Wednesday, June 6, 2018

The American Dream....or is it?




For roughly 65% of Americans, owning a home means you've realized the American Dream.  Everyone has a vision of living on that picturesque tree-lined street with quaint homes and neatly manicured lawns.  That's what my generation, at least, was taught to aspire to, and there's nothing at all wrong with that.  If you have a young family (or nowadays grandkids living with you), or have a constant stream of out-of-town friends who come to visit, or if you just want bragging rights among your circle of friends, then by all means enjoy your American Dream home.

But frankly, home ownership isn't what it used to be. Things change, people change, and circumstances change. We were told owning a home brought with it huge tax benefits, and it still does....for about a third of us.  Sixty five percent of us own homes, and of those, half either have mortgages with so little balance left (or no mortgage at all) they miss out on the tax break. 

Many people naively think when they get their house paid for they'll be living virtually free.  Hardly!  In my area just the property taxes and homeowners insurance can easily be $1,000 a month on a middle class home.  Speaking of....yes, you can make a handsome profit due to appreciation, at least on paper, but the tax collector wants his money RIGHT NOW!  Rapidly increasing taxes are forcing some homeowners out of the homes they've lived in for decades.

Then there are the maintenance and repair costs.  Yikes!  Here in North Texas we used to have one damaging hail storm every seven years, on average.  Now we're having them yearly, including one just last night that will keep insurance adjusters and roofers busy for the next year.  Homes still need painting, and HVAC systems and water heaters and appliances still need to be repaired/replaced.  Carpets need to be cleaned and/or replaced, too, and wood floors need refinishing.  

And of course there's the lawn maintenance.  *cringe*  And here in termite country, those little bastards will eat your house out from under you if you don't stay ahead of 'em.  Oh, and "updating".  Remember that old fuzzy wallpaper?  Ewww.  Even if those old harvest gold appliances still work, they went out of style back in the Nixon administration.  Get out your wallet.

Even though my credit is primo and the banks say I can easily qualify for a modest home loan, I'm just not feeling it.  Years ago we parked ourselves in a nice apartment while I looked for a small lot to build a new home on.  It didn't take long to realize renting was actually, for me/us, a good alternative to owning.  I've had good neighbors (an OB/GYN, a respiratory therapist, a Realtor, etc), my car is in a secure, gated, concrete parking garage and safe from the weather (hail), and the mechanical units are somebody else's maintenance problem.  And every few years when a newer, nicer community opens up, I'm free to move.  

True, my rent goes up a bit yearly, but no more than my taxes would go up if I owned.  I feel no need to build a home to accommodate my furniture (I have no family heirlooms), I don't need a 3rd or 4th or 5th bedroom, and I jettisoned my ego years ago.  

There will always be quality builders and Realtors to cater to the 65% who want to be homeowners, but there's a lot to be said for nice upscale apartments, too.  The empty nester, downsized lifestyle is actually pretty sweet.   :)

S


11 comments:

  1. I've been a renter all my life. In another period before she lucked onto me, SWMBO and a husband and her father built a home. Nearly caused a breakup with hubby (that came later) and a problem with papa but it all worked out in the end. Except she later lost the house. So it goes.

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  2. I probably could have bought a home in the 2000s but then I would have gotten my ass kicked by the bubble burst in 2008. So it was good I never did. One time I asked a realtor what the difference was between a condo and an apartment and she basically said there's no difference, except a condo you're trapped in a mortgage for 30 years. Though at least if you get a fixed rate mortgage it doesn't go up every year.

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  3. Last year my home cost us $ 686 a month to live in. That is 2700 sq ft 4 bed 2.5 bath with 2 car garage. Up here that would not rent anything I would live in. Someday I know life will change and renting in a nice city would be a good choice.

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    1. Wow! That's cheap living. :) I went from a 3000+ sq ft home @ $2100 a month to an apartment at $1250+/-. We seemed to have settled on roughly 900 sq ft as comfortable for 2 people who have culled all unnecessary "stuff". We first tried a 2 bd/2 bath apartment but found the second bedroom became nothing more that a junk/catch all room. Now we're living lean again. It's actually very pleasant to have everything you need without all the clutter.

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  4. I enjoyed home ownership, even liked yard work most of the time, and even with giving up 50% of my equity twice made out pretty well with the appreciation, but in my current situation I enjoy my townhouse life, wjich come to think of it is still ownership...anyway renting is not a bad deal if you can invest any money saved from home ownership, I think young people lose out by renting because the money they may save from all the cots you mention, they spend on crap because...well because they are young. Home ownership is often forced savings.

    Damn, $1250 for 900 sq ft and parking and a view and security...thats about $2200 in Jersey.

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    1. I don't think I could afford much of anything north of our Red River. Certainly not Jersey. Well, I could, but I just don't want to.

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  5. We have a 4 BR 2 bath house in a gated community, about 2260 square feet. Our mortgage is paid off. If I lived in a 900 sq. ft. apartment in a nice neighborhood anywhere in central Florida, I would pay about 5 to 6 times more in rent than what I pay in taxes and insurance per month. So for us, it makes sense to keeping owning our house. But I agree with you, owning is not for everyone.

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    1. Wow! Either your property taxes there are dirt cheap or your rental rates are through the roof.

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    2. Well, the property taxes are *somewhat* reasonable (in New York, we'd pay three times as much for the same house), but really it's the rental rates. Nobody in Orlando working for Disney or the rest of the tourism branch can afford the rents here.

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