Most likely never buy a house again.

[easilyscan 1,014]

I had a friendly debate with a coworker on a subject somewhat related to this. Keep in mind that this was around 2005, so the $ figures I'll be mentioning will seem incredibly low relative to today.

Coworker stated that a friend of his bought a house for 100 K, paid it off in 20 years & sold it for 200 K. Said the guy doubled his money.

I asked if his friend ever had to replace things like windows, roof, siding, furnace/AC, water heater, etc. He told me he had to replace all those things during those 20 years.
I added that you have to count property taxes, insurance, any street assessments that might've occurred during those 20 years, etc.
And of course, even though he paid it off in 20 years, he still paid a substantial amount of interest.

In the end, we agreed that he really didn't double his money. I thought about it later & even though I've never been a ‘the glass is half full guy’ I thought about it from a different perspective.
Even if he added all his bills for the aforementioned items, & that total came up to exactly 200 K, there's a silver lining.

He lived rent free for 20 years. The equivalent of a landlord thinking so much of one of his renters, that after 20 years, he cut him/her a check for all the rent they’d paid.

One more thing. You mentioned you can take the money that you saved monthly by renting instead of owning, & investing in the S&P 500.
You can still do that if you own a home. I was fortunate enough to be able to pay extra on my mortgage every month, & still put 15% into my 401(k), 40% of which went into a Vanguard S&P 500 index fund. 

That being said, different strokes for different folks. Like someone already stated, every situation is different & I say to each his own. 
 

[WhiteWonder 2,931]

45 minutes ago, mmmmm...beer said:

Yeah I'm talking about moving... For real.  Not like.. for a month at a time.

My main point to the whole thing is that buying a house isn't the end all be all.  If you already have the nest egg... Why?

We sold our house June 2024.  After maxing out our Roth's for the wife and I last year... And this year .. plus giving each of our girls $5k I to a UTMA, I dropped $205 into SCHG.  It's currently sitting at $267 in what...17 months?  Not yo include what we made on the Roth's and the girls UTMA's.

There's no way I'm dropping that back into a house.  Having that capital to invest now should crush any return on a house.

Yeah talking about your personal investments is irrelevant to the basic discussion of renting vs owning property. 
The topic has been done to death on this forum and my conclusion is that there are benefits to both (more benefits overall to owning property even if you don’t live in it) and of course a lot depends on your situation and stage in life. 
if you’re having kids or have young kids I don’t think there’s much argument for renting, assuming you want to give them a stable upbringing in the same school systems etc. if you feel like you are going to stay somewhere for 15 years then yes, I tend to feel paying someone else’s mortgage and taxes is pisssing away money. 

[WhiteWonder 2,931]

12 minutes ago, easilyscan said:

I had a friendly debate with a coworker on a subject somewhat related to this. Keep in mind that this was around 2005, so the $ figures I'll be mentioning will seem incredibly low relative to today.

Coworker stated that a friend of his bought a house for 100 K, paid it off in 20 years & sold it for 200 K. Said the guy doubled his money.

I asked if his friend ever had to replace things like windows, roof, siding, furnace/AC, water heater, etc. He told me he had to replace all those things during those 20 years.
I added that you have to count property taxes, insurance, any street assessments that might've occurred during those 20 years, etc.
And of course, even though he paid it off in 20 years, he still paid a substantial amount of interest.

In the end, we agreed that he really didn't double his money. I thought about it later & even though I've never been a ‘the glass is half full guy’ I thought about it from a different perspective.
Even if he added all his bills for the aforementioned items, & that total came up to exactly 200 K, there's a silver lining.

He lived rent free for 20 years. The equivalent of a landlord thinking so much of one of his renters, that after 20 years, he cut him/her a check for all the rent they’d paid.

One more thing. You mentioned you can take the money that you saved monthly by renting instead of owning, & investing in the S&P 500.
You can still do that if you own a home. I was fortunate enough to be able to pay extra on my mortgage every month, & still put 15% into my 401(k), 40% of which went into a Vanguard S&P 500 index fund. 

That being said, different strokes for different folks. Like someone already stated, every situation is different & I say to each his own. 
 

Great post. To the part where you asked your friend about repairs and everything, I’d probably also ask a similar renter how much outdoor living space they had, if their landlord let them do everything they wanted, what type of property they were renting (I.e any shared walls and noise at all?) And the property tax, again, is being passed on to the renter in most cases, renters insurance, etc. 

I would feel that his initial investment doubled. The rest is just cost of living. 

[FrancieFootball 172]

9 hours ago, mmmmm...beer said:

You didn't really seem to read anything I wrote.  You have a preconceived notion.  Again... Nothing wrong with what you did.  It's fine.  It may not math what you think it mathed though, but whatever.  You don't seem to care.  Which again... is fine.

We're having a thoughtful discussion of buying vs. renting. 

If we were starting from scratch today, I might be more tempted to rent because house prices have gotten so high. 

Plus the freedom to move around.

We recently contemplated buying a cute two-bedroom house near us and turning it into a rental, only instead of having just one renter for the whole thing, rent the bedrooms separately.

There's a huge market for this kind of thing, and you can make more money renting the rooms separately.

Ultimately, we decided we didn't want the hassle and maybe profiting only $12,000 a year when the mortgage, insurance and taxes is added.

[Frozenbeernuts 2,333]

When you rent, you pay more each month than what the entirety of mortgage + taxes would be. The renter has to make money, so they aren't charging you less than what they would pay.

[supermike80 2,092]

The "high interest rate" stuff bugs me a bit.  In 1998, when we bought our house, we signed for a 30 year at 7%.  I mean it wasnt crippling, but now, rates are slightly lower than that and I see too many articles claiming this is a big reason no one can afford a home.

It's deeper than that I think

[WhiteWonder 2,931]

2 hours ago, supermike80 said:

The "high interest rate" stuff bugs me a bit.  In 1998, when we bought our house, we signed for a 30 year at 7%.  I mean it wasnt crippling, but now, rates are slightly lower than that and I see too many articles claiming this is a big reason no one can afford a home.

It's deeper than that I think

youre not factoring in average home prices in 1998 vs now, what % down payment people were affording back then vs now, etc.  If you wind up having to take out a much larger mortgage, 6-7% will hurt a lot more than it did in 1998. Also, people got used to the 3-4% rates we were seeing from 2015-2021 ish. I think additionally a lot of people buying homes in the 1990's had benefited tremendously from the 8-12%+ interest rates on their bank products during the 80's. A lot of people have told me they could have lived off their monthly interest back then so my assumption is that time period allowed a lot of people to quickly build up their down payments. 

I do agree that I don't think it's crippling and I don't think its one of the main reasons people can't afford homes. 

[supermike80 2,092]

8 minutes ago, WhiteWonder said:

youre not factoring in average home prices in 1998 vs now, what % down payment people were affording back then vs now, etc.  If you wind up having to take out a much larger mortgage, 6-7% will hurt a lot more than it did in 1998. Also, people got used to the 3-4% rates we were seeing from 2015-2021 ish. I think additionally a lot of people buying homes in the 1990's had benefited tremendously from the 8-12%+ interest rates on their bank products during the 80's. A lot of people have told me they could have lived off their monthly interest back then so my assumption is that time period allowed a lot of people to quickly build up their down payments. 

I do agree that I don't think it's crippling and I don't think its one of the main reasons people can't afford homes. 

In the early 2000's, wife and I would see these huge houses all over and we woud think "who can afford these" Turns out not as many as was sustainable.

Seems like the same situation again.

[Nomad99 814]

18 hours ago, Bier Meister said:

@mmmmm...beer

 

we will likely downsize and look to buy 2 properties:

I am looking around northern Italy and the other is still ambiguous (tropical locale).

 

coming from Northern California, this is very doable for us 

Georgia Meloni is bada$$🥰

[Maximum Overkill 2,453]

I'm selling my Aiken house/ranch if anyone is interested. I don't need 3 homes and 4 rental properties anymore.