bills_fan Posted May 9, 2008 Share Posted May 9, 2008 If you are selling after 3 years, you would have been better off renting. The only thing you have been paying is interest on the loan, not principal. You'll take a loss. You are NEVER better off renting. First job after school...bought a studio in Hoboken, NJ, sold 2 years later for 10k profit. Bought 1 bedroom on Upper East...sold 3 years later 60k profit. Bought 2 bedroom in Bay Ridge, Brooklyn, sold 2.5 years later...125k profit. I made improvements to all three, but the first two were just asthetic improvements. I sold all 3 properties on craigslist, no broker. Add in the tax deductions and it really is a no-brainer. Link to comment Share on other sites More sharing options...
RayFinkle Posted May 9, 2008 Share Posted May 9, 2008 You are NEVER better off renting. 100% false. It totally depends on your situation and the market where you live. Sometimes you are better off renting, sometimes you are better off buying. Link to comment Share on other sites More sharing options...
Gordio Posted May 9, 2008 Share Posted May 9, 2008 True but also misleading. WNY had none of the real estate value boom over the last 10 years. My home value has decreased in 10% the last year, but it was up 200% in the 9 years before that. Real estate is traditionally a terrible investment. But safe. I agree, you will never see that kind of return in WNY. People just do not make that kind of money here. But what I found interesting in that article was the increase in foreclosures in different cities in the last year. In places like buff/roch/syr foreclosures went up a modest 5-8%. There were places in Calif, florida, Boston that foreclosures were up over 200% from 2yrs ago. If you think about that, that is mind boggling. I believe Calif is a walk away state where you could just simply walk away from the property & the bank can not go after you for the difference so I imagine that is what alot of people did. But still, that is a crazy increase. Link to comment Share on other sites More sharing options...
Chef Jim Posted May 9, 2008 Share Posted May 9, 2008 You are NEVER better off renting. First job after school...bought a studio in Hoboken, NJ, sold 2 years later for 10k profit. Bought 1 bedroom on Upper East...sold 3 years later 60k profit. Bought 2 bedroom in Bay Ridge, Brooklyn, sold 2.5 years later...125k profit. I made improvements to all three, but the first two were just asthetic improvements. I sold all 3 properties on craigslist, no broker. Add in the tax deductions and it really is a no-brainer. I love that. You made a 10k profit? Is that just above and beyond your purchase price? Is so, that's not your profit. Link to comment Share on other sites More sharing options...
John Adams Posted May 9, 2008 Share Posted May 9, 2008 You are NEVER better off renting. ... Add in the tax deductions and it really is a no-brainer. There are so many reasons why renting can be better than buying, not the least of which of course is that renting is less expensive and carries less risk. I trust you're not a financial advisor. Link to comment Share on other sites More sharing options...
bills_fan Posted May 9, 2008 Share Posted May 9, 2008 I love that. You made a 10k profit? Is that just above and beyond your purchase price? Is so, that's not your profit. No, its above and beyond the purchase price, after closing costs, less the cost of any improvements I made and not including tax deductions. I don't know any other way to describe it but "profit." There are so many reasons why renting can be better than buying, not the least of which of course is that renting is less expensive and carries less risk. Renting is not always less expensive. It definately doesn't carry less risk. If you rent for two years, that money is gone...you will never see it again. If you buy, you may make money, lose it, or break even. It is 100% certain that after renting for 2 years, you will have nothing. After two years of owning almost any real estate, you at least have a chance of getting that money back. Link to comment Share on other sites More sharing options...
Chef Jim Posted May 9, 2008 Share Posted May 9, 2008 No, its above and beyond the purchase price, after closing costs, less the cost of any improvements I made and not including tax deductions. I don't know any other way to describe it but "profit." Renting is not always less expensive. Don't forget the interest on the note, the property taxes and HOA fees paid. Don't get me wrong, RE can be a good investment, but the costs associated with are a lot higher than most people realize. Link to comment Share on other sites More sharing options...
kegtapr Posted May 9, 2008 Share Posted May 9, 2008 Don't forget the interest on the note, the property taxes and HOA fees paid. Don't get me wrong, RE can be a good investment, but the costs associated with are a lot higher than most people realize. HOA fees? Yuppie. Link to comment Share on other sites More sharing options...
bills_fan Posted May 9, 2008 Share Posted May 9, 2008 Don't forget the interest on the note, the property taxes and HOA fees paid. Don't get me wrong, RE can be a good investment, but the costs associated with are a lot higher than most people realize. I did not include the tax refunds, so I did not include the interest, taxes and co-op fees (no HOA here). All three components are tax deductible and I received refunds every year. So, to what extent it factored in, I'm not certain. I don't have the desire to go back and figure it all out. Link to comment Share on other sites More sharing options...
Chef Jim Posted May 9, 2008 Share Posted May 9, 2008 HOA fees? Yuppie. Well the first place he said was a condo. Never heard of a place that didn't charge condo fees. And yeah, I'm a yuppie. Link to comment Share on other sites More sharing options...
Chef Jim Posted May 9, 2008 Share Posted May 9, 2008 I did not include the tax refunds, so I did not include the interest, taxes and co-op fees (no HOA here). All three components are tax deductible and I received refunds every year. So, to what extent it factored in, I'm not certain. I don't have the desire to go back and figure it all out. Ok, what about the property taxes. And just because you got a refund doesn't mean there wasn't a net cost. Interest deductions are just that a deduction, not a credit. Link to comment Share on other sites More sharing options...
bills_fan Posted May 9, 2008 Share Posted May 9, 2008 Ok, what about the property taxes. And just because you got a refund doesn't mean there wasn't a net cost. Interest deductions are just that a deduction, not a credit. I said taxes. And it was not a condo, but a co-op. All of my apt were co-ops. A co-op is a uniquely NY thing, essentially it is a real estate corporation that owns the building. You buy shares in that corporation, entitling you to occupy your apartment. Its helpful to think of the shares are the same thing as a deed. The shares are pledged for the mortgage. The interest on the shares is deductible, same as on a mortgage. The property taxes. You don't pay prop taxes on your apt, but the corporation pays them on the whole building. You pay maintenance to the corporation every month. All of the buildings I have owned a co-op, the maintenance also included heat, hot water and electricity. So, you pay $500 per month, for example, and 60% of that is tax deductible (the prop tax portion of the maintenance). There are no separate co-op fees, it is included in the monthly maintenance. Link to comment Share on other sites More sharing options...
John Adams Posted May 9, 2008 Share Posted May 9, 2008 It definately doesn't carry less risk. If you rent for two years, that money is gone...you will never see it again. If you buy, you may make money, lose it, or break even. It is 100% certain that after renting for 2 years, you will have nothing. After two years of owning almost any real estate, you at least have a chance of getting that money back. What happens when your roof leaks in your house? You pay for a new roof. Need paint? Paint. Etc. When you rent, you call the landlord. Less risk. Renting 2000 sf should be less than buying 2000 sf, so although your rent money may be spent, the difference between rent and mortgage (mostly interest in beginning), taxes, and home maintenance is usually bound to leave you with more cash. Most people yearn for a house but it often makes a lot of sense to rent. Link to comment Share on other sites More sharing options...
gmac17 Posted May 9, 2008 Share Posted May 9, 2008 You are NEVER better off renting. Come on. Buying in general over the long term is certainly wiser, but there are plenty of people out there right now who are wishing they had kept on renting rather than buy. If you were thinking of buying or renting in florida or arizona or california around 2006 and took that advice you aren't so happy with things these days. And how did you only make $10k on your place in Hoboken?? Link to comment Share on other sites More sharing options...
bills_fan Posted May 9, 2008 Share Posted May 9, 2008 And how did you only make $10k on your place in Hoboken?? It was a really small studio, a long walk from the Path. What happens when your roof leaks in your house? You pay for a new roof. Need paint? Paint. Etc. When you rent, you call the landlord. Less risk. True. But if you bought the house, you are essentially paying yourself. If you rent, that money you pay every month goes out the window. Never to be seen again. Renting 2000 sf should be less than buying 2000 sf, so although your rent money may be spent, the difference between rent and mortgage (mostly interest in beginning), taxes, and home maintenance is usually bound to leave you with more cash.. Agreed. You will have more cash up front. Most people yearn for a house but it often makes a lot of sense to rent. At least an apt. Houses suck. Link to comment Share on other sites More sharing options...
Fan in San Diego Posted May 9, 2008 Share Posted May 9, 2008 True but also misleading. WNY had none of the real estate value boom over the last 10 years. My home value has decreased in 10% the last year, but it was up 200% in the 9 years before that. Real estate is traditionally a terrible investment. But safe. Wow ! Funniest thing I've read all day ! Link to comment Share on other sites More sharing options...
John Adams Posted May 9, 2008 Share Posted May 9, 2008 Wow ! Funniest thing I've read all day ! Right, because despite the historical evidence that real estate barely outpaces inflation, you're here to tell us about the millions you've made in real estate...again. In two times, real estate boomed. Right after WWII when the vets returned home and wanted to start families and the last decade. Besides those times, it has been a stagnant, albeit relatively safe, investment. We've been through this. Now is where you brag about the money you've made in real estate. I post facts. You brag on an Internet message board. Link to comment Share on other sites More sharing options...
Fan in San Diego Posted May 10, 2008 Share Posted May 10, 2008 Right, because despite the historical evidence that real estate barely outpaces inflation, you're here to tell us about the millions you've made in real estate...again. In two times, real estate boomed. Right after WWII when the vets returned home and wanted to start families and the last decade. Besides those times, it has been a stagnant, albeit relatively safe, investment. We've been through this. Now is where you brag about the money you've made in real estate. I post facts. You brag on an Internet message board. Where do you live John Adams? I'm willing to bet it's not California, Florida, Nevada. Point being, don't knock it if you haven't profited by it. Where have I lost the most money? Stocks! That's why I focus on real estate. I can control alot more of the variables. By the way, you come off sounding very bitter and jealous or something. Link to comment Share on other sites More sharing options...
John Adams Posted May 10, 2008 Share Posted May 10, 2008 I deeply care what you think and am content to keep my finances to myself, unlike you. Link to comment Share on other sites More sharing options...
thebug Posted May 10, 2008 Share Posted May 10, 2008 Wow..... housing market is a sellers market where I am (Northern Ontario) My house is worth 60,000 more then it was 6 years ago when I bought it...... On my street 2 houses sold last week on the first day listed and both had multiple offers and sold above list price.....realtors have been leaving their cards in my mailbox ever since. Link to comment Share on other sites More sharing options...
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