As I’ve grown older, with a number of poorly timed decisions, I think a lot about this topic of Home. I’ve evolved to some sort of philosophy of first principles.
In the case of a Home, the first principle is everyone needs shelter. There are any number of options: homeless shelter, couch crashing, rental, ownership.
There are advantages and disadvantages with each option. Renting gives a lot of flexibility, but relatively less stability. Owning (I’ve come to the notion we don’t own much – rather we are stewards of assets) must recognize the total cost of ownership. Repairs, insurance, capital replacements, etc. are sometimes overlooked or ignored in the calculation of rent vs own.
Cutting to the chase, I believe the real calculus is whether one prefers flexibility or stability.
A home (in a state with real estate taxes) used to be a good investment, but not any more. Significant appreciation into the future is unlikely because homes will become unaffordable. Taxes keep rising, and can easily exceed $1,000/month. Repairs, improvements, maintenance and other costs also keep rising.
But there is nothing like having your own place, especially if you have a bit of a buffer where you have some privacy and can get some peace and quiet.
How to save money on a home? Find the sweet spot where you get community value without a huge tax bite. Buy a home in very good condition in a stable neighborhood. Have a lot where you can easily cut the lawn and trim the shrubs yourself in an afternoon, and if you want more space, have the rest be undeveloped. Do your own lawn treatments for crabgrass, clover, grubs and the like. Get your house fully treated for termites the month you move in, just as if it has never had any treatment before. Have a mortgage as low as you can manage. Be willing to spend money on maintaining the core systems, because that will save you money in the long run. And always look out for water – water is the enemy in a house, from the roof, to an internal leak, to seepage and basement backups, and lots more!
Like most things, it depends. Our home is a black hole for money. I live in the failed state of Illinois and property taxes are insane. I pay much more for property tax than I do for P and I. Even after we pay off the mortgage, the taxes will remain. I live in an affluent area, so services like landscaping and home improvements are quite expensive since vendors sense that if we live here, we can afford it. That said, we live in a beautiful neighbor hood with great amenities that is a short drive to the beach and the city. There are many 100-year old trees and brick streets. The schools are excellent. Many people move out soon after their last kid graduates; we may consider that option. I definitely have mixed feelings – I like it here, but my financial soul is horrified that I live here.
In the United States, home ownership has traditionally enjoyed some favored government benefits including the tax deductible home mortgage, deductible real estate taxes, and various energy improvement tax credits.
Comparing the cost of renting to home ownership typically shows the economic benefits favor the home owner over long periods of time. This has typically been a form of forced long term savings.
Personally my wife and I had a huge burden lifted when we paid off the mortgage of our home. It really lowered the risk of home ownership, and even when we later moved we were able to tax shelter the gain by buying a more expensive house and ultimately tax shelter the gain when we finally do sell after age 55.
Besides the freedom to renovate and restore the property. we also enjoyed the pride of home ownership. It adds a LOT of benefit to your life to be secure and stable.
I was shocked recently when i saw the movie Nomadland about the rise of the mobile RV lifestyle. I am very grateful for my blessings in owning a home.
Yes. We now grow about 50% of our produce in our own backyard – organic and in an area where we have four seasons and can grow stuff for only half the year. We can paint the walls any color we like, remodel any way we want. It is a place we en
As I’ve grown older, with a number of poorly timed decisions, I think a lot about this topic of Home. I’ve evolved to some sort of philosophy of first principles.
In the case of a Home, the first principle is everyone needs shelter. There are any number of options: homeless shelter, couch crashing, rental, ownership.
There are advantages and disadvantages with each option. Renting gives a lot of flexibility, but relatively less stability. Owning (I’ve come to the notion we don’t own much – rather we are stewards of assets) must recognize the total cost of ownership. Repairs, insurance, capital replacements, etc. are sometimes overlooked or ignored in the calculation of rent vs own.
Cutting to the chase, I believe the real calculus is whether one prefers flexibility or stability.
A home (in a state with real estate taxes) used to be a good investment, but not any more. Significant appreciation into the future is unlikely because homes will become unaffordable. Taxes keep rising, and can easily exceed $1,000/month. Repairs, improvements, maintenance and other costs also keep rising.
But there is nothing like having your own place, especially if you have a bit of a buffer where you have some privacy and can get some peace and quiet.
How to save money on a home? Find the sweet spot where you get community value without a huge tax bite. Buy a home in very good condition in a stable neighborhood. Have a lot where you can easily cut the lawn and trim the shrubs yourself in an afternoon, and if you want more space, have the rest be undeveloped. Do your own lawn treatments for crabgrass, clover, grubs and the like. Get your house fully treated for termites the month you move in, just as if it has never had any treatment before. Have a mortgage as low as you can manage. Be willing to spend money on maintaining the core systems, because that will save you money in the long run. And always look out for water – water is the enemy in a house, from the roof, to an internal leak, to seepage and basement backups, and lots more!
Like most things, it depends. Our home is a black hole for money. I live in the failed state of Illinois and property taxes are insane. I pay much more for property tax than I do for P and I. Even after we pay off the mortgage, the taxes will remain. I live in an affluent area, so services like landscaping and home improvements are quite expensive since vendors sense that if we live here, we can afford it. That said, we live in a beautiful neighbor hood with great amenities that is a short drive to the beach and the city. There are many 100-year old trees and brick streets. The schools are excellent. Many people move out soon after their last kid graduates; we may consider that option. I definitely have mixed feelings – I like it here, but my financial soul is horrified that I live here.
In the United States, home ownership has traditionally enjoyed some favored government benefits including the tax deductible home mortgage, deductible real estate taxes, and various energy improvement tax credits.
Comparing the cost of renting to home ownership typically shows the economic benefits favor the home owner over long periods of time. This has typically been
a form of forced long term savings.
Personally my wife and I had a huge burden lifted when we paid off the mortgage of our home. It really lowered the risk of home ownership, and even when we later moved we were able to tax shelter the gain by buying a more expensive house and ultimately tax shelter the gain when
we finally do sell after age 55.
Besides the freedom to renovate and restore the property. we also enjoyed the pride of home ownership. It adds a LOT of benefit to your life to be secure and stable.
I was shocked recently when i saw the movie Nomadland about the rise of the mobile RV lifestyle. I am very grateful for my blessings in owning a home.
Yes. We now grow about 50% of our produce in our own backyard – organic and in an area where we have four seasons and can grow stuff for only half the year. We can paint the walls any color we like, remodel any way we want. It is a place we en