House or Apartment?

[doodlebug 3]

Maybe this should be in the polls but oh well. I have owned my own home for about ten years now all by myself.

At first I thought that is what you are supposed to do. It's everyone's goal, right? To own a home.

Well...........................my mortgage payments have skyrocketed because I refinanced a few times due to flooding that happened over the past few years and my property taxes went up too. Not to mention the freakin' upkeep of it all, i.e. paying the gardener to mow the lawn and shovel, resealing the deck every couple of years, etc. etc. etc.

Bottom line....I'm sick of it all.

Right now my mortgage is $2,400/month and my property taxes are $1,350/quarter. This is for a 3 bedroom with one bath. If I were to rent then I'd only have to pay approx $1,900/month and no prop taxes.

Could someone tell me one (or two) good reasons why I shouldn't sell my house and move to an apartment?

[Saddle Bronc 124]

Only reason that crops to mind is equity (you're now building equity, where with rental you don't).

Have you considered selling and getting a condo (this eliminates the lawn completely)?

[Fandango 1,439]

Maybe this should be in the polls but oh well. I have owned my own home for about ten years now all by myself.

At first I thought that is what you are supposed to do. It's everyone's goal, right? To own a home.

Well...........................my mortgage payments have skyrocketed because I refinanced a few times due to flooding that happened over the past few years and my property taxes went up too. Not to mention the freakin' upkeep of it all, i.e. paying the gardener to mow the lawn and shovel, resealing the deck every couple of years, etc. etc. etc.

Bottom line....I'm sick of it all.

Right now my mortgage is $2,400/month and my property taxes are $1,350/quarter. This is for a 3 bedroom with one bath. If I were to rent then I'd only have to pay approx $1,900/month and no prop taxes.

Could someone tell me one (or two) good reasons why I shouldn't sell my house and move to an apartment?

Well, you take that $1900 and you might as well throw it down the toilet cos it's just as effective this way.

Good reasons? You're building equity that you can draw from if you ever need it. And when the next boom comes....your house will increase in value, therefore giving you money when you sell. Plus, what about the freedom to own your own home? What if your landlord decides to sell? You're out of a home. And after 10 years of living there, you will have built absolutely nothing.

I had a condo when I first moved out of my parents' home. Don't get me wrong, it was great & more affordable than a house. But bringing in groceries or anything was always a hassle. The neighbors would bang on the walls if my tv was too loud. God forbid I had a party!

Your payments sound quite high for the size of the house you described. I'd talk to someone concerning a refi....perhaps you'll get a better rate which would lower your payment. Talk to a bank or mtg broker.

I know I'm a real estate agent, so I'm a bit biased....but honestly, if you have the means and the opptty to make home ownership work, it is by far the best choices & a steady investment to make.

Good luck!

[Fandango 1,439]

Only reason that crops to mind is equity (you're now building equity, where with rental you don't).

Have you considered selling and getting a condo (this eliminates the lawn completely)?

Condos usually have associations which would usually bill her a maintennance fee for the 'common areas' which basically equates to paying someone to maintain the lawn/pool/etc....so it's 6 and 2 - 3s

[doodlebug 3]

Condos in my town are available but the fees are averaging about $500/month so it'd be the same money wise.

Yeah I guess you're right about the whole equity thing, though I'm not seeing it now that prices have leveled. The woman next door to me has had her house for sale for over a year now with not even one bite!

[Fandango 1,439]

Condos in my town are available but the fees are averaging about $500/month so it'd be the same money wise.

Yeah I guess you're right about the whole equity thing, though I'm not seeing it now that prices have leveled. The woman next door to me has had her house for sale for over a year now with not even one bite!

it depends on a lot of factors, really...but sellers must forget what's happened for the past years. This market is a normal one...not a bad one...but too much speculation and too many sellers with unrealistic expectations have made it seem worse than it really is. At the right price, it will sell.

You could always speak to a realtor and get a market analysis of your home. That's an up to the date report on what the most recent home sales in your neighborhood with comparable houses are actually selling for. You can also see what's sitting on the market for long periods of time and see where their pricings are.

It's not about location, it's about price! Depending when you bought your home is obviously a big factor...if you bought it during the boom, you will not have as much wiggle room as somone who bought it when the prices were really low.

I think the most important thing I could say is review your loan docs and speak to a bank or mtg person and see what a refi could do

[Mr. Big Dog 10,747]

Other than not having to deal with living in an apartment, the hassles of having to deal with potentially noisy neighbors, etc. it seems that there wouldn't be many good reasons for you not to rent. Building equity all good and well but at close to $1,000.00/month in additional expenses for owning the home, I think you might be able to get better returns on the money than keep pouring it into a home that appears to be in an area that is subject to flooding from time to time.

It's just not entirely accurate to say that you wouldn't have built anything after 10 years of living in an apartment of equal size as opposed to this home. If you could easily put 12K/year aside into other investments, that should build something in excess of 200K over 10 years at only modest rates of return. If equity is the best argument for home ownership, the question then is: Is your house going to give you that kind of equity over the next 10 years?

[Fandango 1,439]

Other than not having to deal with living in an apartment, the hassles of having to deal with potentially noisy neighbors, etc. it seems that there wouldn't be many good reasons for you not to rent. Building equity all good and well but at close to $1,000.00/month in additional expenses for owning the home, I think you might be able to get better returns on the money than keep pouring it into a home that appears to be in an area that is subject to flooding from time to time.

It's just not entirely accurate to say that you wouldn't have built anything after 10 years of living in an apartment of equal size as opposed to this home. If you could easily put 12K/year aside into other investments, that should build something in excess of 200K over 10 years at only modest rates of return. If equity is the best argument for home ownership, the question then is: Is your house going to give you that kind of equity over the next 10 years?

I was referring to the money spent towards rent for the 10 years You might as well throw it down the toilet

If people don't think the market will eventually spike again, then I dunno what to say to that. But I've seen people who paid $100k for a house and sell it for almost $300k. Many of them took the money and moved to a smaller area so that they can keep much of the return and yet still have enough to invest in a new home.

If you invested money and made 200k in 10 years, I wonder what the taxes on those investments would be? I'm no investment expert, but I'm fairly certain that there's no capital gains loophole for stock or bond investments. I'm also fairly certain that you couldn't take yearly tax deductions on outside investments, either. And the stock mkt isn't exactly fool proof either. With a home you're building equity, yet using the investment daily to enjoy a roof over your head.

I also think it's a better ROR than any money market, cd, etc. But I'm no financial advisor, so I wouldn't know for sure. I do know tho, that it's not the 80s where you can easily live off your interest

Eh, that's just my 1.57

Edited January 17, 2007 by LisaD

[Kez/JWolf 6]

To the OP...

I too live in Boston and know how expensive housing is here... we just moved out of rental after 18 months because the cost of renting is going up and up and up it was up to $2100.00 per month and was due to increase in July to $2400.00...

We bought a very large 3 bedroom Condo in Roslindale for $288,000 and the Condo fee is only $154 per month.. we are saving about $300.00 per month by owning instead of renting...

I would look to refinance at a better rate....

Good Luck

Kez

[w¡n9Nµ7 §£@¥€r 123]

Depends on the state of the market you plan to buy/rent in, doodle. If you wanted to live in Middlesex County New Jersey, now would be a great time to rent. You're not going to build any 'equity' here, unless we're talking negative equity - prices are dropping!

[mybackpages 0]

While it is true that renting does not build equity, if you can take the difference in Rent v mortgage plus all the money you spend oon insurance, taxes and upkeep and invest/save that money you can in the end - end up with just as much in assets as you would have with equity. The problem is that most people do not put this much money aside.

I am a renter and will be for a long long time. Owned the home once, not again any time soon.

[doodlebug 3]

This is the type of appt that I"m looking into: http://www.avalondanvers.com/

That is not the town I live in now but is close enough to it. For $1,800 I can have one more bathroom and one more room than I have now, not to mention a pool, hot tub, exercise room, etc. and won't have to worry about maintenance and upkeep. No problem in worrying if the owner sells, etc. because it's not a multi family house type rental. I'd never do one of those again...been there in college and soooo done with that type of rental!!!

I would have $1,050 extra per month to put away into a cd. I think that for now, that would be more equity than my house is making me and if in the future I plan on buying again, I'll have the return on my investment from the sale of my home plus whatever I've saved up from the extra money I'm saving. I bought my home at $290k and right now it is assessed at $400k. Actually I bought my first home at $120k so if you look at that, I've done pretty good.

Hmmmmm...I really have to think about this. The toughest part of the decision is my kids since it will mean moving them. I hate that part of it because they will make my life a living hell until they find new friends.

[w¡n9Nµ7 §£@¥€r 123]

Here is a graph I created using downloadable HPI data from ofheo.gov for the Edison NJ metropolitan division (where I live).

If you bought in 1988, it took you 10 years to break even. 10 years. If history repeats itself, this downturn could last just as long. Do you really want to be a bagholder for that long?

Of course, your region might fare better historically. Check it out from http://www.ofheo.gov/media/pdf/hpimsa_06q3.xls.

Good luck with whatever you decide!

Edited January 17, 2007 by Gupt

[doodlebug 3]

what's a bagholder?

[w¡n9Nµ7 §£@¥€r 123]

what's a bagholder?

As prices go up, people sell and people buy. Everyone who buys, does so with the expectation that they will sell while prices are still going up. They sell, prices go up more, someone buys. When this person buys, the price appreciation comes to a screeching halt. They are left holding the bag, they can not sell without losing money. They are the bagholders.