estate and property taxes are pretty high. One of the issues here is the University of Michigan. As a state institution it is tax exempt. Therefore when they buy up property (which they do often to expand), that property is removed from the tax rolls. Guess who makes up the difference?  On the other hand, the university and the hospital are a major employer, and tuition isn't cheap so all those students spend some decent money around town. If there is one thing that could, someday, make us consider relocating, it would be the property taxes. 

[simon#42]

so is this tax just for owning a property or does it pay for your local services , bin collection , street lighting etc ?

[FunJimmy]

so is this tax just for owning a property or does it pay for your local services , bin collection , street lighting etc ?

Property taxes in BC are an annual cost based on a percentage of assessed property values and cover civic expenses, including schools, fire fighters, garbage collection, water, etc. likely the same as most jurisdictions.

[Goofaroo]

My approach is that I look at my house as my home and not an investment.

Yep.  You need a place to live and raise a family.  Even though you will pay a lot in interest you will still come out way ahead in the long run as opposed to renting.

My parents paid off their house in just a couple of years after buying it.  Later in life when I was out on my own I realized what a huge advantage they had not having a mortgage or rent payment.  From the time I bought my first house about 19 years ago I always did a 15 year mortgage and any extra money that I could spare went towards the principal. After living there for about four years I had a nice chunk of equity to apply to the mortgage on the new house. I lived there for almost 5 years paying more than the minimum payment on the new 15 year mortgage.  Then I applied that equity to my current house and a new 15 year mortgage. Back in March of this year, I paid off the mortgage 6 years early. The feeling of financial freedom that it has brought me has been priceless.  At age 49, I am now living almost as cheaply as when I was a kid renting an apartment with a room mate.  In the end, buying a house has been the best investment in myself and my family that I have ever made.  You will never regret buying a home as long as you see the purchase though to it's completion.

[Bob Wessner]

so is this tax just for owning a property or does it pay for your local services , bin collection , street lighting etc ?

Property taxes in BC are an annual cost based on a percentage of assessed property values and cover civic expenses, including schools, fire fighters, garbage collection, water, etc. likely the same as most jurisdictions.

Very similar here in A2 with the exception of water. We pay that separately, about $200+/- per quarter.

[simon#42]

ah in that case we do pay that tax as well , known as rates it is based upon the value of the house and varies in cost depending where you live [ the more efficient your local council the cheaper it is and vice versa ]
costs between $2000 and $4000 per annum depending on house size and area , like bob water is extra

[vames]

I bought a house in NJ -- 14 miles from NYC in a beautiful little town -- and financed it in late 2012 at 3 3/8%. With such a low rate I almost feel a disincentive to pay down principle too quickly because it's such cheap money. Our property taxes are high -- about 15K a year -- but city services and amenities are good and schools are great. The public schools in NYC suck and I'd pay more than 15K for private school for my kid in the city and feel like an elitist jerk for sending him to private school. I guess it's all how you look at relative situations. People in one part of the country that have potentially lower wages and lower housing costs have just as much right to complain as people who live in another part that has higher wages and higher costs.

We all need a place to live, so if we look at our homes too much like an investment we may get disappointed. On the other hand if we look at financing a home as paying rent + a mandatory savings + a place to live, it starts to look good. I rented way below market rate (rent control) in Manhattan and then got paid a bunch of money to tear up my lease. Now I've got a home, a garage for my old Dodge and Honda + non-gridlock places to ride the bike, fresh air, quiet nights, neighbors to drink beer and wine with, a tennis court whenever I want it, a 30 minute commute to work by train, a yard for the kid and the dog, a real kitchen, a basement for playing ping pong, a washer and dryer in my house, a garden and on an on. Those things are all incredibly valuable but impossible to put a price on. So it would be really hard to do a accurate spreadsheet analysis on whether I'm getting my money's worth -- but I absolutely know I am.

Congrats to the OP on the house. Love it and make it yours, even while the bank still technical owns more of it than you do.

[evanphi]

Those things are all incredibly valuable but impossible to put a price on. So it would be really hard to do a accurate spreadsheet analysis on whether I'm getting my money's worth -- but I absolutely know I am.

Congrats to the OP on the house. Love it and make it yours, even while the bank still technical owns more of it than you do.

This is exactly why we bought a house. Summing up all our costs, it is less expensive to be in a larger house than the flat we rent now. The place we are in now is just so old, our heating costs drive our total costs wayyyyy too high. We find out today if the sellers are going to meet some repair stipulations, and if we get the house.

[FunJimmy]

We find out today if the sellers are going to meet some repair stipulations, and if we get the house.

Got my fingers crossed for you.