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Replies (6)
- SoCal_Engr
- Contributions:5667
I was taught to buy a primary home as if I would live in it for the rest of my life - because there would be no guarantee that it wouldn't. So, I never buy a primary house unless it meets my needs - on the premise that I could always flip it.
However, that doesn't exclude making sound decisions about location, style, etc. and trying to avoid overpaying.
Also, when you say "investment" you constrain a primary residence to a financial perspective. There are other reasons (i.e., schools, location, amenities, proximity to family, etc.) that go into that decision.
However, that doesn't exclude making sound decisions about location, style, etc. and trying to avoid overpaying.
Also, when you say "investment" you constrain a primary residence to a financial perspective. There are other reasons (i.e., schools, location, amenities, proximity to family, etc.) that go into that decision.
- Dan, "the_country_hick"
- Contributions:4699
When I buy a house I will be buying it for personal needs.
One of those needs is not to waste my money overpaying for it. Another need (of several) is a lot of acreage and single story living capability.
A house is like a new car. It is NOT an investment. It IS an expenditure. You have to pay the town or city money ( taxes not registration) so you can use and keep it, you have to pay for insurance, you have to pay for repairs to keep it in good shape.
A house really only mirrors inflation (overprinting and devaluing of money) and does not really give a profit (barring the bubble years which is now being corrected). As an investment a house is a horrible thing to put money in as other investments typically pay off much better.
As a place to live a house sure beats other things you could put your money into including a car.
Many people are upset about the "investment" aspect of buying a house. When they bought their house in 1972 for less money than they now have to pay in taxes each year they wish investment did not happen. They often have trouble paying the taxes and can even be forced into a sale solely because of taxes on an inflated value they do not want or care about.
If the price of the house appreciates property taxes appreciate even more to hurt an owner.
One of those needs is not to waste my money overpaying for it. Another need (of several) is a lot of acreage and single story living capability.
A house is like a new car. It is NOT an investment. It IS an expenditure. You have to pay the town or city money ( taxes not registration) so you can use and keep it, you have to pay for insurance, you have to pay for repairs to keep it in good shape.
A house really only mirrors inflation (overprinting and devaluing of money) and does not really give a profit (barring the bubble years which is now being corrected). As an investment a house is a horrible thing to put money in as other investments typically pay off much better.
As a place to live a house sure beats other things you could put your money into including a car.
Many people are upset about the "investment" aspect of buying a house. When they bought their house in 1972 for less money than they now have to pay in taxes each year they wish investment did not happen. They often have trouble paying the taxes and can even be forced into a sale solely because of taxes on an inflated value they do not want or care about.
If the price of the house appreciates property taxes appreciate even more to hurt an owner.
- SoCal_Engr
- Contributions:5667
"Many people are upset about the "investment" aspect of buying a house. When they bought their house in 1972 for less money than they now have to pay in taxes each year they wish investment did not happen.
If the price of the house appreciates property taxes appreciate even more to hurt an owner."
Not in California. Of course, Prop 13 has other unintended consequences that screws up the equation. Like neighbors living side-by-side in similar houses paying drastically different taxes. Or, people in a newer neighborhood complaining about paying higher taxes for new schools, and then not being able to get their children into the schools because the older neighborhoods have taken all the slots.
If the price of the house appreciates property taxes appreciate even more to hurt an owner."
Not in California. Of course, Prop 13 has other unintended consequences that screws up the equation. Like neighbors living side-by-side in similar houses paying drastically different taxes. Or, people in a newer neighborhood complaining about paying higher taxes for new schools, and then not being able to get their children into the schools because the older neighborhoods have taken all the slots.
- SteadyState
- Contributions:787
You offer a false choice. Why is it not possible to do both?
When I buy anything I think if my money is being used wisely - in particular I think if the item is too expensive, requires high upkeep expenses, are cheaper alternatives, etc.
Example:
In 1995 - a car salesman suggested that we should buy a large SUV as we visit Tahoe in winter.
An AWD SUV cost: $30K
We go to Tahoe 2/3 times a year.
SUV Rental: $75/day
In 1995 we could rent an SUV based on the interest earned from the $30K. We did not buy.
In 2011, our rent is $3K and for the same sized home in our area sellers are asking for $1.1M. I will rent - thank you very much!
When I buy anything I think if my money is being used wisely - in particular I think if the item is too expensive, requires high upkeep expenses, are cheaper alternatives, etc.
Example:
In 1995 - a car salesman suggested that we should buy a large SUV as we visit Tahoe in winter.
An AWD SUV cost: $30K
We go to Tahoe 2/3 times a year.
SUV Rental: $75/day
In 1995 we could rent an SUV based on the interest earned from the $30K. We did not buy.
In 2011, our rent is $3K and for the same sized home in our area sellers are asking for $1.1M. I will rent - thank you very much!
- Julie Rose, "Julie Rose"
- Contributions:5
Fortunately I live in Iowa, where our market has dropped, but only 30% of value three years ago.So we still have value out there and it the house is in good condition and updated typically it's only lost 10 to 15%.
My answer is both, If you are not doing both then you are not being realistic in your selection and are not using your money wisely.
A home that meets your personal needs, should also meet your financial goals. We couldn't stop the recession, but for those buying a house in our economic conditions now should be looking at the obvious "If I buy this home and I stay here 5 years, will I recoup my money?"
If it doesn't meet the buyers needs and doesn't have the ability to hold it's own in value or appreciate then it isn't a buy for anyone!
Pick another house, there are lots that are available.
My answer is both, If you are not doing both then you are not being realistic in your selection and are not using your money wisely.
A home that meets your personal needs, should also meet your financial goals. We couldn't stop the recession, but for those buying a house in our economic conditions now should be looking at the obvious "If I buy this home and I stay here 5 years, will I recoup my money?"
If it doesn't meet the buyers needs and doesn't have the ability to hold it's own in value or appreciate then it isn't a buy for anyone!
Pick another house, there are lots that are available.
- Scott White, "LaxLoanPro"
- Contributions:19
Like most investments you need to look at your home as a "long-term" investment and until the market changes, you'll probably be looking at homes as undervalued. Does that mean your home is not worth what you put in it? No. What it means, is a buyer is only going to pay what they think your home is worth, and in this market it seems all the pitches are low. Hope that helps.
When you buy a home, are you thinking of it as an investment, or a purchase for your personal needs?
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