• papertowels@lemmy.one
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    1 year ago

    Threw down over 20k in fixes so far in our first year of homeownership, and due to interest rates and closing costs, we don’t really have the opportunity to move anywhere else without taking a significant financial hit.

    You bet it’s not for everyone.

    • Rodeo@lemmy.ca
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      1 year ago

      Yeah but you know what, you always have a home. It is very unlikely the bank will ever foreclose on you, they rarely do that, even in 2008 almost nobody lost their homes.

      But me, I lose my home on my landlords whim. At any given time I may have just 30 days to pack my life up and fuck off, and there’s nothing I can do about it.

      You have stable permanent shelter. Don’t undervalue that just because you have to maintain it.

        • Rodeo@lemmy.ca
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          1 year ago

          Rights that allow me just 30 days to pack up and leave.

          Right now the news in my area is rife with “renovictions” and landlords kicking people to “move family in” but they never have to give any proof of those things. There is regulation, but there is no enforcement.

      • papertowels@lemmy.one
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        1 year ago

        Definitely not undervaluing it, however it’s worth pointing out that 20k is over a years worth of rent for a similar property where I’m at.

        Are you renting month to month? Typically where I’m from you sign 1 year long rental agreements, so that is surprising to hear. Additionally, in some states, if the tenant has been living in a location for over a year, the owner has to give two months notice.

        At the end of the day, being financially locked down to a location vs having a “permanent” home, as well as having the opportunity to move wherever you want vs having no permanent home are two sides of the same coins.

        • Rodeo@lemmy.ca
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          1 year ago

          You don’t have the opportunity to move where you want when you’re paying 50% or more of your takehome on rent. As an owner you have way more opportunity because you have equity you can leverage if you want to move. Renters have no equity.

          It is the furthest thing from two sides of the same coin.

          • papertowels@lemmy.one
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            1 year ago

            That sounds like an income vs cost of living issue to me. It wouldn’t really be feasible to move until many, many years in if you were making mortgage payments of 50% or more of your takehome.

            Ngl in this imagined scenario where shelter is taking up 50% of your income, you’re kinda fucked regardless of renting or owning. There’s no way you’d be able to save enough money to replace the roof (25k?) Replace aging sewer pipes (9k to reline, maybe 15k to replace?) Or replace the windows (haven’t gotten quotes for this yet, but I’m dreading it). You’ll have to get financing for those fixes, so that’s even more interest.

            However if you get a better job elsewhere, it is far easier to take advantage of that opportunity if you rent.

            You have no equity when renting, but you also haven’t spent a cent on maintenance, and you don’t have to deal with closing costs, taxes, and whatnot.

            • Rodeo@lemmy.ca
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              1 year ago

              Ngl in this imagined scenario where shelter is taking up 50% of your income

              Imagined? Man, fuck you

              • papertowels@lemmy.one
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                1 year ago

                Again. This sounds like more of an income vs cost of living issue than a renting vs owning issue.

                Shelter taking up more than half your take home income is a rough place to be. If that’s what you’re going through I hope you’re able to get into a better situation soon. Nothing much else to say, just the well wishes of a stranger on the Internet.

                • Rodeo@lemmy.ca
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                  1 year ago

                  No because if I owned a home I would have equity. Spending 50% of your income on shelter is a lot easier to swallow if you’re getting equity out of the deal.

                  If you’re renting, you get fuck nothing, even though you’re still spending money.

                  • papertowels@lemmy.one
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                    1 year ago

                    Out of a 2k+ monthly payment, $400 goes towards paying down the principal.

                    You know how much equity I’d have after 1 year? Less than 5k.

                    You know how much closing costs would be if I sold? Up to 32-40k.

                    I’d need about 8 years of living in the house to build enough equity to just break even when selling

                    This is of course not factoring in a single expensive maintenance item. New roof, new sewer pipes, new HVAC, new water heater will run you ballpark of 50k in maintenance costs, and those are just the big ticket items. Throw those in, and you wouldn’t even break even moving after living somewhere for a decade.

                    If you’re young and still establishing your career, it’s better to have the ability to pursue better job opportunities across the country while renting. In my industry it’s common for folks to find new, higher paying jobs every 3-5 years. Based on my assumptions made, if I move before 8 years, I’d have paid more owning a home than renting due to closing costs.

                    EDIT: This also doesn’t factor in the closing costs you’ve paid as a buyer. I THINK mine were around 10k? I’ll have to check. Google says average rates are between 3-6% of the loan amount so 10k is probably right. So add another 1-2 years before breaking even.