Posted on 05/09/2024 11:54:14 AM PDT by DallasBiff
Renting a Home vs. Owning a Home: An Overview
Buying a home is a huge part of the American Dream. Choosing to buy or rent, though, is a major decision that affects your financial health, lifestyle, and personal goals. Whichever option you choose depends entirely on your lifestyle and financial situation. Both require a regular income (so you can afford the payments and associated costs) and may also require a certain degree of effort to maintain.
(Excerpt) Read more at investopedia.com ...
I'll trade with him in a heartbeat.
“You’ll own nothing and love it!” - WEF
I’m an order of magnitude higher. No exaggeration.
“I’ll trade with him in a heartbeat.”
No kidding. What a bargain!!
“What’s the Difference?”
Now that’s a tough one.
Let’s see. At the end of 30 years of mortgage payments, you OWN your own home.
At the end of 30 years of rent payments, you continue paying rent forever.
One you pay rent to a person, the other you pay taxes to a bureaucrat.
We rented for 20+ years before we bought a home.
My entire real estate tax is less than one months rent.............
In fact NOBODY should own a home (ie, be a tenant).
Homes are built for Banks. People, not so much.
For the 0.01% (or less, much less) of homeowners that DO own their homes, they have Alodial titles to their land and homes, and they indeed have sovereign rights to their land/homes (NO property taxes).
The article is hogwash, it massively downplays the equity and security aspet of owning and way overstates the benefits of renting.
Bottom line after 30 years you own a place to live and it has a significant inherent value, after 30 years of renting you own nothing, zero rent paid comes back to you.
Let’s see. At the end of 30 years of mortgage payments, you OWN your own home.
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I disagree.
After xx years of mortage payments, you own a title/deed that guarantees you will pay property taxes, which is effectively RENT PAYMENTS to the government, because if you fail to pay them, your property will be foreclosed upon by the government in order to get what they are owed.
The only real difference between renting and owning is equity.
You pay your property taxes whether you own or rent. If you own, you write the check to the county. If you rent, you pay the landlord who writes the check to the county. Either way, you are paying your taxes.
When you say you get equity by owning, that’s the exact same thing as saying “you own the home when the mortgage payments end.”
Exactly. I built a house in 2003 at $210K total price. Paid off early during COVID, and my $1800 monthly mortgage goes directly into retirement savings and vacations. My military retirement check is fully mine now, and add that to my current job salary...$200K a year with 0 debt. My house currently has a value of $600K, so when retirement time comes, I’ll sell, and use the proceeds to downsize and pay cash for a home in Tennessee. Then, I’ll start blowing all my retirement savings on my classic car re-builds so that when I finally kick the bucket, no one can argue about how much of my money they’re going to get. So yes...buy the house that you can afford, and sacrifice on other things. Your day will come.
Only paying property taxes is typically less than rent in the same area for similar property.
The value of the property tends to increase, of which a renter gets nothing.
Tenants are also subject to landlords, who may wind up kicking them out for some reason, such as selling the unit (which typically gives tenants right of first refusal), or not renewing a lease so they may perform renovations.
A significant number of homeowners got caught behind Democrat lines and own property that's worth a fraction of what they paid for it.
When you say you get equity by owning, that’s the exact same thing as saying “you own the home when the mortgage payments end.”
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Not the same thing.
Because you don’t own your home even when the mortgage payments end, you just own a deed or title. As I said.
What is more, you can have equity in your home even when you are not done making mortgage payments. So yes, you own some equity in the deed, as long as you can resell the title /deed that you own, but the property belongs to the government. The title (and it’s equity) will be yours as long as you keep making the tax payments.
I grew up in a house in New Jersey, built in 1930, pretty typical 2-story sub-1000 sq foot. I know people who still live in that area and they are paying TWELVE GRAND in prop taxes. Texas and Oklahoma have huge prop taxes.
I pay almost 3 times that much in property tax.
Besides the property taxes...how much interest did you pay on the mortgage over the course of 30 years? 2-3 times the mortgage principle? (Do you now own part of the lender? No.)
What about the $$$ you’ve put into maintenance and homeowner’s insurance? What about the initial closing costs...the costs to sell when you or your heirs sell the property? 6% of the sales price is a big chunk of your dwindling profit. You’ll get some help from the IRS if you take the once in a lifetime long-term capital gains exclusion upon selling. Of course, Joe Biden is trying do away with the parent’s “basis” on the heir’s sale of the parent’s home...to the current value. Can the once in a lifetime long-term capital gains exclusion be far behind?
Yes, I know rent payments include the landlord’s expenses including mortgage interest, property taxes, insurance and maintenance.
Yes. When I made my last mortgage payment in 2011, I have not had to make any more, since. Taxes and insurance are another story, but I am not going to get a rent increase.
I have a house in Florida and a house in Kentucky and pay nearly $4000 in property taxes for each one and a similar amount in insurance.
Owning a home is not cheap but then again nothing is cheap.
My first home was only $22000.00. That’s not two hundred and twenty thousand but twenty two thousand. That same little home today is worth well over ten times that amount. Today we talk about million dollar houses like it was nothing. I tell people it’s just inflation. In 1964 a gallon of gas was 19.9 cents, that is two dimes. Today two silver dimes are worth over five dollars, so gas is actually cheaper today than in in 1964. It is the same with cars and houses. In 1965 you could buy a Ford Mustang for just under $2000.00 today a new Mustang is $40,000.00 or more.
I do own but have several rentals too. I lost money in the stock market in 2003 and again in 2008 and decided to back away from Wall Street and instead go with rental real estate. I think it was a good decision. It isn’t for the faint of heart to be a landlord but for me over time it has been a more secure investment than the stock market.
The real estate investment keeps up with inflation and the renter helps you pay for it. When I sell out, if I ever do it will be a pretty nice pile of money. That isn’t all good because of capital gains taxes which should be outlawed.
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