Is homeownership worth the stress and endless furniture building?

[brewnog]

I've bought a house!

And have spent the last 2 weeks packing, moving in, unpacking, decorating, and buying and building furniture!

It's all very scary, and I'm now tied down with a mortgage until 2037, but it's great fun!

I think I probably qualify for entry in the world flat-packed furniture championships, and if I have to paint another wall magnolia (or "soft linen") ever again, I might cry, but it's my house, all of my own!

Yay!

 

[Cyrus]

Congratulations.

 

[Moonbear]

Congratulations! It's wonderful to become a homeowner. It'll take at least a year before you wish you had a landlord to call to fix things again. Enjoy your new pad! Wow, you've even painted and decorated already. I think you need to offer some tips to zenmaster. He keeps reporting his walls are still bare years after his move.

 

[turbo]

Congratulations! We managed to sell our "spare" house last spring. It's nice to own your own place - not so fun to maintain two of them through a long Maine winter.

 

[JasonRox]

Congrats!

That's awesome!

Man, I watch shows like Flip That House and I so want to do up my own house one day. And you're doing it right now!

It's probably hell though.

 

[scorpa]

Congrats that is awesome!

 

[apples]

Woah 2037.
Congratulations.

 

[hypatia]

I hope you enjoy every minute there. Do you have a yard?

 

[brewnog]

I have more than a yard, it's a patio! With a shed and a garage. There's not much growing there now, but I'm going to get a couple of apple trees, and a massive herb garden.

 

[Astronuc]

I've bought a house!

And have spent the last 2 weeks packing, moving in, unpacking, decorating, and buying and building furniture!

It's all very scary, and I'm now tied down with a mortgage until 2037, but it's great fun!

I think I probably qualify for entry in the world flat-packed furniture championships, and if I have to paint another wall magnolia (or "soft linen") ever again, I might cry, but it's my house, all of my own!

Yay!

Congratulations on becoming the proud owner of a 30-yr mortgage.

Congrats, brewnog!

 

[SticksandStones]

30 year mortgage? Ugh...and I thought years of student loans was bad.

Congratulations on the house, I hope it's worth it!

 

[hypatia]

I have more than a yard, it's a patio! With a shed and a garage. There's not much growing there now, but I'm going to get a couple of apple trees, and a massive herb garden.

How perfect for you! Take my advice, and get dwarf apple trees, you will enjoy them more in the long run. And make good friends with the neighbors who have great yards, they can tell you what grows well in your area.
The house I live in now, is only 15 miles from my old house, but a world of difference, in what grows well. Its my 3rd year here, and I will still be experimenting this garden season. Which of course, is half the fun.

 

[Cyrus]

Outch, do you people all have 30 year loans? Thats crazy to pay a loan off that long. Your paying the bank twice the price of your house in interest.

Brewski, whatever you do, pay off that house within the next 10 years, tops.

 

[hypatia]

It does make me wonder what interests rate in the UK are. I locked in a very low rate{4 3/4}, but still pay more to the principal each month, to shorten the duration of the loan.

 

[Moonbear]

Brewski, whatever you do, pay off that house within the next 10 years, tops.

What planet can someone do that on? I haven't seen any real estate short of a hovel that inexpensive. 30 years is a standard mortgage term. If you pay a bit extra, you can pay off in maybe 25 years.

 

[Cyrus]

I never said the property had to be cheap. For example, let's say I buy a townhouse for $350k. The mortgage is going to be somewhere in the ballpark of $2-3k a month. Now I am only one person. I still have 2 other rooms upstairs and a basement that I can rent out to some buddies of mine and collect very easily that 2-3k a month. Now I use my paycheck each week to pay on top of the rent. Then I buy another house, and I do the same. Before you know it, you have a lot of money.

When I went to california, they guys house I sayed at did this. He now has over 200million bucks and 2,500 properties. Its not easy, but it can be done. He came here with a suitcase, just like my parents, and now he's doing very well.

Its very possible to make a ton of money if you want to. And actually, Its making me wonder if I want to be an engineer scraping up 60k a year or go into real estate where I could make millions.

USA, land of opportunities for those willing to take advantage of them.

 

[Math Is Hard]

I think you'd make an excellent slumlord.

 

[Cyrus]

I think you'd make an excellent slumlord.

...your rent just went up.


My slums are number one in kahzakstan.

 

[Moonbear]

Ugh, that assumes you actually want to live with other people. Nope, I'd rather be in debt up to my eyeballs than have roommates ever again, and sharing a house like that sort of defeats the point of owning your own place. Also, if the house is zoned as a single family residence, what you've just described is illegal. Not sure how you'd manage to convince anyone to give you a mortgage so far above your means either, but I guess that's why we're hearing about such a high rate of bankruptcy sales now.

I also forgot how much more expensive housing in your area is too! Yikes! $350K only gets you a townhouse now? And to think I was balking at seeing $150K pricetags on townhouses around here. I can't quite fathom buying a townhouse when for the same price you can get a single-family house with land.

 

[Cyrus]

And to think I was balking at seeing $150K pricetags on townhouses around here.

Thats was the price of a townhouse here about 15 years ago. 350k gets you a really, really bad townhouse. A nice one is going to be at least 450k. A single family home is around 700k. The prices are a bit absurd now. But if I wanted to invest in housing, I would do it where you live because its cheap. I can buy and rent much more houses where you are than where I am, and that equates to more money for me.

Its not easy, its really not easy. But if you want to work very hard and sacrifice now, you will be living large in 20 years.

Nope, I'd rather be in debt up to my eyeballs than have roommates ever again, and sharing a house like that sort of defeats the point of owning your own place

See, you are looking at a house as 'owning your own place'. I look at it as a 'place to make money and then buy a second house'.

For me, its not about living by myself, its about cashing in on that house as much as possible.

 

[turbo]

What planet can someone do that on? I haven't seen any real estate short of a hovel that inexpensive. 30 years is a standard mortgage term. If you pay a bit extra, you can pay off in maybe 25 years.

My wife and I paid off our mortgage (ca 1990) in about 10 years by paying aggressively against the principal, and we bought our present house with cash. We are not wealthy. We both work, and have done so all of our lives, although I am pretty much side-lined with a medical disability now. Debt is seductive, but it is a poison that can control your life. Don't indulge in it if you cannot also save as you pay it off.

 

[Moonbear]

My wife and I paid off our mortgage (ca 1990) in about 10 years by paying aggressively against the principal, and we bought our present house with cash. We are not wealthy. We both work, and have done so all of our lives, although I am pretty much side-lined with a medical disability now. Debt is seductive, but it is a poison that can control your life. Don't indulge in it if you cannot also save as you pay it off.

Having two incomes makes it a heck of a lot easier, but for some of us, it's not an option.

 

[FredGarvin]

Not knowing what tax laws are like over by Brews, it is kind of nice to be able to deduct mortgage interest from your taxes. That's my largest deduction.

 

[turbo]

Having two incomes makes it a heck of a lot easier, but for some of us, it's not an option.

I saved while I was single as well, though I was not earning very much money. The trick is to adjust your lifestyle so that your expenses are lower than your earnings. I had my guitar, a modest stereo system and my clothes. No TV - I borrowed books from the local library, and I never ate out and only rarely bought any prepared foods, even the "cheap" stuff like macaroni and cheese - my homemade M&C was cheaper and tasted lots better. I lived within walking distance of the mill where I worked, had a used motorcycle to get around most of the year, and hitch-hiked when it was too icy to use the bike. At no time did I feel that I was deprived. When I moved in with my GF (now my wife of 32 years), she was way behind in her rent since she had been laid off from the mill earlier. I got the rent caught up, and when the mill closed, we moved LOTS of times so that I could follow construction work around and she found jobs in textile mills and shoe shops. We were always comfortable and well-fed,and our apartments were clean, if spartan, and we saved money for a down-payment on a future home.

There are immigrants doing farm-work here in Maine that are earning modest wages, and they send money back to their families every week. They are just not living the debt-ridden "American Dream" - they are living within their means. Disciplined frugality is not poverty - it is self-empowering and liberating. If we define ourselves by the possessions we surround ourselves with, we are not giving ourselves much credit.

 

[Moonbear]

turbo, just so we're clear...I agree with you entirely in terms of living within one's means and taking out a mortgage that one can still afford to save while paying off. That's really not an issue for me. But, I'm also sick and tired of moving, so the next house I buy is going to be one that I can envision myself living in for the rest of my life, not just a starter home that I'll move out of in a few years. Mortgage interest is tax deductible, so if you get a mortgage with a similar montly payment as rent, you're still better off in the long run to buy earlier and take more time to pay off the mortgage than to throw the money away as rent while saving up so you can pay off a house in 10 years instead of 30. If it still takes you the same amount of time to get to own your own home, all those years of rent that don't go toward owning anything are just wasted money. Of course, renting makes more sense when you're moving frequently.

It's just not reasonable to think someone is going to pay off a home mortgage in 10 years on a single income, unless of course you're earning 6 figures. The housing market just isn't that cheap anymore. When you bought in the 90's, that was the perfect time to buy. I wish I had been able to get into the housing market then, before all the prices practically tripled. If I was working instead of going to grad school, and bought a house when my friends bought theirs, I could have sold a house in NJ and moved out here and bought 2 or 3 houses outright on just the profit from the sale.

 

[marlon]

When I went to california, they guys house I sayed at did this. He now has over 200million bucks and 2,500 properties. Its not easy, but it can be done. He came here with a suitcase, just like my parents, and now he's doing very well.

Its very possible to make a ton of money if you want to. And actually, Its making me wonder if I want to be an engineer scraping up 60k a year or go into real estate where I could make millions.

USA, land of opportunities for those willing to take advantage of them.

I completely agree with that. The same happens out here.

marlon

 

[brewnog]

Brewski, whatever you do, pay off that house within the next 10 years, tops.

Ahahahahaaaaa, now I see why you got funniest member award.


Standard term over here is 25 years. However, there's no way I could afford the repayments on that, house prices in the UK are insane these days. I'm paying more than half my salary on the mortgage, without taking into account bills, council tax, insurance, and all the things I was paying before.

However, hopefully my salary is going to go up significantly over the next few years, and I intend to rent a room out (possibly £280 per month) to offset the mortgage. So ultimately, the term will be a lot less than 30 years.

But 10? Hahahaha!

 

[Moonbear]

I'm paying more than half my salary on the mortgage, without taking into account bills, council tax, insurance, and all the things I was paying before.

Wow! They won't even let you take out a mortgage for that high of a percentage of your salary here (well, a few shysters might). I haven't had to do this in a while (though need to do it again soon), but I think they cap your mortgage at about 40% of your net income (after taxes), and more like 30 or 35% of your gross income (the pre-tax income). That's why I'd like to know how Cyrus plans to get a $350K mortgage on a $60K salary. The numbers don't add up unless he's already independently wealthy.

 

[Cyrus]

As I said, If I were going to do housing to make money, I wouldn't do it where I live because the property values is too high. But its just the right price where you are. For a new townhouse at 120k, making 60k a years, I could pay it off in two years tops.

 

[Moonbear]

As I said, If I were going to do housing to make money, I wouldn't do it where I live because the property values is too high. But its just the right price where you are.

Ha ha...that's what my landlord thought. He's now trying to get out from under the thing. He can't raise rent, because there are too many other places to live, so he'd never get tenants for a higher rent (there's a whole new row of townhouses just built in my complex that's still unoccupied other than a few end units, so why would anyone buy his used home when they could move into a brand new one and choose all the appliances, carpeting, etc., before it's installed?), and there are so many brand new townhouses going up, that nobody wants to buy used. Most people who can afford the rent I'm paying would just buy their own house (I would have if I was certain I'd be staying when I first moved here). The majority of renters here are the poor students, and they won't live out where I am, they want to live in the apartment complexes that have shuttles to campus included in the rent, or downtown where rent is super cheap (because the slumlords have owned the same houses for so long they have nothing to pay off). It's the lack of demand for housing that keeps the prices low, plus there's such a ridiculous surplus of new construction that they're going to have to start giving away houses if the contractors want to get rid of them. I'm waiting. Several of those have been sitting on the market a very long time and they're going to have to start reducing the prices soon and sell at a loss.

 

[Cyrus]

Depends on the area...The market is down now in my area, but in general if you want to sell a house around here it will still go pretty quickly.

You have to buy a house in a cheap area, but not a cheap house in a bad market. You want a place that is still cheap but that you know is going to develop a lot over the next 10 to 20 years, so that by the time you sell it, its doubled in price.

Provided one could find a town house for 120k a year, in the next 16 years I could fully own 8 homes and collected 2k rent each month from each house. I am now retired at 38, making 16k a month to sit on my butt. All because I used my brains early in life and didnt buy things like new cars and living on my own. But now I can buy ferraris, go around the world...basically do whatever I please.

 

[scorpa]

Ugh, that assumes you actually want to live with other people.

Haha I hear you there Moonbear!

I actually know a few people who have rented the rooms in their houses to try to pay off the mortgage faster. For one person it worked rather well, they seem to be able to handle living with 6 other people crammed in the house like sardines. The other one couldn't handle a renter acting like they had bought the place and telling the owner how things were going to be done, in the end the owner had to ask the renter to leave because they just couldn't take it anymore. The other person ended up having damage done to their place by the renter and were not compensated for it, apparently the renter has more rights than the property owner. I think it could work with the right people, it is just hard to find the right people.

 

[turbo]

I will never again be a landlord. In the early 80's I bought a house at auction as an investment. It was already rented out and I kept the rent at the very low level that it was at when I bought the place, since there was a young couple with a toddler there and I wanted to give them a break. On the first day of the Labor Day weekend, the well pump failed. I managed to get a 2-man plumber crew there (Expensive!) and they pulled the pump. They were unable to fix the pump and had to order a new one which couldn't be done until Tuesday. Despite my fast action and paying weekend/holiday rates to try to get the water back on, the couple complained and whined, and when they eventually moved out, they stiffed me for the last month's rent. They also left the house in filthy condition.

When we bought our current house, it would have been easy to rent out our old house until we sold it, but I could not bring myself to risk exposure to that kind of creeps again. As it is, a drain line from the upstairs tub split over the winter, despite the fact that a plumber and I had drained and winterized the entire system, with antifreeze in the traps. The split line leaked water over the ceiling of the downstairs bathroom when the new owners first used the upstairs tub. I arranged to have the plumber inspect the pipes and estimate the damage. He said that there was no lasting water damage and that he offered to replace the drain line but the woman said "No, just tape it up. We're going to renovate the bathrooms anyway." A month or two later, she sent my realtor a bill for over $350 for two new mixing valves for the tubs/showers, which I cheerfully ignored. Then a couple of months later, I got a letter from her lawyer trying to extort $8500 out of me for "damages to the bathrooms" that I had "known about" and "covered up". I sent back a nice letter accusing her of extortion and pointed out that she would have to perjure herself if she sued and that the plumber that I had sent to look at the problem is considered a good expert witness by the state plumbing inspector. I almost wish she had sued, so I could have her prosecuted for perjury. Not that it matters, but she is a conservative "Christian" who home-schools their 3 kids while her husband works.