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Not sure if I should buy a house at 24 years old. I live with

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Not sure if I should buy a house at 24 years old.

I live with my mother and it seems like the best option. I could store all my tools and motorbikes and weights. And I could have a place to bring friends over and have BBQ's. My dog would like the big yard. etc.

It's a big commitment. Anyone here glad they bought a house?
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>>17791741
Unless you have a large variety of assets in other forms of investment and have a large amount of savings as well, buying a house is financially a bad idea. Inflation readily outpaces the value of a home over time.


for kicks
https://www.youtube.com/watch?v=YHU_KLYhibI
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>>17791748
that was very interesting to watch lol
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depends on your income and financial stability to be honest and how much houses are in your area for buying compared to renting.

for example: here its expensive as hell to rent so it makes more sense if you plan to live 'here' to get enough money for the down payment and your mortgage payment equates to the same or less than rent. i live in an expensive ass city though.
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>>17791821
to add to that. IF rent is cheap where you are, you could probably find a place to rent with a garage or tool shed for the bike and tools.

basically you weigh the price of a down payment, how much you make vs how much you like to spend and if you're happy where you live. once you buy you're locked down if you're not in a sellers market
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>>17791821
>to be honest and how much houses are in your area for buying compared to renting.

Generally in most housing markets the amount of rent is directly proportional to housing prices within the same area. Sure you can get lucky and make a quick buck, but unless you're a realtor you're more than likely not going to be able to recognize such a thing, let alone tack advantage of it.
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>>17791837
>basically you weigh the price of a down payment,

Down payment is nothing, maintenance and interest are significantly higher costs. Which is why you are more likely to lose money than to gain it if you purchase a home.
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>>17791741
> Anyone here glad they bought a house?
i have never been happier about anything else that i have done than when i bought my house
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>>17791741
Seriously, use this to do the math: http://michaelbluejay.com/house/interest.html

On a 30 year loan with a 5% interest, over the lifetime of the loan you will pay approximately 280,000 dollars in terms of interest alone on top of the principal of 300,000 dollars, which comes out to a total payment of ~600,000 dollars for a 300,000 dollar house

Dont do it.
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>>17791845
im was using an example from my area. rent is disproportionately higher than a mortgage payment. ie: newer one bedroom basement suite is around 800, 2 br 1200. houses are anywhere from 1800-2200+. if you can swing it here getting a down payment together and buying the mortgage is cheaper. at least if get a house with basement suites you can offset it by renting them out or extra rooms. i know it defeats the purpose of having your solitude but at least someone is paying you
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>>17791868

Are you including Property Tax and Maintenance costs for calculating home ownership?

It depends on where you are, but keep in mind that Property Tax alone on a $300,000 house is anywhere from $3000-6000+ a year. You factor in a normalized maintenance cost of maybe $1500-2000 a year and you're already getting closer to that $800/mo rent and we haven't even gotten to insurance or the actual mortgage yet.
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>>17791867

There's actually a trick to this that saves you boatloads on interest:

Every month that you can, write out an extra check for $100-150 or whatever payable only on the principle in addition to your regular mortgage payment. You can end up paying off your loan many years earlier and save tens of thousands or even $100k+ off the interest this way.
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>>17791941
Yeah, exactly. Just to keep with the example of a 300,000 dollar home the maintenance costs will be 1-2% ever single year. Then on top of property tax of another 3-6k a year you're looking at worst case scenario paying upwards of 900,000 dollars after all is said and done for a 300,000 dollar home.

And you have to live with the stress of it all as well.
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>>17791951
Fantastic, this is the exact same as doing a 15 year loan rather than 30 year loan.

In that case using the previous website it is like a total interest of 150000+ dollars. You're still losing out. Still got an extra 200-300k in maintenance and property tax costs as well.

Also consider your house will more than likely be worth less, taking into consideration inflation, after you finish your loan or even half way through it.
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>>17791954
>And you have to live with the stress of it all as well.
And renting a property is stress free? The knowledge that you could be kicked out and have to find a new place for a similar price in a similar neighbourhood is stress free? Potentially moving house often is stress free?
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>>17791951
And effectively by paying merely and extra 100-150 dollars a month you're looking at only a savings of 20,000-50,000 from that interest. No where near a 15 year loan which even still has stupid amounts of total interest.

>even $100k+ off the interest this way.
You are truly guessing at this point.

Even in your best case example you're still out 800,000 for a 300k home.
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>>17791965
>consider your house will more than likely be worth less
There is no reason this should be so, unless you live in a particularly terrible area. Houses retain their value pretty well.
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>>17791966
>And renting a property is stress free? The knowledge that you could be kicked out and have to find a new place for a similar price in a similar neighbourhood is stress free? Potentially moving house often is stress free?

You are renting in the wrong place. Get yearly contracts, dont do month to month. There is your mistake. Also i have been renting for 6+ years and have never been threatened to be kicked out or anything. Idk why you have dealt with such a thing so much, or are you just guessing?

And obviously being in charge of a home in any form is stressful. But owning a home is significantly more stressful than renting, by a factor of 100 times, guaranteed.
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>>17791984
I don't rent, I'm just pointing out that you're making assumptions. You can't say that owning a home is more stressful if you've never owned a home. You have nothing to compare to.
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>>17791976
>Houses retain their value pretty well.

Yeah, either stay the same value or lose value. You're paying interest, you're losing money. You're paying 800,000 for a home only worth 300k that never increases value (inflation considered). It is the equivalent of renting a home to "own" for the low low price of 400k-500k over the course of 30 years. In which case when you sell you're home you're out literally 100k-200k.

As calculated the above house will have a monthly payment of roughly 1600 dollars. If instead you get a home to rent for 30 years at a monthly payment of 2k you pay only 60k over the lifetime.


So the cost to own a home for 30 years will approximately cost you 100-200k while renting a nicer home for 30 years will cost you less than 60k. The math is very straight forward.
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>>17791988
>You can't say that owning a home is more stressful if you've never owned a home.

I have never owned a home, correct. I have rented however and managed homes for renting.

The idea of renting being less stressful than owning a home is logically follows the amount of responsibility in each case.

You're just telling me im wrong without providing any logic/reason/evidence.
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>>17792003
>You can't say that owning a home is more stressful if you've never owned a home.

And more importantly anecdotal evidence definitely does not make the rule.

Especially coming from someone who doesnt rent. I mean how could you know what it is like to rent in the current climate?

It is easy to make that rebuttal to you as well. But is entirely unhelpful and unfounded in any grounded ideas or logic.
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Depends where you live and what the market and terms are like. I bought because this is the UK and the housing market is ass blasted crazy. I put ₤100k down with 20k on a mortgage at 1.26‰. I took it over 30 years with an unlimited ability to overpay to reduce the principle or monthly amounts at any point with no fees or penalties and repay ₤80 a month alongside another grand or so a year as lump sums so I've got it down to less than 13 years already within three.

Renting by comparison was ₤550 with the same taxes and similar bills except maintenance which has been roughly ₤1.2k a year (old house) but most of these are improving the value of my house. Currently market price is in the region of ₤180k on this street. World economy would have to tank pretty hard for me to lose on this and I'd still need somewhere to live.
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>>17792037
I put ₤100k down with 20k on a mortgage at 1.26‰

Right, i actually agree that purchasing a place outright is a good investment. But getting into a hefty mortgage isnt. And there are exceptions to the rule where certain markets provide a more than average return on your home.
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>>17791995
Rent is also subject to inflation over time and should factor into the opportunity cost hombre. What will the market ask per month in 30 years?
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>>17792041
Great, sure. Considering an average inflation of roughly 3% you still only end up paying 80k, using all the same numbers i have been. Still well below the long term cost of owning a home at 100-200k. And that is assuming your renter can increase the rent yearly.
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>>17791741
As long as you can afford it its always a solid investment, Just dont move into a shitty part of town.
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>>17792047
Then the rental market is due for correction because renting as a investment for the property owner should show yields in excess of what the money could do in a simple savings account.
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>>17792085
Putting your money into a CD/bonds/savings account is always going to yield more spending it on buying a home or rent or clothes or food or anything. Im not sure what you're getting at.

> renting as a investment for the property owner should show yields in excess of what the money could do in a simple savings account.

IDK where you live or what the market is like in your area. But if you get a loan from a bank with a minimum down payment, it has always been the case that you lose money. The hope is that the property value outpaces inflation, which it rarely does.

On the other hand buying a place outright to rent, or do anything with really, is definitely a good investment and will yield a return.

I am talking specifically about the US and getting a bank loan to purchase a home. In that case you will absolutely always lose money in the long run, and more than you would by simply renting.

>should show yields in excess of what the money could do in a simple savings account.

and again has absolutely never been the case, and was told to me by more than one realtor (given my particular area in the us)
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>>17792100

To sum up housing investments are fantastic in only two cases, when either

A) you have enough money to pay for it outright or can put 40%+ down.

B) You can put more than 20% down and intend to rent/landlord the home for 30-40 years consistently.

C) You want to diversify your already wide variety of assets.
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>>17792085
I mean if you want to get real technical we could compare the amount you would make investing your down payment in an indexed fund compared to a home.

For a 300k home the minimum down would be 15k. Already i calculated that you'd expect to pay roughly 80k to rent over 30 years vs buying a home at 100-200k.

If you took that 15k and invested it in a indexed fund of a very conservative rate of 5% then after 30 years it yields a total of about 65k. So in reality renting a home and investing in an indexed CD yields a net loss of 15k over 30 years while owning a home still yields a net loss of 100-200k.
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you know im just wondering where you all live that your mortgage rates are 8%+?
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>>17792206
>8%+

??

Who said that? The average mortgage rate in the us is a solid 4% which is what i used to calculate.
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>>17792217
ah i think my brain added in your property and maintenance percentages too. muh bad

i do enjoy reading all this there is a lot more variables to consider that i hadn't thought of. (not op)
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