As I admitted in an earlier post, it is all my fault that we jumped into the real estate market when we did. I had the baby fever and obviously thought that a 19.5″ little baby needed his own space to spread out!
Here we are 6 years later, and while we adore our neighbors and fit wonderfully into our home, I know that we would have been smarter to continue renting. Maybe indefinitely. Owning a home is a money pit. Sure, you’re “building equity” (although most people aren’t really because they put 0% down) but in the meantime you’re also dealing with plumbing debacles, furnace issues, and a leaky roof. When you’re renting and disaster strikes, a quick phone call to the landlord is made and then HE or SHE is responsible. I realize that all landlords are not created equal, yet it is still THEIR responsibility to correct the issue- you’re wallet is taken out of the equation.
Before I get flack for killing the American dream, I urge you to try the Rent/Buy Calculator at the New York Times. I suspected it would tell us we should rent- and it did. If it tells us we should rent, and we live in a very modest home with a mortgage and insurance under $650, I hate to think what it is going to tell some of you! What’s the one major budget buster behind the reason we should rent? Utilities and upkeep.
A smaller apartment is most likely going to cost us less in heating and electricity, and with the money we are constantly shelling out to fix things, we could be investing a few thousand a year in a mutual fund that will typically earn about 8%. Instead we’re here maintaining the property and we’ll someday pay a real estate agent about 6% to sell it for us. Yuck!
Most of my reasons for owning a home are purely emotional. I want to paint and decorate the way I choose. I want a private yard for my children to run in. I simply don’t want to have the “apartment lifestyle” at age 31. None of these things are necessarily wrong or evil, but I can acknowledge them to be true since I know that paying a mortgage every month doesn’t make me better than anyone or even more financially savvy.
I think we need to stop preaching the Gospel of Home Ownership in America. There is nothing wrong with buying, but the long-term costs and fixes should be evaluated instead of the age-old adage “You’re throwing money away while renting.” The reality is, you’re not. If you’re really living below your means, you could be throwing money at a better investment than four walls with a roof.
What are/were your reasons for buying? Did the NY Times calculator tell you to buy or rent? Do you think we preach home ownership way too much in America?
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