HOUSING: Do you own your own home, rent, or other?

  • HndsmKansan

    Posts: 16311

    May 26, 2009 7:18 PM GMT
    Being the financial planner, my major focus is on investments for my clients, but dealing with taxation is also of extreme importance (I'm a prime example). The mortgage interest write off is soooo very important with federal income taxes.

    So my question.. do you own your own home? Why (purely a financial question), Rent (how long have you rented and do you plan to buy a house)?
    Or do you live with parents, or another family member (and if so, do you pay to do so..... whats your incentive).
    Are you satisfied?

    For me, I love my 4 year old home. Its a work in progress with my bf and myself. While I live there, I consider it his home as well.

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    May 26, 2009 7:38 PM GMT
    Currently renting. Planning to buy in 2 ~ 3 years. Just waiting for the real estate market to normalize around here.
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    May 26, 2009 7:42 PM GMT
    I buy foreclosures....Good way to get into the market of home ownership. I also buy tax repos and bank owned property. Mine is paid for. I am buying and currently looking for others and a second home for me in Hawaii. You see...you can have your cake and eat it too!!

    GO GET A HOUSE...now is the time to BUY!!!

    This is one of the things I do in my spare time. Kill your TV and look for a house!

    Soon inflation will ignite and having solid assets will be key to weatlth preservation.
  • kaccioto

    Posts: 284

    May 26, 2009 7:53 PM GMT
    own 2 (technically 1; but paid off mom's pad), looking for summer home w/hubby..

    that said you can make a strong argument to rent long term given current administration..

    ie proposals under way to limit mortgage interest deduction to 28% for those at higher tax brackets...AMT continues to be 'patched' instead of logically reworked..

    sucks for us folks in NJ, NY, CT where RE taxes are #1, #2, #3 in the country w/ local ci accounted, and we can't deduct state taxes withheld or itemize

    god, don't they know that $250k in NY/NJ doesn't = $250k in Texas/DC/ or even Cali...i need to move west, more bang for the buck.
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    May 26, 2009 8:00 PM GMT
    kaccioto saidown 2 (technically 1; but paid off mom's pad), looking for summer home w/hubby..

    that said you can make a strong argument to rent long term given current administration..

    ie proposals under way to limit mortgage interest deduction to 28% for those at higher tax brackets...AMT continues to be 'patched' instead of logically reworked..

    sucks for us folks in NJ, NY, CT where RE taxes are #1, #2, #3 in the country w/ local CI accounted, and we can't deduct state taxes withheld or itemize

    god, don't they know that $250k in NY/NJ doesn't = $250k in Texas/DC/ or even Cali...i need to move west, more bang for the buck.


    Back east is a Joke...that's why they will sink faster than lead....Tax the poor people to death!
  • kaccioto

    Posts: 284

    May 26, 2009 8:13 PM GMT
    mistic_man said

    Back east is a Joke...that's why they will sink faster than lead....Tax the poor people to death!


    yep, prices here are still relatively insane post-apocalypse..only US town to make it onto the list...

    http://www.cnbc.com/id/29862382/?slide=9

    i could trade my tiny 1br in manhattan, nyc for a comfy 3br/2ba (w/ parking, what a concept!) in manhattan beach, ca...ahhh the relaxed west coast life, now if only i didn't love ny so damn much..
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    May 26, 2009 8:39 PM GMT
    HndsmKansan saidThe mortgage interest write off is soooo very important with federal income taxes.


    Hndms: This is a really important thing. Thanks for mentioning it.

    To any of you younger guys with decent salary who are renting - start looking into and planning for buying a home. There are some headaches and not every market is affordable of course, but if I'd realized what a huge reduction in taxes I'd get from the mortgage interest write off, I would have jumped years before we ended up buying our first house.
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    May 26, 2009 10:01 PM GMT
    Oh yes, I must mention....If your a first time home buyer now is the time. Buy the place and have rommies if you want to spend on Gucci still. The reason I say buy now....FIRST TIME HOME BUYERS GET A TAX CREDIT OF UP TO 12,000.00...that right...check it out!!


  • HndsmKansan

    Posts: 16311

    May 26, 2009 10:38 PM GMT
    One other point.. for you guys that are considering relocation due to a job...
    and you are considering a house.....

    ALWAYS look at the housing market.. the cost of living.. what the economy is in the place you are looking. We are very lucky in Kansas...

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  • UncleverName

    Posts: 741

    May 26, 2009 11:09 PM GMT
    Can someone explain the 'mortgage interest write off' for an underedumacated Canadian? I don't think we have that here (or if we do, it's called something else).
  • GQjock

    Posts: 11649

    May 26, 2009 11:14 PM GMT
    Own .... I have a condo which I am renting out
    and another that I am living in right now

    Not doing anything with them until the market stabilizes
  • rvdredrocks

    Posts: 31

    May 26, 2009 11:40 PM GMT
    mistic_man saidI buy foreclosures....Good way to get into the market of home ownership. I also buy tax repos and bank owned property. Mine is paid for. I am buying and currently looking for others and a second home for me in Hawaii. You see...you can have your cake and eat it too!!

    GO GET A HOUSE...now is the time to BUY!!!

    This is one of the things I do in my spare time. Kill your TV and look for a house!

    Soon inflation will ignite and having solid assets will be key to weatlth preservation.


    This is so true. We probably won't see a better time to buy for a long time.
    Most of the world's great fortunes in modern times have been made by investing in real estate. Find a good agent and put him/her to work.
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    May 27, 2009 12:09 AM GMT
    UncleverName saidCan someone explain the 'mortgage interest write off' for an underedumacated Canadian? I don't think we have that here (or if we do, it's called something else).

    US tax law allows you to deduct your home mortgage interest from your gross income (along with a byzantine assortment of other things). The rationale is to encourage home ownership.
    I'm sufficiently encouraged by this to own my own home plus a vacation condo in Santa Fe.
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    May 27, 2009 12:44 AM GMT
    I own my home (Just paid it off this year... it was a 30 year note and paid it off in 13 years) & I own 3 rental residentials (paid for as well). The mortgage write off increases greatly when you file your taxes as a business off of your personal social security number.. yes you can pay someone to do your taxes for you to tell you this and do the work for you (someone who is qualified). But running your own business you can actually write off your car and home mortgage payments in larger parts ( as well as utility bills & some grocery).

    But back to the real estate aspect... I am actually looking to buy a new house in town and keep our old house. How can you pass up the deals in this current economy?
  • barriehomeboy

    Posts: 2475

    May 27, 2009 12:50 AM GMT
    Hey! Unclevername. As a Realtor in Canada, I can explain that we don't have the mortgage tax writeoff here. It has been proposed several times, to woo voters at election time, but everyone behind the politicians tells them it's a really bad idea for the economy and the country. I forget their reasons.

    As for the train of the forum:

    From an investment perspective, with 2 otherwise equal guys, the guy who rents, and invests all of the money he would have spent on taxes and maintenance, ends up with more equity than the guy who bought when his mortgage is finally paid off.

    In the computer model that concluded that, they found that the money the renter pays to the landlord is pretty equal to the interest the buyer pays to the bank. They're both borrowing to live. That's why banks are richer than all of the landlords combined. That's a whole other rant though.

    After 30 years, the renter who saved ends up with a pile of cash and can go out and pay "cash" for a better house than the guy who bought 30 years earlier.

    That's the computer model though, and few of us are are living in a computer like Keanu (drool) in the Matrix.

    In reality, the renters don't invest the tax and maintenance money. They go on trips or buy a bigger car.

    Houses are not the best investment, but for most people they are an enforced savings plan. The mortgage keeps them from wasting their money on today's fun, and makes TONS of money for the renters who buy bank stocks!



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    May 27, 2009 12:50 AM GMT
    Another thing to think about for first-time buyers: If you don't have much of a down payment, the bank may give you the option of purchasing PMI (property mortgage insurance) that insures the bank against a foreclosure OR skipping the PMI and instead taking a higher interest rate. Look at your options closely. Remember that you can write off that interest payment (which, early on, will be the majority of your house payment) but you can't write off PMI. So taking the higher rate (usually something you'd want to avoid) can result in a bigger tax break.

    (Just throwing this out there because I had to figure that out for myself on our first house.)
  • Fritter

    Posts: 1696

    May 27, 2009 1:35 AM GMT
    I own my own home, but for the first 5 years it was joint ownership with my sister.
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    May 27, 2009 1:40 AM GMT
    Two homes. Not by choice. One in Ohio. The place I worked out there shut down, and I had to move. I found a renter, though--which covers about 2/3 of the mortgage.

    The second I'm about to close on--in Connecticut. I hate renting. I like to be able to manipulate my space as I want. And interest rates are so low right now. I think with all the stimulus, we'll have to raise interest rates in a few years to control inflation, so now is the time to buy.... Unfortunately Connecticut is expensive as heck.
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    May 27, 2009 1:41 AM GMT
    I own my own home. Its the second one I have owned. (well the second one I have paid a bank for the honor of owning.) I did what many have done and "bought-up" during the housing boom in my area on 2005. I made 100k on my first house in 3 years and bought a house for double what my first one was. This house went up another 100k before the big Bust. I doubt I could sell it for what I paid for it now.

    If I could only go back about 1.5 years, sell this house and then rented until now. What a great time to buy!! Guys if you have a stable income and are renting start thinking of buying!!


  • barriehomeboy

    Posts: 2475

    May 27, 2009 2:07 AM GMT
    Did I mention I'm a Realtor?
  • barriehomeboy

    Posts: 2475

    May 27, 2009 2:10 AM GMT
    Over 30 and not very attractive, but I know a lot!
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    May 27, 2009 2:15 AM GMT
    I owned for 12 years with my ex, and we sold just after the peak. Only got 250% of our initial price. I've been renting for the past 2.5 years, and I'm really happy about it. It's great to have someone else to do all the shoveling after all these years!

    Also, I feel like I made my money in real estate, and I don't want to buy until I find someone I want to buy with. Additionally, it's so expensive around here that I couldn't afford to the mortgage on my own, and I've gotten used to living on my own.
  • Csrobbie2000

    Posts: 359

    May 27, 2009 3:32 PM GMT
    I envy people who wait until now to buy because this is almost the perfect time to do it. I bought mine 4 years ago when the market was really high, but I still think it's a good investment in the long run. Why paying someone else mortgage instead of paying your own mortgage? Besides, the tax break and everything does help.
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    May 27, 2009 3:41 PM GMT
    Do you own your own home?
    answer: I just bought my home a year ago.

    Why?
    Answer : I bought it in this bad real estate market and got a great interest rate.
    I had inherited some assets that allowed me to make a sizable down payment.
    I researched renting vs buying in my area and found that I was not spending that much less to rent versus buying ( i even included the escrow stuff, constant home improvements etc)
    The tax benefits received due to being a home owner.


    Am I satisified?
    Answer: Very.. I bought in a depressed market, got a great rate, receiving tax benefits for it and I love the place and where it is located.


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    May 27, 2009 3:44 PM GMT



    We own.

    Unclevername and Barriehomeboy, in the US you get to deduct all right, then pay capital gains taxes on the selling price , when you do sell, of anything over the first 250,000.

    Here in Canada your profit from the sale of your home is 100% non-taxable. This used to apply to having a second home or cottage (vacation property) but Mulroney took that away. Conservative gov't.