Buying a personal house is a terrible way to achieve retirement, amirite?

My home has tripled in value since I bought it. Glad I bought when I did. We bought a place to live and grow in. My mortgage is less than rent in my area. I did alright

by sauerlawrence 1 day ago

I bought a condo in 2022 for $185k, I could probably sell it for $250k based on recent sales in my complex. I'm fully good.

by Anonymous 1 day ago

You would've made slightly more if you put that money into SPY which excludes condo fees, property taxes, potentially maintenance you've paid over the past 3.5 years.

by Humble_Amoeba_3482 23 hours ago

Does that take into account the $1,500-2,000 monthly rent i'd have to pay anyway?

by Anonymous 23 hours ago

My interest rate is 3.25%, total payment mortgage + HOA is $1,500 a month

by Anonymous 23 hours ago

Bought 9 years ago. I pay less than most renters. 1400 a month utilities and property tax included.

by Anonymous 23 hours ago

The "forced savings" aspect of home ownership cannot be overstated.

by Practical-Opinion785 23 hours ago

If you were to rent for cheap is a big if. Rent in many places isn't cheap.

by Anonymous 23 hours ago

And likely deal with a landlord that you don't see eye to eye with and are at the mercy to

by Anonymous 23 hours ago

Our mortgage is 1/2 rent in my city, and we're considered a LCOL area.

by Anonymous 22 hours ago

We all need dads who want to move in with their girlfriend.

by Anonymous 22 hours ago

My rent is cheaper than the average mortgage around here. I pay 1049 a month. Average mortgage is 2200. Anything less and you're looking at a crappy neighborhood or a fixer upper.

by Kitchen_Respond_991 22 hours ago

(cries in ARM)

by Severe_Law_6861 22 hours ago

I'd say the real advantage of home ownership also is the stability. Renting is a temporary solution to your longterm housing problem and unless you have a great landlord who lets you rent well below market rate, you'll find home ownership is preferable. On the one hand, you will pay more for the home over the course of the mortgage. On the other, until we return to multi-family households and more direct land inheritance, we'll essentially continue to pay for home ownership through debt.

by keeblertalia 21 hours ago

Instead, if you were to rent for cheap, and aggressively invest in stocks, you would be putting yourself onto a much better route for retirement. That's the thing : people don't heavily invest in stocks. Also, after 30 years, no more monthly payment to get housing is nice, and when you sell you get a big payout because houses generally gains a lot of value.

by Prior_Researcher1577 21 hours ago

No monthly payment to get housing? What about insurance, property taxes, repairs, utilities? It still costs to live somewhere. There's no such thing as living somewhere with no monthly payment.

by Top-Track-5031 21 hours ago

What about insurance, property taxes, repairs, utilities? Still way less than rent.

by Prior_Researcher1577 21 hours ago

Not many people stay in the same house for 30 years. That's the key. If you can stay in one spot for 30 years then you will have achieved the goal, but the second you move houses you immediately drop any profits on the next down payment, and that's not counting any repairs you made for the house itself

by Anonymous 21 hours ago

I'm retired and I have a home. I also paid it off the best thing I did. I'm quite happy not having a mortgage.

by jarrodsipes 20 hours ago

We bought my dad's house for what he had left on his mortgage. $40k more, and we'll be paid off. Current value $250k. My dad originally bought it for $79k in 2007.

by Anonymous 20 hours ago

Well if you got into the market at the right time then it's the best thing a person can invest in. If you bought the house during covid with the high interest than it's 50/50. Can have negative equity.

by Haunting-Support 20 hours ago

Interest rates were at record lows during covid

by Top-Track-5031 19 hours ago

You have absolutely no idea how the economy works, to the point it is absolutely astounding....

by Mission-Roof2274 19 hours ago

So elaborate

by Top-Track-5031 19 hours ago

Did you factor in that rent goes to someone else and that after you pay off the mortgage you are way better off financially?

by Anonymous 19 hours ago

A great thing about buying a home with a mortgage is that you're leveraging someone else's money while you get to keep all of the capital gains. For example, if you put down $200k and borrow $800k to buy a $1 million house, and then the house doubles in value, you keep all the profit from that increase on your initial $200k investment. That kind of leverage isn't common in most other investments.

by Anonymous 18 hours ago

That's back of the napkin math though. To borrow $800k, you're paying an absurd amount in interest. Your point stands true, but your paying a cost.

by Top-Track-5031 18 hours ago

Around me in pa, you can buy a nice 1,500 sf ranch with a quarter acre for 300k, mortage taxes and insurance will be under 2,500 a month, good luck getting a 3 bedroom apartment for that. I spent 120k for a place that needed work,15 years ago and monthly bill is under a $1,000. If you do this when you are 35. When you retire, you will have no mortgage. Good luck raising a family in an apartment with raising rent payments every year.

by Anonymous 18 hours ago

Lol!

by Anonymous 18 hours ago

The thing you don't account for is that the interest rate in the long term actually is meaningless. The inflation of home prices is much higher than the avg interest rate, such that over the long term your principal becomes smaller and smaller while the underlying value of the home increases. Obviously the other costs of home ownership are a large factor, but building equity into home ownership does actually present value. Many people don't understand and trust stocks which is very valid, they don't have the same tangibility that owning a home comes with. Assuming the same economic paradigm continues stocks will do well assuming you invest in the right things and do so appropriately, but that's easier said than done. If you actually look at your stock returns accounting for risk and inflation the returns would start to not look as great as you think they might be. Assuming the very real chance a great depression style event were to occur, it may be 20 yrs before your investment recovers or it may never. Many people like to stick to the real aspects of life that owning a home brings you and spending a little rather than trying to penny pinch their way into a retirement prospect with very loose guarantees that they will see the type of tales that are sold to them by finance people.

by Anonymous 17 hours ago

Also inflation works in your favour

by Anonymous 17 hours ago

Not only is this an unpopular opinion, it's just flat out wrong fiscally and mathematically.

by Anonymous 16 hours ago

If you buy a house when interest rates are average you don't have to battle as much to get a house. Then you can refinance to a lower absurdly great rate when the time comes and everyone is battling for the homes.

by Anonymous 16 hours ago

That's why I only buy impersonal houses

by Anonymous 16 hours ago

Blackrock wrote this

by Anonymous 16 hours ago

You're missing the point. If money is the goal, you should be buying 4plexes or even saving up/finding investors to buy a 50-plex.

by Top-Track-5031 15 hours ago

Just gotta save a cool $18 million for a 50 plex 🤣

by Anonymous 15 hours ago

If you rent you're still paying for property taxes, insurance, repairs and any HOA fees. Those costs are still there and the landlord is passing them on to you. Also, you will always be paying about market rate for your rental (with few exceptions) and if the value of your property goes up you reap no reward at all. So if you decide to rent a house instead of buying an identical one, in 10 years you'll be paying way more per month AND you won't have any equity in the property. All of your monthly payments are gone if you rent, if you own them that principal lowers the value you owe on the property and increases your profit when selling. Rental is really only a good option if you're planning to stay short term, you think property values will take a dive, or you're extremely risk averse.

by bergelesley 15 hours ago

While it's true that the interest is a lot more than people realize, it's also a leveraged investment. For a 10% down payment, you can immediately start growing value on 10X your initial investment (leveraged 10 to 1). Also, considering you still need to live somewhere, this kills two birds with one stone.

by Anonymous 14 hours ago

I made the same point above. Show me another investment where you stump up 10% the lender stumps up 90% but you get to keep all of the capital gains. And you also get a secure place to live.

by Anonymous 14 hours ago

Buying a home is definitely the worst way to build wealth but it is also the best solution for most people. Renting and investing the difference requires discipline and is not something many people are cut out for. Forcing savings by borrowing and building equity is a grind but is a predictable slow and steady approach that works, but just don't look at the numbers on a spreadsheet, cause it's ugly.

by KnownWorldliness 14 hours ago

Yeah. Good plan. Stocks are a guarantee.

by Anonymous 13 hours ago

Maybe at this exact moment in history, but don't try telling this to people with their 3% mortgage from 2021 paying half your rent in mortgage

by stantonsharon 13 hours ago

What about the other exception of if you bought anytime in the last 50 years (except 2008) you vastly outpaced the stock market?

by stantonsharon 13 hours ago

Did you buy it cash? Are you accounting for how much interest you paid? Repairs? Other costs? If you put $80k in the SP500 in 2013, and did not contribute anything else to it, it would be worth $400k today.

by Top-Track-5031 12 hours ago

Did this m.f.'er just say 'personal house'? Two Americas don't mean what it used to

by MinimumSignal8298 12 hours ago

If you make $70k/yr, and you put $100k down on a $400k house, would you be better off renting a studio/1bedroom/live with roomate and investing rather buying a house? your answer is going to vary by interest rates, so answer it how you like

by Top-Track-5031 12 hours ago

Most rents in my area are as much money a month as my mortgage payment. At least I'm putting money into something that I can eventually sell for hopefully a profit. It's the upkeep of a house where you can lose a lot of the value.

by Anonymous 11 hours ago

Try being retired and still renting. Then you'll wish like hell that you bought 30 years ago..

by Anonymous 11 hours ago

373k at the end of 30 years is going to be chump change

by Anonymous 11 hours ago