Are the benefits of buying a home overrated?

Shanelle Missy · Joined: 29 Sep 2009 Posts: 11

Underrated. People make a mistake to think of a home as only a financial investment. Of course, it is that and an excellent tax write off. Rent is money down the toilet. You have to be smart and get a 30 year fixed loan. When I told my son in law that a year or two ago he said "that's old thinking, no one does that now..." I don't think I need to explain how I WAS right. Get a 30 year and you can always pay more towards it. Try to pay more each month and reduce the term of the loan. The interest on each hundred dollars a month over 30 years adds up. Play around on a mortage calculator.
What I like about owning a home is that it is OURS. We have it forever and whatever else might happen financially, we always have a place to live. And we can decorate it the way we want. And we can hang as many picture as we want and not have to worry about a landlord. We can have as many pets as we want.So, the benefits are financial and psychological. The housing market is weak right now and you can get a good deal.

mortgage-experts · Joined: 18 Oct 2009 Posts: 3

I agree with some of your points about the benefits of a house, which are that it is yours and you can change whatever you want without feeling like you're doing something wrong. I also feel like owning a house sometimes IS overrated though, and that a big point homeowners will try to make is that a house is an investment, but oftentimes the value of the house goes down instead of up. House values can't always go up, that is the idea that created the housing market bubble. Anyway just my two cents. :D

JPowell · Joined: 20 Jan 2010 Posts: 103 Location: PA

I think there's too much pressure put on the monetary value and not enough on the personal value.

Sure a house may drop in value on the market like you said Mortgage-experts but on a personal level it is so much more than ant rental unit could ever be.

I hate living in an apartment personally. I can't decorate, I don't like putting things on the wall, I feel terrible every time my son bumps a toy into the wall and it leaves a mark because I have to live with it and can't repaint the wall because of the lease.

Owning a home is so much better.

johncollins · Joined: 26 Jan 2010 Posts: 7

There are times when renting makes much more sense, from both investment and personal value prespective. Look at Vancouver for example, the average home there costs over 9 times the average yearly salary. Even with these super-low interest rates it's much cheaper to rent than to buy there. This is unsustainable and anybody buying there today is a fool from financial prespective. Once these "home investments" turn sour, the financial disaster turns into a full-blown personal disaster.

Another thing new buyers never consider is the costs that go "down the toilet" associated with homeownership (or should I call it mortgage ownership?). You can rent a property in Vancouver that costs 1M for $2,500 per month. The taxes alone on this property will be around 10K per year and on top of that you have the maintenance costs, etc.

JPowell · Joined: 20 Jan 2010 Posts: 103 Location: PA

Taxes definitely get pushed to the back of people's minds and then land them in trouble later. That's a really good point John!

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

In today's market you really need to have more reasons to buy a house than simply as an investment. It's possible what you buy today may be worth the same amount in 10 years, and you might have saved money renting.

valoannetwork · Joined: 21 Feb 2010 Posts: 8

In a lot of cases buying a house is a terrible investment. Every situation is different.

Biggest mistake I see is people buying more house than they can afford. Doing this quickly makes the benefits like your comment above mute. "What I like about owning a home is that it is OURS. We have it forever and whatever else might happen financially, we always have a place to live. And we can decorate it the way we want. "

The investment has to make sense at the time of purchase. I'm still seeing way too many people getting in over their heads counting on the market value of their home to increase. That is a bad idea from day one.