Housing Costs

Actually ya'll are lookin at it wrong.

Think of buying in terms of a savings account... it's all about what you can get OUT of your purchase at the end of a period of time, you weigh that against earned interest rates and that's how you figure whether it's better to rent or buy.

If you live in a flat market, you're not going to see much in terms of equity growth on your house, so you're better off with putting your money in a savings account, if you live in a hot market then the money you put into your house will actually gain value over time and you'll get a higher return on the sale of your house than a savings account.

You can live in a flat market and be pissing your money away on a mortgage just as much as you would rent.
that's a good point, and close to one of my considerations. if I rent a cheap place I can pay down my student loans more quickly. I have to balance what I'm paying in interest on them with the expected return on a home investment. Fortunately I am looking in a place that is developing quickly. A lot of the houses I'm looking at have gone up in price recently because the land they're on is so valuable. Knockdowns are increasingly common. That bodes well for a decent increase in the ppty value.
 
Exactly. For the most part rent/mortgage costs are usually similar. What you get with a house is insulation. If you choose a 30 year fixed, the rent will NEVER go up.

in 20 years, my payments will still be around $700 a month, and by then, $700 will be chump change. :D
 
in 20 years, my payments will still be around $700 a month, and by then, $700 will be chump change. :D

Property taxes always go up, if they ever go down then your home has devalued and you're screwed out of your equity.

I'm curious as to how much everyone's property taxes are.

Around here they're 2 1/2-3% of the purchase price, so for a starter home around here that isn't in the ghetto, the property taxes are between $4500-7000 a year.
 
I bought my first house for $47k.

I now have equity close to $500K.

If you buy wise, you can't lose.

The sooner you get in, the sooner you can glean the benefits.
 
dbzeag, even if all the math you did didn't leave out several important factors I can see your point. It sucks to buy a house in Cleveland, OH. Actually, I believe it sucks to buy a house in Ohio period. Anyone wanna buy a house in Ohio? I have one. It's nice. Only 2 years old.

Anyway, here in Maryland IBWIP bought a condo for 89K about 6 years ago. We have replaced the windows and done some work to the bathroom. It probably cost around 15k to do all that. At this point we have probably spent about 22K in interest on the place (which I might add has all been tax deductible). Our condo association fees have cost us about 22K. So total we are looking at about 148k for our condo. The estimated market value of our condo right now is about 225k. I'm not sure how we've lost out here. We get to borrow against the equity if we want. We have a place to live that we can do whatever we want with. According to some, we live in one of the top 10 most desirable places to live in this country.

If we rented in this community our rent would be about $1500 a month for a comparable place. Over 6 years that's 108K. We would have absolutely nothing to show for that right now. I think we are incredibly lucky and we have not wasted any money or time.

hay now, ohio is a nice place. Ideally id like to move up to Urbana, but the commute to work would be a bitch. The area we live in isnt exactly a happening place to live, but the area is growing nicely and has been since the early 90's. We even just got a nice new mall exactly like Easton in Columbus just a 10 minute drive down I-675.
Living next to an air force base will hopefully keep me employed for a long long time, and if i get a BS in management or something, i could be a civil servant and be set for life. :D
 
Property taxes always go up, if they ever go down then your home has devalued and you're screwed out of your equity.

I'm curious as to how much everyone's property taxes are.

Around here they're 2 1/2-3% of the purchase price, so for a starter home around here that isn't in the ghetto, the property taxes are between $4500-7000 a year.

they went up last year. now im paying a whopping $1000 a year. :lol:
 
it's a lifestyle decision also. you're talking about highrise living and everyone else is talking about a single family home. what's not being addressed is that you can buy condos and you can rent houses. if you like highrise living you should compare the cost of buying a condo in a highrise to the cost of renting in one. plug in all the numbers for your area and see which comes out on top. (assuming highrise condos are available in your area)

I did. That's why I am taking delivery on one April 26th :fly:
 
If you can afford 1200 a month and you are only paying 600 a month you should save the hell outta that money and put a larger down payment down in a couple years.
 
Actually ya'll are lookin at it wrong.

Think of buying in terms of a savings account... it's all about what you can get OUT of your purchase at the end of a period of time, you weigh that against earned interest rates and that's how you figure whether it's better to rent or buy.

If you live in a flat market, you're not going to see much in terms of equity growth on your house, so you're better off with putting your money in a savings account, if you live in a hot market then the money you put into your house will actually gain value over time and you'll get a higher return on the sale of your house than a savings account.

You can live in a flat market and be pissing your money away on a mortgage just as much as you would rent.


:heart: And who said all girls are ditzy? :heart:
 
hay now, ohio is a nice place. Ideally id like to move up to Urbana, but the commute to work would be a bitch. The area we live in isnt exactly a happening place to live, but the area is growing nicely and has been since the early 90's. We even just got a nice new mall exactly like Easton in Columbus just a 10 minute drive down I-675.
Living next to an air force base will hopefully keep me employed for a long long time, and if i get a BS in management or something, i could be a civil servant and be set for life. :D

Don't get me wrong, there are a lot of things that I miss about Ohio. Trying to sell a house where we lived is tough though.
 
Property taxes always go up, if they ever go down then your home has devalued and you're screwed out of your equity.

I'm curious as to how much everyone's property taxes are.

Around here they're 2 1/2-3% of the purchase price, so for a starter home around here that isn't in the ghetto, the property taxes are between $4500-7000 a year.

$1170 a year for my condo. The average in Lakewood is $2168. That is for a house valued at $122500.
 
Don't get me wrong, there are a lot of things that I miss about Ohio. Trying to sell a house where we lived is tough though.

Yeah and this is a problem a lot of people are having right now, they buy places and now that the housing boom has pretty much busted, it's a buyer's market. So of course you've got this place and it's worth money, but you can't sell it.

I've been keeping an eye on places here and theres a small town about 10 miles northeast of me where a house originally listed for 202k has finally had a contract put on it for 149k. That's quite a deviation from the original selling price.

So again, your house is only worth as much as someone else is willing to pay for it.