I put down 140k on a home and it's been a moneypit
I bought a $520k home and put down roughly $140k. My partner and I are 34, fairly successful, I just finished a grad degree a couple years ago. Anyway, I left 25k for emergencies/buffer (not counting retirement savings).
Home ownership thus far has been HORRIBLE. Horrible. I prided myself on saving a lot of money, we have no major debt, etc. Bought in a good, stable area. Our basement flooded due to a septic issue in the town (partially compensated by home owner's insurance due to it being no fault of our own). However, still a 5k tab. Then part of our porch caved in due to -- I am shitting you not -- an ice storm last year, in which a huge chunk of ice rammed from a tree into the side of the porch and upended the flooring. Another 2k to replace flooring.
Then our neighborhood became "rezoned" and our house, previously in a prime school district, was rezoned into a less desirable district.
And finally...FINALLY...A f'ing wacko family moved next door. They are well meaning, but incredibly noisy, messy, and they have a very large, very energetic dog who always runs into our yard.
Meanwhile we're still saving but not as much, have spent 10k plus on repairs and improvements, and we have been here less than 2 yrs so I doubt we'll make any money at all if we move.
Someone tell me why our parents thought home ownership was all that?????
I bought a condo and I never looked back. Fuck home ownership, the upkeep/maintenance is just something I don't want to deal with.
OP, sometimes it's best to just cut your losses. The bad neighbors would be the final straw for me. If you think you could at least break even, I say put it up for sale in the spring.
I feel the same way, except I didn't pay anywhere near as much as you.
I had a gas leak in 1 wall heater out of the 3 in the house. The second one died. So I only had one working heater in one room. After the gay leak the city reg tagged my house and I had to replace all the gas mains and piping inside the house. Decided that it would be cheaper just to put in central heating and air.
All of the ductwork that was put up on the roof (a flat roof) started leaking.
Lost my job while halfway into some remodeling and had gutted the master bathroom. Ran out of money when it took a while to find a job.
Now the house is worth about 40k less than I paid for it. My job situation hasn't improved so no more renovations.
This year my place was broken into and all of my electronics were stolen. They kicked in 1 door and destroyed another trying to get in. The insurance company canceled my policy.
A few weeks ago during windstorm a 60 year old tree lost half it's branches, just missing my car. Had to have it taken down.
I'm so ready to walk away it isn't funny.
Condo ownership is no picnic. Our area got flooded by a 100 years flood. 50% of the owners have basements 50% do not (I do not). They basements all got flooded. They did a study and decided our sewers were not right and the board voted to asses either the basement owners or all of us to repair. Guess who the board consists of? Basement owners so we were all assesed 5000 bucks and I had to have my drive way torn up to replace the pipes since I was an end unit.
The company they hired to do all the work was stellar too. I came home one day to find they running their equipment off my outdoor power. I immediately went to my panel and killed the circuit breaker to those outlets. I called the head of the board asking them who was paying my power bill this month.
Then when they dug the trenches for the pipes, they tore up my cable (I work from home) despite my pleading with them to be careful and mindful of the flags (time warner came out and marked where the cable was). They knocked out power and phone for half the complex too.
it was a fucking nightmare. BUT...the best part was we had a second 100 years flood and all those bitches got flooded again! I laughed my ass off.
[quote]BUT...the best part was we had a second 100 years flood and all those bitches got flooded again! I laughed my ass off.
I bought a condo in '06 so of course it is now worth less than purchase price. Thankfully I haven't had any repair issues. I try to focus on what I would have spent renting v. what I actually spend owning. At some point that will balance out and then in the long run renting will lose. If I want to sell in the meantime, I'm fucked and will lose money though.
Bought condo in 07 - spent another 25K redoing it and, while I like it, I could have bought a much larger condo just a few years later with less money that was almost already completely redone.
Can't sell it without losing a ton of money. Stuck here - but it is all I need really. I just remind myself of what others are paying for rent and I feel a bit better. But still - I feel like I'm here for another 5 or 10 years.
Rich people problems. Quit your whining.
I had a home in Africa.
I knew a girl who bought a house and then she died.
I hear homeowners say this all the time. Home ownership often sucks.
All the mud walls in my village washed away in the last flood.
It was a farm in Africa.
Condo owner here too. Bought in 2003 at the start of the housing boom, I got a great deal, great neighborhood, nice community. Although not as profitable as it would have been 7 or 8 years ago it nevertheless is still worth more than I paid for it. Some updates last year for about $10K which we did to live in, not for selling purposes. Love the place and even though property taxes are high and there is the occasional repair, I don't regret it. Will live here at least another 10 years before I retire and move. However, after that I doubt whether I'll own again.
I like my home, but I have a busy job so no time for home maintenance so I hire everything out. Not cheap but worth the money to me. I didn't buy a condo because in my city, the only condos worth owning are in the burbs, and I just can't live in the burbs!
I'm doing a renovation, I've had landscaping done, etc. Still, my realtor says I can only expect to break even given the market if I sell in a year or two, which I plan to do. Didn't phase me at all. I never look at a house as a potential source of money. When I sell, I'll probably get between 30-40k after all fees, taxes, etc., are paid. That's enough to put down on a new home. Plus I got a lot back in taxes due to home ownership, so I'm sure I'll still be a few thousand ahead.
Bottom line, homes ARE often moneypits. I thought I read somewhere to expect to pay an average of about 5k a year on home maintenance. Based on my ownership of two homes, I'd say that's about right.
Bought a 30's Mediterranean-style bungalow in a leafy burb on the SF Peninsula in 1997 for $400k and just sold it for $1.9M. The cherry-on-the-sundae is that I was able to grind the realtor commission on the deal down to 1.25% saving me about $90k.
For the last 6 years, I've been renting it out for nearly $6k/month which allowed me to virtually pay off the mortgage.
I think I've spent less than $12k on repairs and improvements since I bought it.
Needless to say, the ROI on this bad boy is ridiculous.
Nothing like a white-hot market fueled by obscene tech salaries, floods of stupid IPO money and the best place to live in the entire world.
Don't gloat, R17, it's not becoming. Some of us are lucky and live in hot real estate markets. We bought our Brooklyn brownstone in 1997 for $400K and it has had a similar rise in value (we paid off our mortgage). Not sure of exact numbers because we haven't put it on the market, but it's probably worth $2.2 million.
We bought a condo in downtown Brooklyn in 2010 which we rent out and now I'm kicking myself, wishing we'd bought two of them. The prices here are insane.
We bought our home directly on the lake with no neighbors in NY state. Paid $730,000 in 05 and put another $200,000 in improvements both inside and out. Now er are told we can sell it for $599,000. Yeah home ownership is great. Wish I had more!
Jesus Christ, gay men make the big bucks.
R18, I'll gloat if I want to and "luck" has nothing to do with it. I've worked like a dog scrimping and saving to buy my portfolio of rental properties (none of which are more than 20 miles away), and I've always avoided the shiny allure of "quick buck" investment properties like the plague. And don't think I've not been tempted. I've could have bought an entire zip-code in Palm Springs for what I've spent on homes, duplexes and multiplexes in the bay area.
I warned against and then watched good friends lose their shirts (literally) making ill-conceived investments in property in Florida and Nevada.
For me, all real estate (and politics) are local and if you don't do your homework and really understand the dynamics of the area you're investing in to then the risk of walking the financial "plank" expands exponentially.
Glad things are working out well for you in Brooklyn.....isn't that near Manhattan?
Well, alright, R22 R17. You [italic]be[/italic] the nasty bitch you always dreamed of becoming.
I hope your cunt doesn't fall off. No one will help you put it back on.
I have foundation problems that 6000 dollars hasn't managed to fix... so I have cracks in the walls and ceilings and tile floors that I'm afraid to repair (god knows how much THAT will cost) for fear they'll just reappear.
Doesn't everyone know that it is foolish to look at your home as an investment? You should be there because you want to live there and figure it will cost you money.
If you happen to make money at the end of the day, then it is a good thing, but it is stupid to expect it. But given things like mold, natural disasters, and just the wear and tear of living why would you not expect that it would cost.
Spending 7k in a year on a home worth over 500k seems perfectly reasonable.
Years ago a friend of mine told a psychic that the real estate could go bust. When I asked a realtor what factors could make that happen, he got flustered and said it was impossible...then I knew that whether the psychic was right or not, real estate was not a good investment since it was working on faith and few could even articulate what factors were driving the price up.
r17/r22 should win some type of prize for obnoxiousness. And vulgarity.
I'm SO glad the OP told us he and his partner are successful and that he just finished his grad degree!
I mean, how on Earth would we have understood anything in this thread had we not been made privy to that?
one word, op:
What R17 isn't telling you is that what he made from his bungalow sale won't buy a decent condo/house in his area now.
r22 shops Banana Republic in season and thinks Houston's in Manhattan is the pinnacle of chic.
This entire thread was started so that we could all admire and envy how successful OP is. Get a blog, cretin.
OP, your entire post is what is called a humble brag. Fuck off.
I wish the housing boom had never happened. Shelter is a basic human need, and jacking up the costs to freakish, artificial levels is immoral.
Sounds like you couldn't really afford it in the first place. You have so little into, just get out of it an move on.
Real estate has been oversold as an investment and home ownership isn't for everybody. I think it's like a relationship. If you're not getting five times more out of it than you're losing to be in it, it's just not worth it.
Homes can be an investment in a good market like San Fran, LA, Manhattan etc..but the whole flipping movement and over valuation of real estate pretty much screwed us in most other states. People were way over estimating the value of houses and people were getting approved to buy them who really had no financial means to purchase them in the hopes of flipping it for profit.
[quote]We bought our home directly on the lake with no neighbors in NY state. Paid $730,000 in 05 and put another $200,000 in improvements both inside and out. Now er are told we can sell it for $599,000. Yeah home ownership is great. Wish I had more!
How the fuck can that be? Even if it's a buyers market that doesn't make sense. Either the appraiser lied to you/doesn't know what they're talking about, or you got ripped off and overpaid when you bought it.
R22 Keep on gloating...
Unless you're dealing in the high-end market, the only way you make money is to buy a house and live in it for a long time. People who move every 4-5 years are pissing money away.
If you can afford a $520k home, you can afford routine maintenance.
Rich people are insufferable.
R31 and R32 are 100% correct.
Can someone explain how the US real estate market shifted? In the postwar boom it was decades of steady growth, where real estate was a pretty safe investment and hedge against rising rents. And people paid comparatively less, enabling e.g. stay-at-home parents. (I know several couples who'd love to have one parent stay at home but their mortgages mean both have to work.)
Now we have pockets of insane prices that keep climbing, while many of the postwar boom burbs have been lackluster. And the unthinkable has come to pass: a big chunk of people are now underwater in their mortgages. A few decades ago nobody could have ever predicted that.
Can an economist explain how this happened? Was it the fed injecting too much money into the system?
"If you can afford a $520k home, you can afford routine maintenance."
But apparently he couldn't afford a $520k home, and had no idea that he was buying a place to live, not a mutual fund.
"Glad things are working out well for you in Brooklyn.....isn't that near Manhattan?"
What, are you finally catching up on all those episodes of "Gossip Girl" you missed on Netflix? Whose Serena fucking this week?
I'm not an economist, but I do know one thing. People years ago did not generally buy more than they could afford. My parents saved up and bought a home they could afford based on one salary. Their next house they paid cash. This was on a factory worker's salary. They SAVED for things. This is something most people don't do, myself included.
renting is the best
i moved cuz my building became the shit
we had family of 6 living in a 1 bedroom
5-6 roomates in a studio
nosy, drunk, constantly smoking retards
and yeah tons of dogs
glad i moved out of the pit
Don't worry, OP. Many DLs are underachievers who blame everyone else for their misfortune.
[quote]This was on a factory worker's salary.
A few decades ago this was a middle-class salary, with stability.
These people were the foundation of the economy. Now the top keeps spiraling higher, and the rest of us are kind of floundering in a way our parents/grandparents wouldn't have believed.
R40 That's what I'm thinking. If you buy a home for over half a million and are crying about spending $10,000 in repairs over 2 years, you obviously couldn't afford it in the first place.
I heard there's human excrement all over the sidewalks in San Francisco.
(R20) here. (R37) we are told because most other owners were the wealthy downstate city folks who drove prices up after 9/11 and inflated prices and after the housing bust these same downstate buyers were now desparetly trying to unload these second homes cheap and drove the prices down. We obviously will wait. We are willing to ake a loss but not that big of a hit. Frankly we can't afford to take that hit. But in the meantime we love living on the lake and eventually will move to a warmer climate if the market ever recovers.
Buying a home is like gambling- it is a risk. Everyone i know who owns a house is underwater- not literally=I don't know anyone in the Philippines. I have always rented and saved lots of money for other interests. Zero interest in owning a house- much too much work.
R51 Renting may be nice when you're young or if you're someone who likes to move frequently, but is it really that great once you get older? When I'm old, I want to live in a place that's paid off. Who wants to worry about rent when they're retired and have a lot less money coming in?
Again, with a simple fence, the OP will solve 2-3 of the things he's complaining about.
[quote] When I'm old, I want to live in a place that's paid off. Who wants to worry about rent when they're retired and have a lot less money coming in?
You will still have to pay property taxes, even if you do not have a monthly rental or mortgage payment.
R54 Yes, but property taxes aren't going to come close to the cost of a years' rent.
Sorry OP. Home ownership isn't what it used to be.
[quote] Yes, but property taxes aren't going to come close to the cost of a years' rent.
Depends on where you live and how big/expensive your house is.
My rent was over $1200 a month. My mortgage on my house is half that, and I have twice the space and no shared walls, floors, or ceilings. Even factoring in the expensive property taxes, I'm paying less per month.
Until you factor in home repairs and remodeling of course, but still.
And when I move, I'll sell this place, and have most of my money back... renting just sends all of the money down a rat hole never to be seen again.
I love the clueless assholes who think the choice to rent is favored by people who love throwing money down the drain! I pay $2,100 a month in rent because there's no way in hell I could afford to buy a decent house within a 30 mile radius of where I live (DC area). Sure, I could buy a 600 sq ft condo...and the associated monthly fees...but renting is the only viable option.
It's a goddamn shame when someone with good credit and a low six-figure salary can't even afford a house.
I have friends, r59, who had the same problem as you.
They lived in Silicon Valley, and had to move clear across the country, because they could not afford to buy a house.
They were able to transfer with their employers and moved to a DC suburb where their combined salaries were enough to buy a nice 2-story in a good neighborhood.
Perhaps you could remove yourself from the DC housing market with a transfer or job change?
If you had asked me twenty years ago, I would have said buy, never rent and enjoy your security. Now, mortgages are slowly rising again and house prices have been pushed so that they are selling for often double the value of two years ago. Buying a "starter" home today means a $500 to $600k mortgage for a house that is the size of a box and requires major renovation/up-keep. Advice to my single daughter in her twenties: the choices are a mortgage that she will be paying until she is 70, no travel, no extra money to renovate or buy the furniture she really wants and entertainment and decent nights out with friends will be sporadic. Add to this, heavy rates (live in NZ and they are similar to the US tax?) which seem to increase every year, increasing power, water costs. PS daughter -you will have to save for your retirement as well. Currently, she is paying rent, has no overhead costs and if the house falls apart it is the landlord's problem. She travels, buys decent furniture, up-dates her car and enjoys a great social life. Living her life and she has a retirement fund which she regularly contributes to. I don't know what to tell her?
[quote]My rent was over $1200 a month. My mortgage on my house is half that
Where do you live? (If you don't mind answering, of course)
And how much was your down payment?
What surprises me are the real estate taxes in some of these hot areas.
They're unbelievably low for the prices asked - Seattle with $6,000 on a $650,000 house, Del Mar with $9,000 on a $1.5million house.
Then there are HOA fees for houses that go from $284 to $1250 per month.
Buying a home has ALWAYS been a financial Everest initially. People who say they or their children can't afford it are being dishonest. What they really mean is: we're not prepared to compromise our lifestyle for a few years by buying a tiny shitbox. Well boo hoo. Thanks for giving us Baby Boomers your rent. Do we have to tell you that we started out in shitboxes? My first one had MUSHROOMS growing in a corner of the living room & and a bean bag. That was it for furniture. So when I hear Gen Ys & their parents whinging I just roll my eyes.
And it's still hard. Had to pay $26k this year alone for repairs on my investment condo. The rent will barely cover that. And the renters are complaining. Well tough. Your rent increase is in the mail.
I'm glad I don't rent -- anything, anything at all -- from you, R64. I hate holier-than-thou pukes like you.
R64 = Angry at the world.
The advantage of renting is the opportunity it gives you to under-consume. You can live in just as much space as you need, and only have to cover the cost of your landlord's old mortgage. It's rare that buying opportunities allow you to restrain the level of housing you consume. You're usually forced to get something newer, and bigger. It's very hard, in that context, to truly live beneath your means.
As someone stated earlier, any purchase of a house/condo/townhouse these days that is made with a view as it being an investment is not a wise move. Maybe a few years ago it was a good investment idea, but not in today's world. I know more people, of ALL ages, who opt for renting. I even know a few retirees with gobs of money in the bank who refuse to purchase.
You all are "targeted individuals" because you don't/can't reproduce and create new soldiers for the New World Order.
$10,000 a year for repairs on a $520,000 home does not a money pit make. Relax.
I'm sorry, I meant $10,000 over two years isn't a money pit.
R29, Au contraire mon frere....before the sale of my bungalow closed, I purchased a 6 unit apartment building in the same leafy burb and did a tax free 1031 exchange of the bungalow proceeds into the new property. Now my rental income has more than doubled to $15k/month and I'm still mortgage free.
And that's the fact Jack.
Some people get the prunes and some people get the shits.
Real estate is still overvalued compared with historical averages. That can't last forever...it'll eventually revert. We haven't seen the end of this.
r64 Not complaining and not saying don't buy. I bought knowing that my mortgage would be paid by the time I hit my forties. Now, it's not unreasonable to expect to still have a mortgage when you are 70 in NZ. My $325k house is worth $500k in less than 18 months. It's not worth that at all and I would only be able buy a similar box in the same area. My expectation is that I would enjoy the results of my hard work in my fifties. My daughter can expect to wait until she is late 60s even 70s.
R54: You also have to pay property taxes in a rental. The landlord doesn't just let you live there at a loss for him. Local property taxes are part of the rental rate.
Historical real estate prices = 10 x annual rent.
If you pay cash, gives you a 10% return BEFORE taxes, utilities, maint.
The market is still very distorted by low interest rates and investors looking for % returns anywhere they can find them.
We're going to fall again before this is over.
[quote] You also have to pay property taxes in a rental. The landlord doesn't just let you live there at a loss for him. Local property taxes are part of the rental rate.
It's not the same. You only pay a small percentage of the total amount due on the property, included in the cost of your rent.
Try only paying a small percentage of the amount due on a property that you own and see what happens.
Despite all your good fortune, r72, you do not sound very happy.
I couldn't POSSIBLY live in a house that cost less than 500K. I mean, really.
I love encountering tortured, faulty logic like r78 's!
[quote] I couldn't POSSIBLY live in a house that cost less than 500K. I mean, really.
[quote]by: Muffy St. Snobbins
Our dog says the same thing.
R78 is a dolt who is destined to never own property.
I have a pretty great job, but bought a home that essentially was well below what i could afford. The tradeoff is I kept my ancient smallish apt in a big city. My home can and does periodically eat up big money, but not often, and the mortgage is crazy low. Realize now that was a wise decision I made. Bought what I knew, similar to my parents home.
Sometimes I just think i want to rent the damn house out, cept I keep my warm weather toys there, bikes clubs kayaks.
[quote]Had to pay $26k this year alone for repairs on my investment condo. The rent will barely cover that. And the renters are complaining. Well tough. Your rent increase is in the mail.
And their move-out notice is also in the mail :)
R42, people forget that between 1988 and 1992 in the North East, housing prices fell. I believe Texas has also had two different periods if falling home prices since the 1970s. So this isn't anything new, it's just that people didn't want to remember, or listen to people who did.