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Kara
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They call me "Tater Salad"
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Interesting Article from MSN: Three Bad Reasons to Buy a House
I thought this was an interesting article: Three Bad Reasons to Buy a House
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Posted 2/7/08 7:15 PM  |
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Prudential Douglas Elliman Real Estate
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Interesting..some of it though is inaccurate. It definitley is trying to paint the don't buy picture. No upside to owning a home. I agree with it about being able to afford it and being realistic about what it costs.
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| Posted 2/7/08 8:13 PM |
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Whamtastic
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Member since 1/07 997 total posts
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Big Fat Baby with a Blackberry
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by Blu-ize
Interesting..some of it though is inaccurate.
What is inaccurate?
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| Posted 2/7/08 8:56 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by Whamtastic
Posted by Blu-ize
Interesting..some of it though is inaccurate.
What is inaccurate?
I'm curious to know what you think is inaccurate, too.
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| Posted 2/8/08 8:22 AM |
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TreAnt427
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Member since 8/06 8652 total posts
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Tracy
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by Blu-ize
Interesting..some of it though is inaccurate. It definitley is trying to paint the don't buy picture. No upside to owning a home. I agree with it about being able to afford it and being realistic about what it costs.
I agree - it was interesting, but definitely trying to steer people away from buying.
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| Posted 2/8/08 8:48 AM |
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kerrycec03
Mom of 2 beautiful boys!!
Member since 6/06 13519 total posts
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Kerry
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by TreAnt427
Posted by Blu-ize
Interesting..some of it though is inaccurate. It definitley is trying to paint the don't buy picture. No upside to owning a home. I agree with it about being able to afford it and being realistic about what it costs.
I agree - it was interesting, but definitely trying to steer people away from buying.
me too
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| Posted 2/8/08 9:19 AM |
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anjerandunder
Positive thoughts worked!!!
Member since 6/06 1909 total posts
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J
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
everyone has their own opinions. i'm happy that i found my house and purchased it even if the market is deflating. I OWN A HOUSE ON LONG ISLAND. that's a feat in itself. and if you're ready to buy a house and you find one that you like and the mortgage payment fits your pocket than buy it. you only live once. no one can tell the future.
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| Posted 2/8/08 9:37 AM |
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Kara
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Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
I guess I didn't take it as staunchly advocating NOT buying under any circumstances - just as another viewpoint when so many people think they HAVE to buy a home... but I can see how it could be taken that way.
I *do* own a home and am glad I do.
I also think now is a good time to buy if you can afford to and are buying for the right reasons. So good in fact that we'll likely be purchasing a second home soon. The time NOT to buy already passed. I'm very much into buying / acquiring assets when the market is down, which we were fortunate enough to do.
Message edited 2/8/2008 9:44:30 AM.
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| Posted 2/8/08 9:44 AM |
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bicosi
life is a carousel
Member since 7/07 14956 total posts
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M
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by Kara
I guess I didn't take it as staunchly advocating NOT buying under any circumstances - just as another viewpoint when so many people think they HAVE to buy a home... but I can see how it could be taken that way.
I *do* own a home and am glad I do.
I also think now is a good time to buy if you can afford to and are buying for the right reasons. So good in fact that we'll likely be purchasing a second home soon. The time NOT to buy already passed. I'm very much into buying / acquiring assets when the market is down, which we were fortunate enough to do.
You see, this is how I took it too.
I think that so many people have gone into homebuying without really having enough money/knowledge for it. Add into it a shady realtor and a shady mortgage broker who can put any deal together, you have false hopes, which turns into living way above your means and not being able to afford the house.
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| Posted 2/8/08 9:48 AM |
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2PreciousBlessings
The Perfect Pair
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Best Wife & Mommy
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by bicosi
Posted by Kara
I guess I didn't take it as staunchly advocating NOT buying under any circumstances - just as another viewpoint when so many people think they HAVE to buy a home... but I can see how it could be taken that way.
I *do* own a home and am glad I do.
I also think now is a good time to buy if you can afford to and are buying for the right reasons. So good in fact that we'll likely be purchasing a second home soon. The time NOT to buy already passed. I'm very much into buying / acquiring assets when the market is down, which we were fortunate enough to do.
You see, this is how I took it too.
I think that so many people have gone into homebuying without really having enough money/knowledge for it. Add into it a shady realtor and a shady mortgage broker who can put any deal together, you have false hopes, which turns into living way above your means and not being able to afford the house.
ITA! I read the article and I did not see it as it was trying to steer people away from buying. I see some very good points in the article.
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| Posted 2/8/08 9:52 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
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Susan
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
I just found tidbits this this to be inaccurate and too generalizing. Sales commissions are 5-6% and moving doesn't cost the additional 4%. Also, you can deduct the commission from your total sale so you can deduct that amount from the profit you make, making your capital gains tax lower (if you are paying capital gains.)
selling costs will eat up about 10% of your home's value, once you add agent commissions and moving expenses. On a $250,000 home sale, that's like piling up $25,000 in cash and setting fire to it -- that much of your equity is gone for good.
and this:
Remember that many of the real costs of owning a home aren't deductible. Uncle Sam won't give you a break for insurance, repairs or maintenance, for example -- and those costs can really add up.
Certain costs of maintaining your home are deductible. Capital improvements are. Anything that adds value to your home and prolongs it's useful life. (there are IRS guidelines). Insulating your home..adding safety features..etc..
I just think the article paints a dim picture of homeownership.
Message edited 2/8/2008 11:20:42 AM.
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| Posted 2/8/08 11:17 AM |
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Kara
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They call me "Tater Salad"
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
Posted by Blu-ize
I just found tidbits this this to be inaccurate and too generalizing. Sales commissions are 5-6% and moving doesn't cost the additional 4%. Also, you can deduct the commission from your total sale so you can deduct that amount from the profit you make, making your capital gains tax lower (if you are paying capital gains.)
selling costs will eat up about 10% of your home's value, once you add agent commissions and moving expenses. On a $250,000 home sale, that's like piling up $25,000 in cash and setting fire to it -- that much of your equity is gone for good.
and this:
Remember that many of the real costs of owning a home aren't deductible. Uncle Sam won't give you a break for insurance, repairs or maintenance, for example -- and those costs can really add up.
Certain costs of maintaining your home are deductible. Capital improvements are. Anything that adds value to your home and prolongs it's useful life. (there are IRS guidelines). Insulating your home..adding safety features..etc..
I just think the article paints a dim picture of homeownership.
The article said "Remember that many of the real costs of owning a home aren't deductible. Uncle Sam won't give you a break for insurance, repairs or maintenance, for example -- and those costs can really add up."
While I completely agree it's a bit misleading for somone not tax saavy, that's actually entirely accurate. Home MAINTENANCE (repairs) aren't deductible. Home IMPROVEMENTS are, but those are more things like adding a bathroom, fence, etc. Your routine home maintenance and repairs aren't deductible. Neither are your insurance payments.
From http://www.wwwebtax.com/deductions_z_other/home_repairs_or_improvements.htm
Can I take a tax deduction for home repairs or home improvements on my tax return?
Generally, you cannot deduct home repairs or home improvements on your tax return in the current tax year.
Home improvements add to the value of your home, prolong its useful life, or adapt it to new uses. You add the cost of home improvements to the tax basis of your property.
Examples of home improvements include putting a recreation room in your unfinished basement, adding another bathroom, or bedroom, putting up a fence, putting in new plumbing or wiring, putting on a new roof, or paving your driveway.
Home repairs maintain your home in good condition. They do not add to its value or prolong its life, and you do not add their cost to the tax basis of your property. Nor can you deduct home repairs on your tax return.
Some examples of home repairs include repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering and replacing broken window panes.
The entire job is considered a home improvement, however, if items that would otherwise be considered home repairs are done as part of extensive remodeling or restoration of your home.
I agree the article could have been more thorough about the selling part -- especially the tax impacts of selling.
As for selling costs eating up 10% of your profit when you sell, though, most articles state a similar figure. Remember, this area is only one small part of the country. Paying transfer taxes, etc. can eat up a large part of your selling costs in many parts of the country. Also, many people bring in an inspector before listing to identify major issues and then do some repairs before selling. There can also be relocating costs. Of course, it's just an estimate and many sellers probably get away with paying less for selling.
ETA -- I think the article could have gone a bit more in depth to avoid the confusion in these points.
Message edited 2/8/2008 1:08:24 PM.
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| Posted 2/8/08 1:07 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
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That Led To The Wrong Tendencies
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
I disagree with the "It's a good investment myth" that the article says.
Houses are always good investments as long as you buy for the right price in a good location and buy to live there long term (10+ years), or to rent out for a profit. This even holds true in markets that are struggling right now (California, Florida, etc)
However, I definitely agree with the "we need the tax deduction" and "i'm tired of throwing my money away on rent" sayings that I hear people say often.
"We need the tax deduction" is the silliest thing I hear people say because it makes absolutely no sense when you examine it in detail.
Somebody will say "i'm married and we have no deductions... lets buy a house because we need tax deductions". Ok so you buy your house. You can now deduct the $8,000 in yearly property taxes you paid as well as the $16,000 in mortgage interest you paid (these are just examples).
Great, you now have 24k in deductions that saved you about $4800 if you are in the 20% tax bracket. But wait, you still ended up paying an extra $19,200 bucks on taxes and interest you wouldn't have had to pay if you were renting! Whooops! Which leads me to my next point:
"I am tired of throwing away money on rent!" The truth is you aren't throwing your money away on rent. You are paying for a place TO LIVE. Do you still want to throw money away? Buy a house and "throw money away" on mortgage interest and property taxes. 
Granted I am not saying don't buy a house. It just drives me nuts when people say they want to buy a house because of "throwing money away on rent" or "I need the tax deduction".
Buy a house for a better quality of living, or for an investment. Not for the above two reasons.
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| Posted 2/8/08 3:36 PM |
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SweetestOfPeas
J'taime Paris!
Member since 3/06 32345 total posts
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
very interesting. there was a link to this article on the one you posted Why rent? to get richer really made me think
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| Posted 2/9/08 10:46 AM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
the original article also does not take into account the time when your mortgage is paid off and you live at the house
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| Posted 2/9/08 10:58 AM |
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MrsD06
LIF Toddler
Member since 9/07 478 total posts
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Re: Interesting Article from MSN: Three Bad Reasons to Buy a House
The second article was interesting but seemed to look at home ownership purely as an investment. The author clearly doesn't mind living in an apartment, so more power to him. I also wonder how much his rent his..I suspect it's nowhere near as high as in the NY area.
I just hate when the "throwing money away on rent" argument comes up ...I don't think it's so black and white..renting works for some people and not for others.
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| Posted 2/9/08 12:29 PM |
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