I remember, when I was a younger, I asked my mom if all my friends were richer than we were, because so many of them had bigger houses and fancier cars. She tried to explain to me that many of them were actually quite poor. Only recently did I really begin to understand what she meant.

But I still believe
And I will rise up with fists!!

Eventually, the mortgage is paid off.
Rent just keeps coming due every month.
Having said that, though, remember — every home need not be an exurban McMansion. My 1957 fixer-upper cost just $38,000 ten years ago. I could probably get that same money out of it, if I had to, now.

There is but one way for a newspaperman to look at a politician and that is down.” Frank H. Simonds

I’ve a nice 80’s condo…not huge, but it is just me and the cat. I’ll live in it for the forseeable future, with no plans to ’move up’. I do plan to move to a better climate when I retire, but that is years and years away.

As the good financial folks try to get across, you need to live *below* your means. Most of America used their homes as ATM machines for the past few years…and it’s catching up to them. The decision to rent versus buy takes more than just the ownership cachet. It involves tough decisions and real money…can you afford a reasonable down payment on the place that you’d want to buy, or are you comfortable not being tied to a place that *you* have to fix-up/repair/whatever when needed. It can get expensive to live in a place you own — and that doesn’t count the routine maintenance….I’m talking about the big unexpected repairs that hit you when you really can’t afford to do anything but put it on the plastic. When you rent, the cost of repairs is someone elses affair. You can pick up and move if you notice the neighborhood is getting seedy when you rent. Not so much if you own the place.

There is a feeling of security when you own your place. There is no landlord to give you 30 days to get out…but there is that constant feeling that you are married to the mortgage too. McMansions are for folks who don’t plan on living in them very long. A real home is not owned or rented…it is where your heart says to you ’I’m home’.

Two reasons for an individual to buy: forced savings (you do eventually own an asset) and inflation protection (mortgage payments don’t go up like rent - unless you use an ARM).

One reason why society should want people to buy: more stable communities due to more involved homeowners (please come look at my 25% ownership rate “hood” and the trash on the street if you don’t agree - though of course this may be specific to American culture).

That said, it makes no sense to buy if you can rent for (a good bit) less, or have an unstable income flow.

…when each payment you make on your house becomes part of your total ’net worth’. It makes a lot of difference to keep that monthly payment in your own hands.

Ruth

I can understand how you feel and, as a single woman, I waited longer than I should to buy just because it seemed so overwhelming. However, a big part of my retirement plans involve having this house paid off by the time that I retire.

I bought lots less house than I qualified for and although I got a 30-year fixed mortgage, I am paying it off at a rate that will have it paid off in a total of 15 years. Thus, when I retire, I’ll have to pay taxes and upkeep, but not rent. If I had to, I could sell the house and buy a small condo, living off of the appreciation.

If your only choices are a trailer in the middle of nowhere and a McMansion, then renting can seem to make more sense. But there are other options, from small condos to townhouses to bungalows. Building equity and knowing that the monthly payment is going to you rather than to a landlord can be a good thing.

… I would buy a small condo in a city I love. But there you are.

No authoritarians were tortured in the writing of this post.

“Eventually, the mortgage is paid off.?Rent just keeps coming due every month”

That particular canard (one of many) plays on people’s ignorance of a fundamental relationship in finance: the fact that the limit of an infinite series can equal a finite number. So rent may or may not exceed mortgage costs. It varies case by case. Everyone parrots “Still paying rent?” as though rent is an expense but interest is not. Why are we brainwashed like this? Because housing debt is the most effective social control mechanism yet devised. Of all the smart financial decisions this commenter has made, not buying a “home” has done the most for his standard of living and financial independence.

“each payment you make on your house becomes part of your total ‘net worth”

Oh, and there’s that canard too. Your house payment is typically subject to leverage that would pucker the butt of a roaring twenties speculator. Leverage is extremely powerful, and it can be positive or negative. Recently it has been positive. Now it’s negative. Negative leverage can wipe out your net worth in a heartbeat. When your house price appreciation net of after-tax expenses (tax, maintenance, HOA dues, etc.) drops below your mortgage interest rate, you get poorer every day. Very, very quickly.

here’s how it seems to me: job security isn’t so certain anymore, for those of us in the not-uber rich class. it’s really hard, if your credit isn’t perfect, to get a fixed rate short term (30 year or less) loan which will buy a home in a ’hood worth living in. on top of mortgage, there are taxes, repair costs, “incidentals” and insurance…which added together, can equal or exceed the payment. plus, you have to do everything yourself- heating, plumbing, roofing, siding, water…that shit isn’t cheap. nor can it be “put off” until the next paycheck. toilets go out, and can cost thousands to repair.

contrast this with apartment living. sure, your landlord can kick you out in 30 days, but i’ve moved something like 15 times in the last 30 years, and i don’t think it’s that bad. finding a place on the quick isn’t that hard, once you know what to look for. even with pets- for many years i was a renter with 2 cats and 2 dogs and 2 smokers. as a renter, i don’t have to know about the best plumber, or taxes, or windows, or any of that crap. and with research, i can find landlords who want long term stable renters who don’t make noise and pay on time, and who will offer nice incentives in exchange for that regularity. my old college landlord moe and i still say hello on holidays, so happy are we both with our former ’relationship.’

as i said, owning is great- if you’ve got piles of cash and a sure thing job. but as an “investment” owing a home seems silly to me. the rate of “return” isn’t so great, and my grandmother, herself a real estate mogul in her day, has retired into a rental community for seniors, because she can’t live alone anymore. and as nice as it is to have a “credit card” line of credit in a home, i don’t see how being further in debt (and on your living space) is a “good” thing.

Here’s the deal — House is paid for. (yeah, paid the 15-year-mortgage-size payments, on the 30-year note. Bought the house while Clinton was still President. No penalty for early payoff is a wonderful thing. There were some mac-n-cheese suppers, but everybody has those, right?) Short of a revolution in Texas, until the day I die I have a place to stay. It costs me insurance and taxes, and amortized over 12 months, that’s a little less than $290 per month. Damn fine bargain for me. Do I gotta do a little upkeep? Yeah. But, hey — I get to pick the color of the new appliances, and if I do the un-sexy things like insulate and rewire, you know what? My light and gas bills go down. So my heat in winter and AC in summer are cheaper (or at least not climbing as high as fast as the gas for my pickup). And since it’s *my* house, I can do that, without having to hire a licensed guy for major $$$$ like a landlord would need to do. Do I live in a McMansion neighborhood? Well, no.
Actually, hell no. I don’t have an HOA to answer to.
Yard stays mowed and the cats stay indoors and nobody tells the city I’ve had eight (that’s just a little bit more than the law will allow) since, like, two months after I moved in. (I brought a pair with me, 10 years ago, and I’m a sucker for rescues … as are my sons.) Furthermore, if I want to dig up my backyard and put in tomatoes, corn, black-eyed peas, green beans (yeah, again, once I’m sure the #$%^&@! weather isn’t going to freak completely out), peppers, and squash, I can. (Better use for the water than a fracking lawn!) I have a grape vine and a climbing rose on a trellis outside my bedroom window. There are dove and quail and squirrels (and other not-so-cute fauna) in the ’hood, too. In a year or two I’ll break the front yard up with the tiller and put in buffalo grass and butterfly weed, and then I can quit with the everlasting mowing and watering. Bring back about 500 square feet of shortgrass prairie, right here in town. Xeriscaping, or wildscaping, or whatever you wanna call it.
And some days it purely galls the core of my soul to have to live in town, anyway. So is it perfect? No, but at least I don’t live next door to a bunch of idiot Republicans.

There is but one way for a newspaperman to look at a politician and that is down.” Frank H. Simonds

Residential real estate appreciates at the rate of inflation (inflation has lagged a bit lately, but it will most certainly catch up). Money markets earn you more than that, bonds even more, stocks even more, derivatives still more, maybe, and the incremental return of those financial assets can buy housing stability or geographic variety or some combination. This commenter tends to blow more of that discretionary income on variety. Stability is nice too, as it tends to confer more leeway to adapt the property. The advantages of the situations described above seem to hinge on where they are more than on the financial mechanics. Most satisfying thing about renting, IMO: leaving the country for a good long time. When your vote has been negated it’s nice to vote with your feet, return to civilization, & play some equivalent negligible part in fucking up the Bush economy with reduced domestic demand and foreign remittances.

… part appeals to me too. However, I did pay off the mortgage and now have minor expenses in my older, well built house in a really comfy backwoods place. Eventually I may take a loan on the equity and put up a duplex to rent out.

But since we’re having the fourth year of drought I have stopped planting a garden, now put my herbs and flowers in pots on the porch.

Ruth