Thursday, April 28, 2016

Another Not So Thrifty Purchase - Our Home


I don’t rent.  I have a mortgage that I faithfully pay every month with the idea that someday the place I call home will be mine in every sense of the word.  It is still a ways off, but that is the hope and it was the hope when I signed all those papers in the title office before they handed me the keys.  But if you look at the big picture, buying a house isn't thrifty at all.

First, I had to save up for a down payment.  Then there were a ton of closing fees to contend with.  I had to pay for an inspection so I'd know the house I was buying was relatively sound.  Then I had to buy homeowners insurance.  And twice a year I get a property tax bill.

Then there is the interest I am charged on the mortgage.  LOTS of interest that will total far more than the original price of the house.


Also, if something breaks I have to fix it.  I'm on the hook for all repairs, upgrades and maintenance of my house.  I have to pay for water, sewer and trash removal in addition to the monthly electric bill.  If the water line breaks between the house and the main I am fully responsible for that expense.  Same with the sewer line.  I have to pay rent for the trash bins the city requires us to use.

I have to keep a fence up on my property line.  When the original one fell apart I had to replace it.  I have to keep my trees pruned and healthy.  I have to maintain a lawn and keep it neat so the city doesn't fine me.

When I rented a home I paid an initial deposit, rent, the electric bill for heat and lights plus a small sum each month for renters insurance.  If something broke my landlord fixed it.  When it needed paint or a roof he did that too.  Someone showed up once a week to mow and trim and I did the watering.  Water, sewer and trash was included in my rent.


If I crunch the numbers, and I have, it doesn't make a lot of financial sense to own a home.  I spend much more now than I ever did as a tenant.  Most people who buy a home never end up owning it.  So why do it?

Originally the idea was that I would acquire equity and it would be worth much more in the future.  There are a lot of rules when renting.  I wanted to be able to paint my walls whatever color I wanted.  I didn't want to help pay someone else's mortgage.  I wanted to be a homeowner.


I realize too that homeownership isn't for everyone.  It used to be frowned on a bit, I think, if people weren't inspired or motivated to buy property and were just content to rent.  But I can see the wisdom in it.  It is less money to rent.  Even when we were living in our RV and just renting the land I found after crunching the numbers that it would have been less money to rent an apartment.  We didn't really save anything, even after selling the trailer.  Kind of crazy, huh?


For me, it is worth the extra expenses and responsibility because for the most part I get to do things my way.  And, unless I stop paying my mortgage, no one is going to kick me out.  I got evicted from the last two homes I rented because the landlords sold the properties and both times the closing was contingent on vacancy.  That was no fun and I never wanted to find myself in that position again.

So what are your thoughts?  Is buying a home worth it or is renting a better way to go?



14 comments:

  1. We finally paid off our mortgage and it is wonderful. We have rented several houses in the past and even though it was less expensive than owning, we had some landlords that never fixed anything or wouldn't let me have a garden, etc. I love owning my own home. I love being able to dig up the yard and plant whatever I want, when I want. Even though it is more expensive and we are responsible for all repairs, I love it and wouldn't change it.

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    1. That is pretty much where I'm at with the whole home ownership thing. I like my freedom and if it costs a little more I think it is well worth it.

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  2. We have owned homes for the entire time we have been married and wouldn't trade for renting ever. Home ownership may not be for everyone but I love having a home and yard just exactly how I want it and not how the landlord would like it to be.

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  3. I have always wanted to buy and not rent just for the main reason you stated. I get to do things my way.

    Tania

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  4. I am looking at the rental thing form a different angle now. Mom is older and recently widowed. Though her home has been paid for many years over, a home is a lot for one person. My sister and I both own homes very near to her, but we are unable to do everything she wants done to her house/yard/garden, mainly because we both have homeowner responsibilities of our own and will never be able to keep our own homes and Mom's up to her exacting standards. She can afford to buy a smaller condo with a very manageable yard (no natural areas, no creeks, no 2 acres), Though I think she would be better off renting a place at what she calls Happy Acres, which is a small retirement village close to my house. They have an ornamental garden to piddle in so she could plant a few things to enjoy without the upkeep of home ownership. But downsizing would require her culling her possessions, and that is a different story entirely.

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    1. Anne, I totally get it. My parents cannot take care of their home, yard and have far too much "stuff". They refuse to consider anything else, I choose to leave them alone. It is painful to watch their home, yard and the inside fall apart because they are simply stubborn.

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    2. There are some really nice retirement places and if I was in a situation where I couldn't do it anymore I'd definitely consider one of those. No point letting a lifetime of hard work fall to ruin. But I also understand stubborn. :)

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  5. I have thought about this too. I really think the choice of whether or not to own a home is really all about the person and how much they are able/are willing to put into owning a home, both financially and physically. As you stated there are many advantages and there are many disadvantages to owning a home. And it is the same if a person rents a home- many advantages/disadvantages.
    We are homeowners and we have been for about 15 years. We prefer owning our home because we like our privacy and we like the freedom to do what we like to personalize our home. I also feel that in the long run owning our home is an investment that we will never be sorry for undertaking.
    On the flip side, we have been landlords in the past and there are people who feel the exact opposite as we do and renting suits them better. It really is all about the person/people and their preferences, as well as their abilities. Way back when I was on my own and did not have children I was very glad to rent an apartment (the upper half of a house) where things like some utilities and trash were included. I didn't have to worry about anything besides paying the landlords each month, which was nice because I worked very long hours and did not have to do things like cut the lawn or shovel the snow, and at that time I did not know much about fixing things either, so it was a lifeline to me the few times I needed to call the landlord about a problem in the home.
    I personally think as long as a person is comfortable with their choice and what they are able to do, then the advantages of their situation can outweigh the disadvantages.

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  6. Dawn, you bring up a lot of really great points. At the end of the day it all comes down to what is best for each individual.

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  7. We just payed off our mortgage this year and it feels great. We will leave our home to our daughter as an inheritance. Hopefully we will have saved enough money to fund retirement and not have to dip into the house equity via a reverse mortgage or something similar. I know elders who have had to move into care homes and their children had to sale the house to fund the expense of caring for their parents. I do not want that to be the case in our family. It's an enormous burden. This is why we save our money as best we can. Our home has doubled in price since we bought it and I like the idea that we will never be homeless so long as we are able to pay property taxes each year! Home ownership brings peace of mind to us in that way.

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    1. Congratulations on paying off your mortgage. Going into retirement with no mortgage is my goal as well. I hope to live in my own home until my last day on earth and leaving it to my daughters as an inheritance would be really nice.

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