Housing Market Near You
Quote: odiousgambitglad to hear the decline in value is not a problem ... it's notoriously so for so many stories you hearQuote: DRich
I was interested in moving to Florida to retire but not the area that I am in. I moved here because my parents are here and were in their mid 80's around Covid so we wanted to be able to help them out. I will not be staying in this area once my mother passes and I retire in 2028. We have a bunch of areas on our potential retiree list including Tennessee, Mississippi, South Carolina, North Carolina, and Arkansas. Potentially also the Space Coast of Florida, I really like Melbourne.
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We will be here for probably at least two more years so I hope it comes back some. I do not expect to sell it for what I paid because I know I overpaid. I will be disappointed if I sell it for more than a $100k loss.
Quote: DRichQuote: EvenBobQuote: DRichMy city, Cape Coral Florida, was just announced as the worst housing market currently in the country. I am not surprised as I bought about 3 years ago and the market was stupid high, my house is currently estimated on Zillow for $100k less than I paid three years ago. In my opinion, I overpaid by about $150k when I bought it.
What really sucks is the house I sold in Vegas is up $125k.
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The prices are that way because if people have a choice of living in a sauna or in a hot box they'll take the hot box. Why you moved to live in a sauna is still a mystery.
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I was interested in moving to Florida to retire but not the area that I am in. I moved here because my parents are here and were in their mid 80's around Covid so we wanted to be able to help them out. I will not be staying in this area once my mother passes and I retire in 2028. We have a bunch of areas on our potential retiree list including Tennessee, Mississippi, South Carolina, North Carolina, and Arkansas. Potentially also the Space Coast of Florida, I really like Melbourne.
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Of all those places you named North Carolina is the only one I would ever consider. The southern third of Indiana isn't bad, mild cold weather and the summer isn't bad.
Quote: EvenBobQuote: DRichQuote: EvenBobQuote: DRichMy city, Cape Coral Florida, was just announced as the worst housing market currently in the country. I am not surprised as I bought about 3 years ago and the market was stupid high, my house is currently estimated on Zillow for $100k less than I paid three years ago. In my opinion, I overpaid by about $150k when I bought it.
What really sucks is the house I sold in Vegas is up $125k.
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The prices are that way because if people have a choice of living in a sauna or in a hot box they'll take the hot box. Why you moved to live in a sauna is still a mystery.
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I was interested in moving to Florida to retire but not the area that I am in. I moved here because my parents are here and were in their mid 80's around Covid so we wanted to be able to help them out. I will not be staying in this area once my mother passes and I retire in 2028. We have a bunch of areas on our potential retiree list including Tennessee, Mississippi, South Carolina, North Carolina, and Arkansas. Potentially also the Space Coast of Florida, I really like Melbourne.
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Of all those places you named North Carolina is the only one I would ever consider. The southern third of Indiana isn't bad, mild cold weather and the summer isn't bad.
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Arkansas is the only one in my list where I have not spent much time. If a place averages more than one day of snow a year it is off my list.
Quote: DRich
Arkansas is the only one in my list where I have not spent much time. If a place averages more than one day of snow a year it is off my list.
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While my sample size is admittedly small, my recollection of Arkansas is that it's hot (almost like Phoenix), but muggy and humid. I'm sure some people prefer that to shoulder-high snowdrifts, even if I don't understand it.
Arkansas is still in the tornado belt, but Oklahoma at least has casinos.
edit: Double check that the nearest liquor or package store sells what you want to buy, and is close enough for your tastes. I understand dry counties still exist.
Almost everyone I encountered was either a tourist, had a second home there, or was there working for the season. I'd recommend it for a vacation, but don't think I'd care to live there year-round.
Quote: DieterQuote: DRich
Arkansas is the only one in my list where I have not spent much time. If a place averages more than one day of snow a year it is off my list.
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While my sample size is admittedly small, my recollection of Arkansas is that it's hot (almost like Phoenix), but muggy and humid. I'm sure some people prefer that to shoulder-high snowdrifts, even if I don't understand it.
Arkansas is still in the tornado belt, but Oklahoma at least has casinos.
edit: Double check that the nearest liquor or package store sells what you want to buy, and is close enough for your tastes. I understand dry counties still exist.
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I live in Florida so hot and humid does not bother me. Tornado's are just wind, not scared of wind. Casinos and alcohol are not of much interest to me anymore. I want an inexpensive place to live where it is not cold, near an airport. Find me a nice somewhat modern 3Br 2Ba 2000sqft stand alone house for under $400k so I can buy it outright without touching my retirement money.
Quote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
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Not only that. Home ownership also creates generational wealth.
Quote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
link to original post
Not only that. Home ownership also creates generational wealth.
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That's a good one.
Oh, wait, you are serious.
Quote: DRich
I live in Florida so hot and humid does not bother me. Tornado's are just wind, not scared of wind. Casinos and alcohol are not of much interest to me anymore. I want an inexpensive place to live where it is not cold, near an airport. Find me a nice somewhat modern 3Br 2Ba 2000sqft stand alone house for under $400k so I can buy it outright without touching my retirement money.
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Quote:Detroit, Michigan is often cited as one of the most affordable places to live in the United States. For those looking for housing near a major airport, Detroit Metropolitan Airport rt (DTW) is a key consideration.
There you go, now you're all set.
Quote: rxwineQuote: DRich
I live in Florida so hot and humid does not bother me. Tornado's are just wind, not scared of wind. Casinos and alcohol are not of much interest to me anymore. I want an inexpensive place to live where it is not cold, near an airport. Find me a nice somewhat modern 3Br 2Ba 2000sqft stand alone house for under $400k so I can buy it outright without touching my retirement money.
link to original postQuote:Detroit, Michigan is often cited as one of the most affordable places to live in the United States. For those looking for housing near a major airport, Detroit Metropolitan Airport rt (DTW) is a key consideration.
There you go, now you're all set.
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I think you missed the part where i said moderate weather and no snow. If it wasn't for the weather there are lots of nice parts of Michigan where I could consider living.
Quote: DRichQuote: DieterQuote: DRich
Arkansas is the only one in my list where I have not spent much time. If a place averages more than one day of snow a year it is off my list.
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While my sample size is admittedly small, my recollection of Arkansas is that it's hot (almost like Phoenix), but muggy and humid. I'm sure some people prefer that to shoulder-high snowdrifts, even if I don't understand it.
Arkansas is still in the tornado belt, but Oklahoma at least has casinos.
edit: Double check that the nearest liquor or package store sells what you want to buy, and is close enough for your tastes. I understand dry counties still exist.
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I live in Florida so hot and humid does not bother me. Tornado's are just wind, not scared of wind. Casinos and alcohol are not of much interest to me anymore. I want an inexpensive place to live where it is not cold, near an airport. Find me a nice somewhat modern 3Br 2Ba 2000sqft stand alone house for under $400k so I can buy it outright without touching my retirement money.
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No worries. I expect others may consider Arkansas as well.
As Ron White noted, it's not that the wind is blowing, it's what the wind is blowing. An oak tree crashing through your roof at 120 mph tends to annoy, even with good insurance.
Quote: gamerfreakTrying to figure out if I want to wait until the economic shoe drops, or find somewhere else to live.
Is it still this bad everywhere?
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The 'economic shoe' isn't going to drop any time soon. Home prices are only going to increase.
Compared to NYC, only 90 miles away, where parking spaces have sold for between $250K and $1 million, those home prices are a steal. Investors here, who purchase homes to rent, are looking toward Philly and the Carolinas. You may be competing against them.
Quote: billryanQuote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
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Not only that. Home ownership also creates generational wealth.
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That's a good one.
Oh, wait, you are serious.
link to original post
Yes
'Homeowners Are Now 43 Times Wealthier Than Renters'
Generational wealth: According to the Federal Reserve, American homeowners possess nearly $35 trillion in home equity.
Quote: TankoQuote: billryanQuote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
link to original post
Not only that. Home ownership also creates generational wealth.
link to original post
That's a good one.
Oh, wait, you are serious.
link to original post
Yes
'Homeowners Are Now 43 Times Wealthier Than Renters'
Generational wealth: According to the Federal Reserve, American homeowners possess nearly $35 trillion in home equity.
link to original post
My parents bought this house in 1960 for $9,500. I bought it from my dad in the 1980s on a no interest land contract for what he paid for it in 1960. So this house has been in my family for 65 years and it's worth slightly more today than I paid for it. More than slightly. And I'm leaving it to one of my kids. Generational wealth.
Quote: TankoQuote: billryanQuote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
link to original post
Not only that. Home ownership also creates generational wealth.
link to original post
That's a good one.
Oh, wait, you are serious.
link to original post
Yes
'Homeowners Are Now 43 Times Wealthier Than Renters'
Generational wealth: According to the Federal Reserve, American homeowners possess nearly $35 trillion in home equity.
link to original post
Do you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
Roughly 65% of US homes are mortgaged.
The average mortgage in 2024 was $2200.
Banks and mortgage companies skew the numbers by including the outliers. Subtract Elon Musk's and Bill Gates' wealth from the homeowners and what does it drop to? Eliminate the "renters" who depend entirely on subsidies to live, and the net worth of renters increases significantly.
If you add up the numbers one way, the average American is a millionaire, as the net worth of all individuals divided by the population in the US is roughly $1,100,000.
If you look at the median wealth, it is less than $200,000
Statistics and numbers don't lie, but they can be easily manipulated.
Buying a $500,000 house with a 20% down payment and a 7% mortgage will cost roughly $800,000 over thirty years, plus you will have thirty years of taxes and upkeep on the house. How many ovens, water heaters, oil burners, air conditioners, and windows will need replacing? How much will thirty years of landscaping and snow removal cost? How often will you be painting?
Renters don't have any of that, usually lay out less money each month, and get access to pools and health clubs.
So Mom and Dad spend a million and a half dollars supporting a house that their children will sell for between a million and a million and a half. Is that really generational wealth?
How about a young couple who saves up $100,00 and opens a small business. They rent for a few years and plow the savings in their monthly payments into the business.
Which is a better path to generational wealth?
Pay yourself, not the bank. Wait a few years and you'll be able to buy the home of your dreams, not some starter house you'll outgrow.
Home ownership is great, but having a thirty year mortgage isn't.
Quote: billryanDo you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
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Homeowner net worth probably is $430K by now.
The Federal Reserve conducts a national 'Changes in Finances' survey every three years. The 2025 survey is underway.
This is the 2022 survey. https://www.federalreserve.gov/publications/files/scf23.pdf
Scroll down to page 12 and see 'Table 2. Family median and mean net worth, selected characteristics of families, 2019 and 2022 surveys'
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
Quote: EvenBobQuote: TankoQuote: billryanQuote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
link to original post
Not only that. Home ownership also creates generational wealth.
link to original post
That's a good one.
Oh, wait, you are serious.
link to original post
Yes
'Homeowners Are Now 43 Times Wealthier Than Renters'
Generational wealth: According to the Federal Reserve, American homeowners possess nearly $35 trillion in home equity.
link to original post
My parents bought this house in 1960 for $9,500. I bought it from my dad in the 1980s on a no interest land contract for what he paid for it in 1960. So this house has been in my family for 65 years and it's worth slightly more today than I paid for it. More than slightly. And I'm leaving it to one of my kids. Generational wealth.
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That is awesome. Does your kid live in the area now?
Quote: DRichQuote: EvenBobQuote: TankoQuote: billryanQuote: TankoQuote: AxelWolfI thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters.
link to original post
Not only that. Home ownership also creates generational wealth.
link to original post
That's a good one.
Oh, wait, you are serious.
link to original post
Yes
'Homeowners Are Now 43 Times Wealthier Than Renters'
Generational wealth: According to the Federal Reserve, American homeowners possess nearly $35 trillion in home equity.
link to original post
My parents bought this house in 1960 for $9,500. I bought it from my dad in the 1980s on a no interest land contract for what he paid for it in 1960. So this house has been in my family for 65 years and it's worth slightly more today than I paid for it. More than slightly. And I'm leaving it to one of my kids. Generational wealth.
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That is awesome. Does your kid live in the area now?
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Two live out of state the youngest one is 20 mi away.
Quote: Tanko
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
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That sounds about right. I've never known anybody who rents to have any kind of money. In fact all they complain about is that they're broke all the time from paying rent. It's one of the major reasons I left California. I rented the seven years that I lived there and I came to realize that I was never going to be able to afford a house in Santa Barbara. This was an early '80s and prices were outrageous. If you owned property in Santa Barbara they treated you like you were royalty. I knew a woman who got the house in a divorce settlement but she couldn't afford the mortgage payments so she renovated the garage on the property and lived in that and rented the house to make the mortgage payments.
Quote: TankoQuote: billryanDo you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
link to original post
Homeowner net worth probably is $430K by now.
The Federal Reserve conducts a national 'Changes in Finances' survey every three years. The 2025 survey is underway.
This is the 2022 survey. https://www.federalreserve.gov/publications/files/scf23.pdf
Scroll down to page 12 and see 'Table 2. Family median and mean net worth, selected characteristics of families, 2019 and 2022 surveys'
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
link to original post
The median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that. They can borrow against it, but the idea is grow wealth, not debt.
If you want to create generational wealth, start a business and get your family involved in it.
I'd be interested in how the 2/3rds of homeowners with mortgages stack up against renters. It appears the majority of them will be well below $400,000 net worth.
It's not owning vs. renting. It's paying rent vs. paying a mortgage plus all the other cost that come with home ownership.
Quote: EvenBobQuote: Tanko
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
link to original post
That sounds about right. I've never known anybody who rents to have any kind of money. In fact all they complain about is that they're broke all the time from paying rent. It's one of the major reasons I left California. I rented the seven years that I lived there and I came to realize that I was never going to be able to afford a house in Santa Barbara. This was an early '80s and prices were outrageous. If you owned property in Santa Barbara they treated you like you were royalty. I knew a woman who got the house in a divorce settlement but she couldn't afford the mortgage payments so she renovated the garage on the property and lived in that and rented the house to make the mortgage payments.
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I know some people that rent that are financially comfortable, have savings, IRA's, and 401k's but I would agree the majority are not. As I think about it, most of them that are comfortable do not have kids.
Quote: billryanQuote: TankoQuote: billryanDo you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
link to original post
Homeowner net worth probably is $430K by now.
The Federal Reserve conducts a national 'Changes in Finances' survey every three years. The 2025 survey is underway.
This is the 2022 survey. https://www.federalreserve.gov/publications/files/scf23.pdf
Scroll down to page 12 and see 'Table 2. Family median and mean net worth, selected characteristics of families, 2019 and 2022 surveys'
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
link to original post
The median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that. They can borrow against it, but the idea is grow wealth, not debt.
If you want to create generational wealth, start a business and get your family involved in it.
I'd be interested in how the 2/3rds of homeowners with mortgages stack up against renters. It appears the majority of them will be well below $400,000 net worth.
It's not owning vs. renting. It's paying rent vs. paying a mortgage plus all the other cost that come with home ownership.
link to original post
I think the main difference is that people today overspend on everything instead of saving money. People spend over $50 a week on Starbucks coffee which just flabbergasts me. You can make a cup of coffee at home for about $0.25. Many are more interested in splurging now instead of saving for a rainy day. I was shocked when I saw the average new car payment is over $750 a month.
Quote: DRichQuote: billryanQuote: TankoQuote: billryanDo you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
link to original post
Homeowner net worth probably is $430K by now.
The Federal Reserve conducts a national 'Changes in Finances' survey every three years. The 2025 survey is underway.
This is the 2022 survey. https://www.federalreserve.gov/publications/files/scf23.pdf
Scroll down to page 12 and see 'Table 2. Family median and mean net worth, selected characteristics of families, 2019 and 2022 surveys'
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
link to original post
The median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that. They can borrow against it, but the idea is grow wealth, not debt.
If you want to create generational wealth, start a business and get your family involved in it.
I'd be interested in how the 2/3rds of homeowners with mortgages stack up against renters. It appears the majority of them will be well below $400,000 net worth.
It's not owning vs. renting. It's paying rent vs. paying a mortgage plus all the other cost that come with home ownership.
link to original post
I think the main difference is that people today overspend on everything instead of saving money. People spend over $50 a week on Starbucks coffee which just flabbergasts me. You can make a cup of coffee at home for about $0.25. Many are more interested in splurging now instead of saving for a rainy day. I was shocked when I saw the average new car payment is over $750 a month.
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That's another number skewed by Teslas and Navigators.Honda and Toyota have .any leases under $400.
Quote: DRich
I think the main difference is that people today overspend on everything instead of saving money. People spend over $50 a week on Starbucks coffee which just flabbergasts me. You can make a cup of coffee at home for about $0.25. Many are more interested in splurging now instead of saving for a rainy day. I was shocked when I saw the average new car payment is over $750 a month.
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My youngest daughter and her husband make over $200,000 a year and they're always broke. They are hugely in debt because they don't manage money properly. They buy their teenage kids anything they want, eat out three or four times a week, if they want something they just buy it and now they have so much credit card debt they're thinking about bankruptcy. I don't understand how people live that way and you can't tell them anything, their eyes just roll back in their head and they pretend they're asleep. My wife has strict instructions not to loan them any money because they'll just blow it as they've done in the past.
Quote: billryan
...It's not owning vs. renting. It's paying rent vs. paying a mortgage plus all the other cost that come with home ownership.
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Include in that- lost investment income from not having the cash you paid invested in the markets. The condo I rent in LV now, I could write a check and purchase. But the divs I would lose from not having that cash properly invested would just about cover the rent, and add to that common charges and property taxes I am now responsible for- no way, purchasing is not even close to justifiable.
Quote: billryanThe median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that.
link to original post
The Fed survey indicates median net worth, not the median value of the equity homeowners have in their home.
You are assuming homeowners don't own any assets aside from their homes. Home ownership doesn't exclude anyone from owning businesses, having retirement plans and investing in stocks and bonds and investment properties.
Quote: TankoQuote: billryanThe median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that.
link to original post
The Fed survey indicates median net worth, not the median value of the equity homeowners have in their home.
You are assuming homeowners don't own any assets aside from their homes. Home ownership doesn't exclude anyone from owning businesses, having retirement plans and investing in stocks and bonds and investment properties.
link to original post
The biggest thing is owning your home outright when you retire. This is what everybody shoots for and it's a huge deal. You don't want to be paying rent from your retirement income. In the old days people would typically pay off their mortgages in their late 40s early 50s and they would have a mortgage party where they would burn it in front of everybody. Because it meant their retirement was almost a sure thing. I paid off this house in the '80s when I was in my 40s and I was thinking about this then. I paid rent for seven years and I absolutely hated it. Not having to pay rent has so many benefits I'm not even going to try and list them. So I have to pay property taxes, so what. You think the property taxes on whatever you rent isn't being figured into how much you pay every month? Of course it is. You think all the other expenses of owning a home aren't figured into your rent every month? Of course they are. One of the biggest reasons people moved into this country from Europe was because they were not allowed to own property there, it was all owned by the rich people. That's what the American dream is, and it still is.
Quote: TankoQuote: billryanThe median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that.
link to original post
The Fed survey indicates median net worth, not the median value of the equity homeowners have in their home.
You are assuming homeowners don't own any assets aside from their homes. Home ownership doesn't exclude anyone from owning businesses, having retirement plans and investing in stocks and bonds and investment properties.
link to original post
You are right. Owning a home doesn't prevent you from doing any of those things. Having a mortgage makes it much harder and usually results in having much less money to do any of those things, but it doesn't prevent them.
Quote: billryanQuote: DRichQuote: billryanQuote: TankoQuote: billryanDo you honestly believe the average homeowner has a net worth of $430,000 and the average renter has a net worth of $10,000?
If so, I have a bridge that will compliment your portfolio perfectly.
link to original post
Homeowner net worth probably is $430K by now.
The Federal Reserve conducts a national 'Changes in Finances' survey every three years. The 2025 survey is underway.
This is the 2022 survey. https://www.federalreserve.gov/publications/files/scf23.pdf
Scroll down to page 12 and see 'Table 2. Family median and mean net worth, selected characteristics of families, 2019 and 2022 surveys'
It shows the median net worth for homeowners in 2022 was $392.6K, and $10.4K for renters.
Three years earlier, homeowner net worth was $295.5K and $7.3K for renters
link to original post
The median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that. They can borrow against it, but the idea is grow wealth, not debt.
If you want to create generational wealth, start a business and get your family involved in it.
I'd be interested in how the 2/3rds of homeowners with mortgages stack up against renters. It appears the majority of them will be well below $400,000 net worth.
It's not owning vs. renting. It's paying rent vs. paying a mortgage plus all the other cost that come with home ownership.
link to original post
I think the main difference is that people today overspend on everything instead of saving money. People spend over $50 a week on Starbucks coffee which just flabbergasts me. You can make a cup of coffee at home for about $0.25. Many are more interested in splurging now instead of saving for a rainy day. I was shocked when I saw the average new car payment is over $750 a month.
link to original post
That's another number skewed by Teslas and Navigators.Honda and Toyota have .any leases under $400.
link to original post
Yes, leases have smaller payments than purchases but I think the $750 was for new car purchase. A $35,000 car is $700 a month at 7.4% interest which seems typical now for a 5 year loan.
Quote: EvenBobQuote: TankoQuote: billryanThe median price for a house is $500,000, and a third of homes are mortgage free. That puts the average mortgage owners net worth at just about the equity they own on their house, but they don't really own that.
link to original post
The Fed survey indicates median net worth, not the median value of the equity homeowners have in their home.
You are assuming homeowners don't own any assets aside from their homes. Home ownership doesn't exclude anyone from owning businesses, having retirement plans and investing in stocks and bonds and investment properties.
link to original post
The biggest thing is owning your home outright when you retire. This is what everybody shoots for and it's a huge deal. You don't want to be paying rent from your retirement income. In the old days people would typically pay off their mortgages in their late 40s early 50s and they would have a mortgage party where they would burn it in front of everybody. Because it meant their retirement was almost a sure thing. I paid off this house in the '80s when I was in my 40s and I was thinking about this then. I paid rent for seven years and I absolutely hated it. Not having to pay rent has so many benefits I'm not even going to try and list them. So I have to pay property taxes, so what. You think the property taxes on whatever you rent isn't being figured into how much you pay every month? Of course it is. You think all the other expenses of owning a home aren't figured into your rent every month? Of course they are. One of the biggest reasons people moved into this country from Europe was because they were not allowed to own property there, it was all owned by the rich people. That's what the American dream is, and it still is.
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One of the reasons people are paying of their mortgage later is because many people keep purchasing new homes as they get a better income. In the old days the majority of people bought one house and lived in it until retirement. I a guilty too, I am living in the third house I have bought.
Quote: DRich
One of the reasons people are paying of their mortgage later is because many people keep purchasing new homes as they get a better income. In the old days the majority of people bought one house and lived in it until retirement. I a guilty too, I am living in the third house I have bought.
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In 1945 my grandparents sold the farm in West Virginia and bought a gigantic house in Delaware 8 miles from the ocean. They paid cash for it because it was 1945 and they had the money from the farm. They were in their 50s and they lived there for the rest of their lives no mortgage no rent, no worries. The funny thing is now being in Delaware that house is worth seven figures. It was gigantic with three floors, with a regular full staircase that went up to the Attic which was the third floor. It was built in 1910 and had dormers on three sides of the roof. Probably went for under $15,000 in 1945.
It's always better to own so long as you can afford your purchase. Different advisors give different figures but I think so long as your monthly cost (P, I, escrows, and HOAs) is <25% of your net, you're in really good shape. Personally, I borrow as much as I can, hold, improve if called for, and sell when the market's high. Risky, yes, but I know the markets and it's just me I have to think of. And by now I have a nest egg sufficient to play $1 keno with and not worry about a loan being called.
For apartments ... are real estate taxes figured into your apartment rent? Kinda, but not in the sense that your rent would be $1,000 without RE taxes but is $1,050 with RE taxes.
Rents are set by the market and have nothing to do with RE taxes or any other expense line item. When modeling a deal, rents have to be sufficient to cover expenses (incl. RE taxes), debt service, and generate sufficient return to equity investors (these days on the order of 15% or so). If a new project can't do that, it never gets built.
Existing projects that don't do that see their sale prices go down to dump them, or else they hold and make their equity investors really unhappy with substandard returns. They won't do business with you again.
Quote: SummerlinDaveWhat a great thread! I write mortgages for investors who want to build and/or buy apartment complexes, so here's my $0.02.
It's always better to own so long as you can afford your purchase. Different advisors give different figures but I think so long as your monthly cost (P, I, escrows, and HOAs) is <25% of your net, you're in really good shape. Personally, I borrow as much as I can, hold, improve if called for, and sell when the market's high. Risky, yes, but I know the markets and it's just me I have to think of. And by now I have a nest egg sufficient to play $1 keno with and not worry about a loan being called.
For apartments ... are real estate taxes figured into your apartment rent? Kinda, but not in the sense that your rent would be $1,000 without RE taxes but is $1,050 with RE taxes.
Rents are set by the market and have nothing to do with RE taxes or any other expense line item. When modeling a deal, rents have to be sufficient to cover expenses (incl. RE taxes), debt service, and generate sufficient return to equity investors (these days on the order of 15% or so). If a new project can't do that, it never gets built.
Existing projects that don't do that see their sale prices go down to dump them, or else they hold and make their equity investors really unhappy with substandard returns. They won't do business with you again.
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Investing in real estate is very different than buying a house you intend to live in.
I love buying things at the right price. Almost as much as selling them for a better price. Here is what many people don't think about- if you can afford to buy a single-family house, you can almost always qualify to buy a multi-family unit and get your family into the business of being a landlord.
Twenty years ago, my friends brother bought a three-unit townhouse with a finished basement. His mortgage called for him to live on the property and allowed him to rent out the other two units. Instead, he rented out the three units and lived in the basement. He worked fifty hours a week so it was really just a crash pad. Using the rent from three units and whatever cash he could spare, he paid off the loan in about six years. He used his paid-off investment as collateral on two more three-unit houses and offered a tenant free rent for managing the three properties. He kept his city job until he retired around 55, and moved to Sarasota. He's bought and sold many investments that I'm not aware of, but it all started with his three unit purchase. That is a way to build generational wealth.
Instead I threw some "funny money" outside of my main retirement accounts at some flyers like bitcoin, WalMart, and Google.** Don't get me wrong, I was WAAAYYYY behind the curve and I'm no bitcoin billionaire, but it did the job.
**I also threw some "funny money" at losers like Worldcom, Nortel, and Lucent, so I'm no genius day trader, either!
Quote: SummerlinDaveYou're right, of course, but I never wanted the hassle of managing properties. I did try it early on to try and hold a property in an awesome part of another city that I picked up in the Great Recession. The tenant was fine and it did make a little money but it was just too much hassle for my tastes.
Instead I threw some "funny money" outside of my main retirement accounts at some flyers like bitcoin, WalMart, and Google.** Don't get me wrong, I was WAAAYYYY behind the curve and I'm no bitcoin billionaire, but it did the job.
**I also threw some "funny money" at losers like Worldcom, Nortel, and Lucent, so I'm no genius day trader, either!
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A few years ago when I moved I considered renting out my house instead of selling it. I wish I would have my Vegas house has appreciated about $150k and my Florida house has went down about $100k,
Quote: DRichQuote: SummerlinDaveYou're right, of course, but I never wanted the hassle of managing properties. I did try it early on to try and hold a property in an awesome part of another city that I picked up in the Great Recession. The tenant was fine and it did make a little money but it was just too much hassle for my tastes.
Instead I threw some "funny money" outside of my main retirement accounts at some flyers like bitcoin, WalMart, and Google.** Don't get me wrong, I was WAAAYYYY behind the curve and I'm no bitcoin billionaire, but it did the job.
**I also threw some "funny money" at losers like Worldcom, Nortel, and Lucent, so I'm no genius day trader, either!
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A few years ago when I moved I considered renting out my house instead of selling it. I wish I would have my Vegas house has appreciated about $150k and my Florida house has went down about $100k,
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Being an absentee landlord for one unit is problematic. You can't afford a manager and you end up paying retail for everything that goes wrong. When you get to six or more rentals, hiring a management company is just another expense.
Quote: billryanQuote: DRichQuote: SummerlinDaveYou're right, of course, but I never wanted the hassle of managing properties. I did try it early on to try and hold a property in an awesome part of another city that I picked up in the Great Recession. The tenant was fine and it did make a little money but it was just too much hassle for my tastes.
Instead I threw some "funny money" outside of my main retirement accounts at some flyers like bitcoin, WalMart, and Google.** Don't get me wrong, I was WAAAYYYY behind the curve and I'm no bitcoin billionaire, but it did the job.
**I also threw some "funny money" at losers like Worldcom, Nortel, and Lucent, so I'm no genius day trader, either!
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A few years ago when I moved I considered renting out my house instead of selling it. I wish I would have my Vegas house has appreciated about $150k and my Florida house has went down about $100k,
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Being an absentee landlord for one unit is problematic. You can't afford a manager and you end up paying retail for everything that goes wrong. When you get to six or more rentals, hiring a management company is just another expense.
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I agree. The person who bought it tried to rent it out for $5k a month and was not successful. The last I saw it was listed for about $3900. It would be a nice family house but was overkill for the wife and I.
Quote: KevinAAThe statistic that homeowners have 43 times the net worth of renters is a garbage statistic. In terms of household income, they aren't the same people.
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Correct. It’s not like buying the house increases your net worth. It’s that with a higher net worth you tend to buy a house.
Add this to the latest job reports, and it looks like there will be some nice opportunities soon.
For instance, a three-bedroom, two-bath home with a garage and a carport is listed for $500,000. A buyer can occupy the unit with a $250,000 payment. There is a monthly HOA-type payment, and when the unit is sold or the owner dies, the unit owner pays the remaining $250,000 and splits the profits of the sale with the developer. It's certainly not for everyone, but it allows retirees to live in a nicer lifestyle for the money.
The average homeowner will move three or more times after buying their first house, and spend just under twelve years in a home before purchasing a new one.
The average starter home buyer will move in just over nine years.
Here is where the bad news starts: the typical home mortgage is structured so that 80% of payments go towards interest in the first ten years. If you sell after ten years, you've essentially wasted 80% of your payments. Now you move up in house for your second purchase and reset the interest so you are again paying almost entirely interest for the next few years. After fifteen years of paying a mortgage, the bank has collected nearly the entire purchase price in interest and you still owe more than 80% on your loan. Another year goes by and your family has outgrown the house, and you get to reset the mortgage clock yet again. Twenty years after buying your home, and you've paid more in interest than the house initially cost, and you still have twenty-five years of payments before you own your house.
Is this your best way to build generational wealth?
Quote: billryanSome interesting facts from the BLS
The average homeowner will move three or more times after buying their first house, and spend just under twelve years in a home before purchasing a new one.
The average starter home buyer will move in just over nine years.
Here is where the bad news starts: the typical home mortgage is structured so that 80% of payments go towards interest in the first ten years. If you sell after ten years, you've essentially wasted 80% of your payments. Now you move up in house for your second purchase and reset the interest so you are again paying almost entirely interest for the next few years. After fifteen years of paying a mortgage, the bank has collected nearly the entire purchase price in interest and you still owe more than 80% on your loan. Another year goes by and your family has outgrown the house, and you get to reset the mortgage clock yet again. Twenty years after buying your home, and you've paid more in interest than the house initially cost, and you still have twenty-five years of payments before you own your house.
Is this your best way to build generational wealth?
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I love the leverage and wish I could get more. My interest rate is way less than I’ve been making with investments. It’s a great arbitrage.
