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catoismymotor (39.02)

Why I Am Never Going to Own a Home Again - From Yahoo! Financial

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March 21, 2011 – Comments (19)

Why I Am Never Going to Own a Home Again

WARNING: The tone this author used in writing this opinion piece 'o (bad word) has gotten under my skin, has fueled this rant. 

This is a rebuttal to his little write up.

A) If you are buying a home with the idea of keeping it for 15 years or more who cares?! If you rent you are out all the money regardless. If you keep the home for a long time you stand a chance of breaking even or making a little money. If you bought at the height of the bubble I can see where you would be scared, are making decisions with your fight or flight instincts instead of using critical thinking skills.

B) Ditto for A. All of us know that closing costs are a scam. They are just part of the game you play if you choose to own a home. Stop whining. Take steps to fix the problem or STHU!

C) Maintenance? Are you kidding me?! Anything you lord over is going to take maintenace! Yards? Yes. Kids? Yes. Pets? Yes. Cars? Yes. Stock portfolios? Yes! Have you ever had a landlord tell you to stick it, he'll call to have the heat fixed when he is good and ready, will not knock off the rent any costs you take on for repairs because he only uses a guy he trusts for the handy work? I have. I still have him on my *I Hope You Die By Anaconda, You B@s#ard!* list.

D) You never buy a house because of a tax break. If you do you are dumb and deserve to clean horse stalls for a living.

E) If you move just for a job, let someone talk you into buying a house then you get what you deserve. Who does not know that you rent for a year or two while you settle into work, find a part of town you like and a house within your budget?

F) My house is an investment. I have investested time and effort to paint the walls, install new lighting, furnish, adorne it with various flora and fauna to our liking. I ask you what landlord is going to let me put what I want in his yard (flowers and bushes) and keep two large dogs and two cats? You spoke of wasting money in item A. Have you ever heard of a pet deposit? In my experience cats are $300 each dogs are $500 a piece. You don't get that money back. Deposit really means Fee when speaking of pets to landlords. Making a mortgage payment over renting adds to our quality of life.

So, in closing I will say that our family saves money over all by owning than renting. We do not have a large house, enjoy knowing houses 3/4 the size of ours, in our area, rent for more than our mortgage payment. Our payment is fixed for as long as we own the home. I know the in the past few years that home values and rents have been decreasing, but this is not the norm. In a normal economy you can count on paying an increase in rent every year or two. Unless you are saddled with a ARM you will win by having a mortgage.

 

19 Comments – Post Your Own

#1) On March 21, 2011 at 3:25 PM, whereaminow (21.14) wrote:

Cato,

Great blog. 

I came across this peice as well, reposted on Robert Wenzel's great blog Economic Policy Journal.

I had similar thoughts as you. I'm pro-home ownership if you can afford it. I think it provides economic freedom, especially if you don't have a mortgage. Both renting and ownership have their advantages. It's very subjective..

In reference to D) tax breaks, I hear that alot. I don't think people understand that tax breaks are arbitrary and can be cancelled at any moment.  In fact, wasn't there some talk recently about ending mortgage deductions on income tax returns?

That same logic applies to investment tax breaks. Those are also arbitrary and can disappear whenever the state changes its mind.

It's a dependency on others that I'm not very fond of. 

David in Qatar 

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#2) On March 21, 2011 at 4:10 PM, Turfscape (44.40) wrote:

Cato wrote:
"The tone this author used in writing this opinion piece 'o (bad word) has gotten under my skin, has fueled this rant."

Ugh. I knew I shouldn't have clicked on that and read the column...but I just couldn't help myself.

Why must it be one or the other for everyone? Homeownership wasn't for him...therefore it's not for anyone, ever, for all time throughout history, amen dammit!

Arrogant (insert explative here).

Why, oh why, can't there be just a few more reasonable people walking the earth?

How difficult is it, really? Renting works for some...homeownership works for some. What saddens me most is that this guy apparently gets to refer to himself as some sort of financial professional.

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#3) On March 21, 2011 at 4:12 PM, catoismymotor (39.02) wrote:

...wasn't there some talk recently about ending mortgage deductions on income tax returns?

Yes. I think there is some energy building to have it end in 2012/13.

In your profession I can see where renting makes sense. If I remember correctly you work on contract, need to go where the work is. That would make having a mortgage difficult.

You are right, the subject is very subjective. I just think if you know you are going to live and work in one area for an extended period of time a mortgage would better serve you than a lease. Of course I am not out to lean on people to buy a house. People need to do what makes them happy. Ed Koch, former mayor of NYC rented a flat on Manhattan when he could have easily purchased a unit when he returned to civilian life. Why? I dunno. I guess for him it made sense.

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#4) On March 21, 2011 at 4:31 PM, catoismymotor (39.02) wrote:

Why must it be one or the other for everyone? Homeownership wasn't for him...therefore it's not for anyone, ever, for all time throughout history, amen dammit!

Well put.

Why, oh why, can't there be just a few more reasonable people walking the earth?

I'll take a stab at this one. Reason implies a need to think. Most people are not taught how to think (critical thinking). So most people are walking around without the ability. Everyone knows how to feel. They feel this way about this and that way about that. They lean on being able to feel to make up for their inability to think. Thus you end up with a *If It Feels Good Do It* population. Paying a mortgage did not feel good to Altucher, so he will not do it and feels good telling others to stay away from this perceived danger.

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#5) On March 21, 2011 at 4:47 PM, SockMarket (40.70) wrote:

I wonder if they swore of thinking too...

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#6) On March 21, 2011 at 4:51 PM, lemoneater (81.83) wrote:

How many apartments allow you to put peach trees in the yard and plant corn? :) Every summer my husband says he wants a condo because he gets tired of mowing grass. Poor man.

Our first apartment was something else. We had a really crabby neighbor who sadly seemed paranoid. She called security on my in-laws who couldn't be more respectable in appearance. I laughed hysterically when I heard. If we ate on the deck which belonged to both apartments, she would glare at us from the window which didn't help our digestion. We couldn't move fast enough once there was an opening elsewhere in the complex.

Whether to rent or to buy is very much an individual choice with all kinds of factors. Space, functionality, cost, friendliness of neighbors, safety, skill with home improvement, desire to garden or have pets, etc.

 

 

   

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#7) On March 21, 2011 at 4:58 PM, Borbality (46.86) wrote:

I don't understand this: I have some stories about owning a home. One of them is here: “What It Feels Like to be Rich” where I describe my complete path into utter depravity and insanity. The other one is still too personal. Its filled with about as much pain as I can fit onto a page. Oh, I have a third one also from when I was growing up. But I don’t want to upset anyone in my family so I’ll leave it out. Oh, I have a fourth story that I just forgot about until this very second. 

I even read the "what if feels like to be rich" and don't understand it. 

Sounds to me like he made some mistakes and is now coming up with lame reasons to say home ownership is bad instead of blaming himself for getting hosed.

 

we got hosed a little by buying a house in 2008, and it's nobody's fault but our own. it's a house we can still afford despite whatever the rest of the neighborhood is selling for, and our payment is already almost even (a little higher) than the average rental of its size in our area.

 I wouldn't have done it again but I was impatient and young(er) and didn't really know any better. i consider it a good lesson.


Also i think we will still come out ahead over the long term, and there's something to be said for living in a place you like and having control and a stake in it. It's also nice to know you can pay it off and not worry about a payment or landlord.  

 

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#8) On March 21, 2011 at 5:31 PM, Turfscape (44.40) wrote:

Cato wrote:
"Most people are not taught how to think (critical thinking). So most people are walking around without the ability. Everyone knows how to feel. They feel this way about this and that way about that."

Eloquently stated.

"Thus you end up with a *If It Feels Good Do It* population."

Hey, I remember that episode of The Simpsons..."be like the boy, be like the boy"

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#9) On March 21, 2011 at 5:36 PM, rfaramir (29.31) wrote:

James Altoucher's reasons are all true, and for some they are sufficient. But his attitude stinks. And trying to make this the definitive statement for everyone is tremendously stupid, as y'all have mentioned above: David's "Both renting and ownership have their advantages", lemoneater's "Whether to rent or to buy is very much an individual choice with all kinds of factors".

I won't defend him, but I can see this as a reaction against the government trying to force people to choose to buy. Mortgage deductions (which I benefit from), Community Reinvestment Act (enabling ACORN to extort banks to loan to people who can't pay back), money supply inflation to keep mortgage rates low, etc.

The nanny state is trying to mold people into model citizens. This is very irritating to many. And disadvantageous to those who aren't suited to the owning lifestyle.

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#10) On March 21, 2011 at 5:52 PM, wasmick (< 20) wrote:

Many of the points in the attached article are completely incorrect.  Some are too personal to be relevant to everyone, individual circumstances vary too widely for any one answer to suitable for all.

 As a real estate investore I'm thrilled that he doesn't understand RE, that leaves more opportunity for rthe rest of us.  Of all the things he got wrong, the most notable is his assertion is that housing values returned .04%.  he's off by a factor of 100. 

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#11) On March 21, 2011 at 6:22 PM, chk999 (99.97) wrote:

Excellent blog Cato!

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#12) On March 21, 2011 at 6:24 PM, kdakota630 (29.50) wrote:

+1 rec from me.

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#13) On March 21, 2011 at 6:28 PM, kdakota630 (29.50) wrote:

I might add that my wife and I are currently looking to purchase our first house, and I plan on keeping it for more than 15 years.  In fact, I keep telling people that after we move into that house that I never plan to move again and plan on dying there. 

I should probably stop telling people that I plan on dying there because people are probably picturing me laying dead in the middle of the living room, or worse.

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#14) On March 21, 2011 at 6:34 PM, ChrisGraley (29.69) wrote:

A few more people like him would be a good sign to get back into  the RE market.

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#15) On March 21, 2011 at 10:57 PM, outoffocus (22.84) wrote:

Well it seems like all the other points I would have covered have already been covered in the other comments or the original post.  So I'll just say this.  Only during market extremes do pundits like this get an audience.  I find it funny that when the housing market was peaking, anyone who rented was an idiot, regardless of financial, emotional, or job situation.  Now that the housing market is in a slump, the media wants to make current homeowners look like idiots.  Its all sensationlism to get ratings (or clicks in this case).  Its just funny that it seems that these type of articles always seem to run contrary to common sense.

Heck if anything, I'm looking forward to buying soon because the market is so bad.  But hey, scare all the buyers out, better prices for me. =)

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#16) On March 22, 2011 at 1:47 AM, awallejr (85.41) wrote:

...wasn't there some talk recently about ending mortgage deductions on income tax returns?

Yes. I think there is some energy building to have it end in 2012/13.

Ironic how Obama said he would never raise taxes on the middle class, yet removing this deduction (which is probably the only real deduction worthwhile to the middle class) in effect raises taxes.  If this passes boot out the politicians who voted for it.

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#17) On March 22, 2011 at 6:46 AM, outoffocus (22.84) wrote:

Prepare for the coming increase in taxes

The mortgage interest tax deduction isnt just going away because we need to raise taxes.  Its going away because Congress no longer has a use for it...

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#18) On March 22, 2011 at 10:18 AM, miteycasey (30.59) wrote:

The guy has an interesting blog.

I think by defination successful people are 'different' from average people and he is one example. They see the world differently, positively or negatively, and react accordingly.

 

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#19) On March 22, 2011 at 11:41 AM, RRobertsmith (< 20) wrote:

If "your house is an investment" and it goes down in value 20-30% (of a very big number, over a 2-3 year period) people will laugh...and you will feel like you have made the worst investment of your life.   My advice is quite simple...RENT, (or keep on renting) the RE market moves very, very, slowly and it is finding a bottom.   DO NOT BUY HERE!...points to graph year 2011

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