patrick.net

Dog,
Congratulations,
you're the man !

As a current renter who wants to purchase a home I will throw in my 2 cents. BTW, currently paying $2200/mth for a 3 bedroom 3 bath 1500 sqft house in Aptos, CA. $680k for a very similar house on the same block... anyone want to do the math?

Are you hoping to lower your monthly housing costs? No. I would even pay a little more so that we can own pets, paint the walls and landscape like we want to. I would pay a little more if the area was more desirable as well... (i.e. more space between houses, closer to stores or schools)

Do you expect to eventually own, mortgage free? Yes. I would hope to own mortgage free. Seems so far away though.

Do you want the control over your living space that renting does not offer?
Absolutely. This is the key to owning for my family.

Do you want the predictable housing expense that a fixed rate loan provides?
I have fairly predictable housing expenses now. More than I would have if I 'owned' the house. The toilet just had to be replaced and there is a host of plumbing issues plaguing my current rental. I pay nothing for those fixes.

Are you looking for space or location that you can’t get in a rental?
More likely, the most desirable places to purchase (if they are reasonable) do not typically rent out. If they do it is for a short term and you end up moving again. I feel we have more options in purchasing in the 'ideal' location and it would be a long term situation.

Further thoughts:
* Santa Cruz county is so, so, so far out of whack between rental prices and purchasing prices that I am nowhere close to purchasing in this area. As a matter of fact I am looking to get the hell out of California all together and move to a place where housing prices are reasonable to the cost of living I can make. I am not programming engineer and will not be getting a Google or Apple job any time soon. Best to get out of dodge and stop trying to compete with the ridiculous amounts of money around here. It is very exhausting and disheartening.
*I do not view housing as anything other than a place to hang my hat. Since I am not independently wealthy, buying a house to me (since I need a mortgage) is just renting the house from the bank. No more, no less. And with a lot more costs and risks. For me to consider a purchase, I need the risk of losing equity to be low and a stable income. In my area there are neither. Renting is great for me right now.

all of the above accept the monthly housing costs part. That would probably remain about the same when I'm ready to by. The biggest one is control. I find being able to set my own rules very appealing, as a opposed to dealing with some asshole landlord setting one set of rules, then changing them at his whim without telling people, and causing undue stress.

I own for the peace of mind knowing I am in control of my living conditions. I paid cash for my house in 2003 in the midwest after selling my house in LA. I have been self-employed since then. The last year was horrible for work, but at least I have a place to live in.

After I left LA, my old house there doubled in value according to Zillow. The new owner tried to sell it for that price and failed. According to Zillow, it's now worth about what I sold it for. My house here has gained about 20% in value, but I also got it for a bargain.

I don't want to buy. We sold our house during the bubble and have rented since, and are very happy doing so. We've had the freedom to move back to our home state because we weren't tied to underwater real estate. When something breaks, I call the landlord and they fix it.

If at some point prices drop enough that it's attractive again, and assuming our finances are still in good shape, and we can pay cash or get a loan from a trustworthy source...we might buy again. We also have to be pretty sure we're not going to have to or want to move again any time soon after closing.

Right now I think prices are still too high at least in our area. And there's still a lot of mortgage fraud and predatory lending. (80% of this fraud done by the industry according to the FBI: http://www.fbi.gov/publications/financial/fcs_report052005/fcs_report052005.htm ) We still have some years ahead of us to work for a living, and for us that has meant moving for jobs in ohter states sometimes. So, I don't think it's a good time to buy for us, and renting is not some sort of compromise, we actually have come to prefer it. I'm thankful that my research into crime, corruption, politics, etc, early in the decade led me to realize what was going on and avoid being one of the bubble's victims. That has saved our bacon.

I'd like to eventually buy and pay for a place. Why I'd rather own is that I'd rather be able to do what I want and not be answerable to anyone but me. But the reason I rent right now is that even back in 1998 I could see that the box I live in wasn't worth $300k. I am not interested in financing someone else's lifestyle or paying for their bad loans, so I'll wait until their chickens come home to roost and then buy when I can get a decent place on a 3x mortgage.

One word - Space.

Both internal - Enough living space to comfortably raise three or four children.
and external - Enough land for them to run around and play.

Renting can only get you so far, particularly when larger rental spaces (eg single family homes for rent) are 1) harder to come by and two 2) usually offered by an upside owner looking to cover their costs.

I used to feel like everyone else about wanting to own, but then I woke the f*ck up about the reality of the lending business (banking). Granted, I live in a terrible bubble area on the west coast and would not have any issue buying a house in Texas with my current 6 figure salary. However, since I live where I live and I refuse to move away, I have to be sensible about this issue. Home ownership is off the table. End of story. It costs more than double for an equivalent mortgage in my situation. Couple that fact with the inevitable decline of home prices (interest rate increases, excess supply, jobless rate, etc.) and I would have to be committed to an institution if I were to prioritize a god damn gazebo over financial independence (freedom in a capitalist society). Plus, I rent an upscale place in the city - there's not a whole lot I'd do with it anyway.

Nomograph says

You will get a strikingly different answer than you get from the twentysomething renter with a lifetime of earning ahead.

I work with the elderly - I know that this is a different approach to home ownership than many people consider - but it's forced savings. Many of my patients who bought years ago have a home to live in rent-free when they're retired. Many of the old-old didn't make much money, and wasn't able to invest. They're attempting to live on $1,600 or less in RSDI (social security). So their homes, usually modest, not only allow them to live on next to nothing, but also allows them to tap into the equity in the form of a reverse mortgage while not having to move out.

They never would have been able to do so if they hadn't bought a house. The one problem is medicaid estate recovery - people still want to leave their homes to their children and have a problem with the idea of medicaid requiring that the home be sold to pay back the state when they die. But that's for another discussion.

elliemae says

people still want to leave their homes to their children and have a problem with the idea of medicaid requiring that the home be sold to pay back the state when they die

I've consulted with the KGO's Len Tillem assistant on that and he said they're not really doing that. ?

landtof says

I used to feel like everyone else about wanting to own, but then I woke the f*ck up about the reality of the lending business (banking). Granted, I live in a terrible bubble area on the west coast and would not have any issue buying a house in Texas with my current 6 figure salary. However, since I live where I live and I refuse to move away, I have to be sensible about this issue. Home ownership is off the table. End of story. It costs more than double for an equivalent mortgage in my situation. Couple that fact with the inevitable decline of home prices (interest rate increases, excess supply, jobless rate, etc.) and I would have to be committed to an institution if I were to prioritize a god damn gazebo over financial independence (freedom in a capitalist society). Plus, I rent an upscale place in the city - there’s not a whole lot I’d do with it anyway.

So in your situation, don't bleeping buy then.
To the one who said landlords are cheapskates. Look, why do you think the landlord should upgrade anything? She isn't getting the benefit from the upgrade. My experience is many renters are clueless and will break things. So low end/bare bones is better as more features don't mean more reliable.
Case in point, I found the HVAC filter dirty on both sides. The renter thought he can use both sides to get more life out of it!
Another time I got an emergency call, the garage door opener was stuck and she can't get to work.
A few squirts of WD40 was all it took - just lack of lubrication. It is foolish to buy a $400 opener for people that don't know to lube the track once in a while.

I bought my currrent home in 1999. It rode the roller coaster up and down. But there is still 200K equity today, plus or minus. I rented it out for 10 years, all positive cash flow. The previous owner sold to me at a10% loss, so aparently he thought it would not go up in value too.
Get your emotions out of the way.

kt says

landtof says

So in your situation, don’t bleeping buy then.
To the one who said landlords are cheapskates. Look, why do you think the landlord should upgrade anything? She isn’t getting the benefit from the upgrade. My experience is many renters are clueless and will break things. So low end/bare bones is better as more features don’t mean more reliable.
Case in point, I found the HVAC filter dirty on both sides. The renter thought he can use both sides to get more life out of it!
Another time I got an emergency call, the garage door opener was stuck and she can’t get to work.
A few squirts of WD40 was all it took - just lack of lubrication. It is foolish to buy a $400 opener for people that don’t know to lube the track once in a while.
I bought my currrent home in 1999. It rode the roller coaster up and down. But there is still 200K equity today, plus or minus. I rented it out for 10 years, all positive cash flow. The previous owner sold to me at a10% loss, so aparently he thought it would not go up in value too.
Get your emotions out of the way.

Thats is the down side to renters. They feel it is not their job to lube the track or care if the filter causes issues with the HVAC system. For the most part renters suck. There are exceptions though. You are correct in no upgrading things too. That is why I bought instead of rent.

Payoff2011 says

SF ace said “* Having a mortgage over time opens up a new world of access to finance, cheap money, and deductable money….”
Excellent comment. I actually forgot about the fact that mortgage debt makes your FICO score go up and makes it easier to qualify for other loans. I suppose my FICO will go down when my mortgage is paid off.
Great comments from everybody.
As to HOA, I’ve never lived with one. The primary reason I hear people like a HOA community (I’m talking SFH) is the HOA keeps everybody’s property values up because of the rules.

i live in a gated HOA in 95747. houses sell in our park for 15/20% higher than comparable surrounding non gated/hoa homes.

Oh! I don't have to mow the front lawn!
Oh! the pain of submitting a form to have a satellite dish attached to the house!
Oh! the pain of raking in 20% more equity!
Somebody save me from the communist HOA!!

KT - substitute "gazebo" for any other low-priority items mentioned in these posts by others, such as wall paint or what have you. The "nesting" factor seems to be the main reason to buy, sort of understandable, but still not as important when contrasted to financial health in an uncertain time.

In Boca Raton, FL renting a middle-class house costs $1600/month or $20k/yr. I can afford that, but it seems ridiculous to have to spend $20k/yr on rent, when home owners who bought BEFORE 2000 spend about $6k/yr on housing expenses. I'd sure like that $14k/yr in savings.

Of course, I'll continue to rent until prices are sane again, but once it makes financial sense, I'll buy. Probably will be a few more years with how much the correction has been drawn out by government intervention.

In non-bubble times, it makes sense to buy instead of renting. Unfortunately, in Florida we're still in a bubble. The buy threshold I'm looking for is $100 sq/ft for a brand new house.

Btw, in Boca right off of Yamato and I95 some developer is trying to sell townhouses for $300k. That same developer was trying to do this about 3 years ago and gave up when it was clear the bubble busted. Evidently the company didn't learn the lesson. The developer basically just renamed the community to "Centra" (sounds like a vitamin pill) and made some minor floor plan changes. $300k is a lot of money for a single family, detached house. It's ridiculous for a townhouse (formally called row-home) that's directly under the flight pattern of an executive airport.

OCExRenter says

kt says

landtof says
So in your situation, don’t bleeping buy then.

To the one who said landlords are cheapskates. Look, why do you think the landlord should upgrade anything? She isn’t getting the benefit from the upgrade. My experience is many renters are clueless and will break things. So low end/bare bones is better as more features don’t mean more reliable.

Case in point, I found the HVAC filter dirty on both sides. The renter thought he can use both sides to get more life out of it!

Another time I got an emergency call, the garage door opener was stuck and she can’t get to work.

A few squirts of WD40 was all it took - just lack of lubrication. It is foolish to buy a $400 opener for people that don’t know to lube the track once in a while.

I bought my currrent home in 1999. It rode the roller coaster up and down. But there is still 200K equity today, plus or minus. I rented it out for 10 years, all positive cash flow. The previous owner sold to me at a10% loss, so aparently he thought it would not go up in value too.

Get your emotions out of the way.

Thats is the down side to renters. They feel it is not their job to lube the track or care if the filter causes issues with the HVAC system. For the most part renters suck. There are exceptions though. You are correct in no upgrading things too. That is why I bought instead of rent.

In our case, it's kind of the opposite. We are good renters, always pay the rent on time, actually fix things around the house. Make small improvements where we can do so reasonably. Our current landlords don't want to do much of anything, including mowing the front lawn and trimming their trees which is in the lease contract for goodness sake. They are nice enough people but mostly just oblivious. For us, it's a good time to buy. We seem to be the exception.

Dan says

In Boca Raton, FL renting a middle-class house costs $1600/month or $20k/yr.

*snip*

In non-bubble times, it makes sense to buy instead of renting. Unfortunately, in Florida we’re still in a bubble. The buy threshold I’m looking for is $100 sq/ft for a brand new house.

*snip*

$300k is a lot of money for a single family, detached house. It’s ridiculous for a townhouse (formally called row-home) that’s directly under the flight pattern of an executive airport.

Couple questions.

What's typical middle class house you can rent at $1600/mo there in your town? Is it like 10yr old 2000sqft 3/2 SFH?

Bubble in FL is kind of hard to understand as a northern virginian I am, since the situation up here was never been like that. I heard FL housing price got bursted and went down 50% or so, and became reasonable. Isn't that not true in your area? What's the current $/sqft ratie down there?

Dan says

Btw, in Boca right off of Yamato and I95 some developer is trying to sell townhouses for $300k. That same developer was trying to do this about 3 years ago and gave up when it was clear the bubble busted. Evidently the company didn’t learn the lesson. The developer basically just renamed the community to “Centra” (sounds like a vitamin pill) and made some minor floor plan changes. $300k is a lot of money for a single family, detached house. It’s ridiculous for a townhouse (formally called row-home) that’s directly under the flight pattern of an executive airport.

Del Boca Vista Phase II?
I can hear the heavily made up, prada wearing, kate spade toting agent now "don't you understand that its BOCA - its desirable"

seaside says

Dan says

In Boca Raton, FL renting a middle-class house costs $1600/month or $20k/yr.
*snip*
In non-bubble times, it makes sense to buy instead of renting. Unfortunately, in Florida we’re still in a bubble. The buy threshold I’m looking for is $100 sq/ft for a brand new house.
*snip*
$300k is a lot of money for a single family, detached house. It’s ridiculous for a townhouse (formally called row-home) that’s directly under the flight pattern of an executive airport.

Couple questions.
What’s typical middle class house you can rent at $1600/mo there in your town? Is it like 10yr old 2000sqft 3/2 SFH?
Bubble in FL is kind of hard to understand as a northern virginian I am, since the situation up here was never been like that. I heard FL housing price got bursted and went down 50% or so, and became reasonable. Isn’t that not true in your area? What’s the current $/sqft ratie down there?

The two houses I rented were $1600/month.

House 1
----------
http://tinyurl.com/2ca38an
2 bedroom, 2 bath
1614 sq. ft.
looks like it was built in the 1970s
poor a/c, breaks often, needs replacing
sold recently (April) for $184,000
decent, small neighborhood
annoying, intrusive HOA

The owner was asking for over $300k back in 2007, got no offers, and decided to rent.

House 2
----------
3 bedroom, 3 bath
2032 sq.ft.
also bad condition (bathrooms horrible, ceiling fans broken)
last sold in 1992 for $115,800
less quiet, large neighborhood
non-intrusive HOA

shultzie says

Dan says

Btw, in Boca right off of Yamato and I95 some developer is trying to sell townhouses for $300k. That same developer was trying to do this about 3 years ago and gave up when it was clear the bubble busted. Evidently the company didn’t learn the lesson. The developer basically just renamed the community to “Centra” (sounds like a vitamin pill) and made some minor floor plan changes. $300k is a lot of money for a single family, detached house. It’s ridiculous for a townhouse (formally called row-home) that’s directly under the flight pattern of an executive airport.

Del Boca Vista Phase II?

I can hear the heavily made up, prada wearing, kate spade toting agent now “don’t you understand that its BOCA - its desirable“

Is that a Seinfeld reference? http://tinyurl.com/b79gvw

If not, the community is actually called "Centra" and it's on Yamato where the old IBM site's recreation area was. After IBM left, it sold the land and buildings. Mostly a strip mall with a few restaurants, a business complex with various small to mid size companies, and the townhouses that aren't built yet.

With the exception of the airport and train tracks, it would be a good area for housing if the builder hadn't screwed it up with ugly townhomes.

I just want my own bigger personal space... where I have more freedom to do what I want with that space... free from all the distractions/limitations of having wall-to-wall, floor-to-ceiling neighbors around me. I've grown to hate apartments now.

I bought a home with an in-law apartment in July 2007 (hence the screen name "knewbetter") to please my wife and provide a retirement for my parents. My wife and parents love it. I would prefer a 500 sqft 1 room cabin with a composting toilet and a closeline, but its a good house and a good town. I've never considered my primary residence as anything but an expense. I was also heartened by the refinance appraisal that showed we didn't mess up too bad. The house had been on the market for 18 months and 3 buyers had fallen through, so we low-balled and they said uncle.

But of course now I see deals and dream of REALLY screwing people over!

Long story short: I started an orchard. 10 cider apple, 5 peach, plumb and a few apricot. Our garden is about 500sqft. I cut my own firewood from about 6 acres. We've got a pool so now we don't travel in the Summer-everyone comes to us. I can bow hunt in my front yard. My parents now have financial stability and someone who cares enough to take care of their housing. My daughter (I hate the kid excuse) has a home/community and not an apartment. Not to say you can't have both but even if you meet a decent landlord rarely does he own the whole street.

These are all great things, but both sides have a risk. Lots of my forever renter friends have/had more time for 20 something bliss, more chances to take jobs in other states to make great money. Of course most of them invested in the stock market and not in fruit trees. It would be cheaper for me to buy my fruit from the store, but its not the same.