Thanks, Housing Collapse!
March 9, 2012 2:15 PM Subscribe
14 Year Old Buys House in Florida Meet Willow Tufano, age 14: Lady Gaga fan, animal lover, landlord.
It's hard for Willow to see herself as symbolic of anything. To a 14 year-old kid in Florida, the housing collapse is basically the only world she's known. It's the landscape. It's a Craigslist hobby.
It's hard for Willow to see herself as symbolic of anything. To a 14 year-old kid in Florida, the housing collapse is basically the only world she's known. It's the landscape. It's a Craigslist hobby.
Sort of misleading headline. 14 year old girl saved enough money to buy half of a foreclosed home, mom helps out with the other half.
posted by roomthreeseventeen at 2:19 PM on March 9, 2012 [3 favorites]
posted by roomthreeseventeen at 2:19 PM on March 9, 2012 [3 favorites]
I'm short on rent this month, Ms. Tufano. Would you take pogs as a substitute for cash?
"What's a pog?" Oh, never mind. How about Pokemon cards? What are those? Oy.
posted by not_on_display at 2:20 PM on March 9, 2012 [10 favorites]
"What's a pog?" Oh, never mind. How about Pokemon cards? What are those? Oy.
posted by not_on_display at 2:20 PM on March 9, 2012 [10 favorites]
Sort of misleading headline. 14 year old girl saved enough money to buy half of a foreclosed home, mom helps out with the other half.
14-year-old girl sold foreclosed owners' possessions on Craigslist for enough money to buy half of a foreclosed home. She may be enterprising, but is it really "saving" if someone just gives you the valuables?
posted by Nomyte at 2:22 PM on March 9, 2012 [7 favorites]
14-year-old girl sold foreclosed owners' possessions on Craigslist for enough money to buy half of a foreclosed home. She may be enterprising, but is it really "saving" if someone just gives you the valuables?
posted by Nomyte at 2:22 PM on March 9, 2012 [7 favorites]
Did anyone else have Ira Glass' voice in their head while reading this?
posted by ben242 at 2:24 PM on March 9, 2012 [3 favorites]
posted by ben242 at 2:24 PM on March 9, 2012 [3 favorites]
Well good for her, then.
posted by (Arsenio) Hall and (Warren) Oates at 2:27 PM on March 9, 2012
posted by (Arsenio) Hall and (Warren) Oates at 2:27 PM on March 9, 2012
She'll do quite well at Goldman Sachs it seems.
posted by symbioid at 2:27 PM on March 9, 2012 [5 favorites]
posted by symbioid at 2:27 PM on March 9, 2012 [5 favorites]
...and landlording is the use she puts it to?
posted by Pope Guilty at 2:30 PM on March 9, 2012
posted by Pope Guilty at 2:30 PM on March 9, 2012
$700 a month to rent a $12,000 home?
posted by Missiles K. Monster at 2:30 PM on March 9, 2012 [26 favorites]
posted by Missiles K. Monster at 2:30 PM on March 9, 2012 [26 favorites]
$700 a month to rent a $12,000 home?
Willow Tufano isn't symbolic of anything -- and if anything, I think 'good for her and her mom' -- but those numbers don't lie and symbolize a whole lot of crazy.
posted by MCMikeNamara at 2:32 PM on March 9, 2012
Willow Tufano isn't symbolic of anything -- and if anything, I think 'good for her and her mom' -- but those numbers don't lie and symbolize a whole lot of crazy.
posted by MCMikeNamara at 2:32 PM on March 9, 2012
I dunno if houses are cheaper or what but in the midwestern towns I've lived in $600 has generally bought you a crappy apartment, so $700 sounds pretty good for a house.
posted by Pope Guilty at 2:38 PM on March 9, 2012 [5 favorites]
posted by Pope Guilty at 2:38 PM on March 9, 2012 [5 favorites]
There are indeed some markets where you can find very favorable house (or apartment complex) prices vs rental rates. My parents looked into this, and jumped into the real estate market in Texas for this exact reason (too hastily, but that's another story for another time).
posted by filthy light thief at 2:43 PM on March 9, 2012
posted by filthy light thief at 2:43 PM on March 9, 2012
Pope Guilty Florida is pretty large and diverse - I know parts of my weird state where $700 a month will get you a 3/3+, and other parts where it'll get you 1/0.5. No mention of city (or even county) is forthcoming.
posted by the man of twists and turns at 2:44 PM on March 9, 2012
posted by the man of twists and turns at 2:44 PM on March 9, 2012
Those are strange numbers. I didn't know there was anywhere in America $700/month could buy you a 2-bedroom anything. I think the $12k number must reflect the terrible condition the house was in, and they spent a lot of time and money cleaning it up?
posted by drjimmy11 at 2:46 PM on March 9, 2012
posted by drjimmy11 at 2:46 PM on March 9, 2012
I dunno if houses are cheaper or what but in the midwestern towns I've lived in $600 has generally bought you a crappy apartment, so $700 sounds pretty good for a house.
I think $700/mo would be a pretty sweet deal for a house in tons of places but that ratio of home prices to rents is absurd and there must be a lot of weirdness going on in that market.
posted by ghharr at 2:46 PM on March 9, 2012
I think $700/mo would be a pretty sweet deal for a house in tons of places but that ratio of home prices to rents is absurd and there must be a lot of weirdness going on in that market.
posted by ghharr at 2:46 PM on March 9, 2012
Yeah, there's a minimum price to livable housing, sort of like with cars; you'll pay $1000-2000ish (depending on reigion) for a car that runs, but the cars at that price level run the gamut of age and condition. To get lower than that, something on the car needs to be fixed before it will run. Same with housing; I remember in Chicago twenty years ago, getting a studio below $425 was impossible, regardless of how crappy your north side neighborhood choice was -- a reflection of the property taxes that needed to be paid and maintenance that needs to be done, even if the building is paid for.
posted by davejay at 2:47 PM on March 9, 2012
posted by davejay at 2:47 PM on March 9, 2012
Also the landlord is responsible for maintenance and probably some utilities and taxes, right? So there must be a floor for how little rent you can charge and make a profit? Just because a house is cheap it buy it's still a house and maintenance is going to cost money.
posted by drjimmy11 at 2:47 PM on March 9, 2012 [2 favorites]
posted by drjimmy11 at 2:47 PM on March 9, 2012 [2 favorites]
yea $700/mo will barely get you a miserable hovel studio in student hell here in Boulder. Plus I'm betting the rentals market is at a premium in heavily foreclosed areas.
posted by lonefrontranger at 2:48 PM on March 9, 2012 [1 favorite]
posted by lonefrontranger at 2:48 PM on March 9, 2012 [1 favorite]
I'm gonna get flack for this, but...do you think her Mom may mind that she's apparently renting the house to Jesse Pinkman?
posted by adamms222 at 2:49 PM on March 9, 2012 [3 favorites]
posted by adamms222 at 2:49 PM on March 9, 2012 [3 favorites]
We rented a 2 bedroom duplex in Durham, NC for less than $700. The very nice 3 bedroom/2 bath house next door was up to $850 the last I heard. I think some of you may live in rather overinflated housing markets.
posted by hydropsyche at 2:52 PM on March 9, 2012 [3 favorites]
posted by hydropsyche at 2:52 PM on March 9, 2012 [3 favorites]
This came up yesterday. Here in Las Vegas, a nice 3br, $100K house (with 30-year-mortgage) will set you back <$500, including taxes and insurance. This is mainly a reflection of ridiculously low interest rates.
That same house would be at least $1000 per month + utilities to rent.
posted by coolguymichael at 2:52 PM on March 9, 2012 [1 favorite]
That same house would be at least $1000 per month + utilities to rent.
posted by coolguymichael at 2:52 PM on March 9, 2012 [1 favorite]
$700 a month to rent a $12,000 home?
Rental prices and purchase prices are only somewhat connected. I mean, just because I might buy a house super cheap does not mean that I will rent it for less money, nor would my paying top dollar for the house mean that I could rent it for more.
posted by Forktine at 2:53 PM on March 9, 2012 [2 favorites]
Rental prices and purchase prices are only somewhat connected. I mean, just because I might buy a house super cheap does not mean that I will rent it for less money, nor would my paying top dollar for the house mean that I could rent it for more.
posted by Forktine at 2:53 PM on March 9, 2012 [2 favorites]
also I'm thinking that due to various tax / legal and business concerns, as a minor she's going to pretty much have to do this joint with her parent / guardian as signatory. She is planning to buy her mom out at 18.
heh Jesse Pinkman indeed.
posted by lonefrontranger at 2:54 PM on March 9, 2012
heh Jesse Pinkman indeed.
posted by lonefrontranger at 2:54 PM on March 9, 2012
Technically, she sold other people's furniture from foreclosed homes on Craig's List (which is a really sweet deal, and a smart move on her part) and then bought half of a foreclosed home for $6000, which she doesn't really own because she's a minor.
I'll bet they put a LOT of work into it before they rented it (The place was a mess when they bought it — "like there was a riot or something," Willow says), and I'm sure it's now valued at close to the original $100K it was appraised for once again.
Willow seems like she's got a really good head on her shoulders. She's 14 and she's already got a better understanding of the housing market, the actual value of real estate and the house sitting on it as opposed to the appraised value(which shifts along with the market), and the work that goes into fixing up and maintaining up a house than a lot of adults I know. Good for her.
posted by misha at 3:05 PM on March 9, 2012 [9 favorites]
I'll bet they put a LOT of work into it before they rented it (The place was a mess when they bought it — "like there was a riot or something," Willow says), and I'm sure it's now valued at close to the original $100K it was appraised for once again.
Willow seems like she's got a really good head on her shoulders. She's 14 and she's already got a better understanding of the housing market, the actual value of real estate and the house sitting on it as opposed to the appraised value(which shifts along with the market), and the work that goes into fixing up and maintaining up a house than a lot of adults I know. Good for her.
posted by misha at 3:05 PM on March 9, 2012 [9 favorites]
Afroblanco: "Florida is sort of the reductio ad absurdum of America."
This is very very very very true and hat tip to you for putting it into words.
posted by falameufilho at 3:17 PM on March 9, 2012
This is very very very very true and hat tip to you for putting it into words.
posted by falameufilho at 3:17 PM on March 9, 2012
You couldn't wear your pants any lower, so you made tiny pants for each leg! SAY IT!
posted by Inspector.Gadget at 3:28 PM on March 9, 2012 [6 favorites]
posted by Inspector.Gadget at 3:28 PM on March 9, 2012 [6 favorites]
Maybe he stole her pants and combined them with his shorts
posted by nathancaswell at 3:34 PM on March 9, 2012
posted by nathancaswell at 3:34 PM on March 9, 2012
I wonder if the property taxes are still based on the $100,000 top-of-the-market valuation.
In CA at least, the last time the house sold sets the valuation unless you are either trying to get the value reassessed lower between sales (at which point sales in your area become important), or you engaged in some kind of sham transaction with a family member to dodge taxes (which also gets the IRS on your case).
posted by BrotherCaine at 3:36 PM on March 9, 2012
In CA at least, the last time the house sold sets the valuation unless you are either trying to get the value reassessed lower between sales (at which point sales in your area become important), or you engaged in some kind of sham transaction with a family member to dodge taxes (which also gets the IRS on your case).
posted by BrotherCaine at 3:36 PM on March 9, 2012
Wait, those are the tenants? I thought they were her school buddies.
posted by kmz at 3:36 PM on March 9, 2012
posted by kmz at 3:36 PM on March 9, 2012
pic
Oh it's a meth house. This all suddenly makes a lot more sense.
posted by 2bucksplus at 3:41 PM on March 9, 2012 [3 favorites]
Oh it's a meth house. This all suddenly makes a lot more sense.
posted by 2bucksplus at 3:41 PM on March 9, 2012 [3 favorites]
Power to her. Yes, she got help from her mom, but a lot of us do. She also saw an opportunity in selling crap that other people were probably ready to pay other people to get rid of. This is the best sort of hands-on, real world learning. Even with taxes, she'll likely have that place paid off by her college graduation, should she choose to go. Good on her.
posted by smirkette at 3:44 PM on March 9, 2012 [2 favorites]
posted by smirkette at 3:44 PM on March 9, 2012 [2 favorites]
$700 a month to rent a $12,000 home?
Oh if only we had that dynamic at work in my neck of the woods, instead of the opposite of $1400 a month rent on a $300,000 apartment.
posted by barc0001 at 4:05 PM on March 9, 2012
Oh if only we had that dynamic at work in my neck of the woods, instead of the opposite of $1400 a month rent on a $300,000 apartment.
posted by barc0001 at 4:05 PM on March 9, 2012
I'm confused. Why was the furniture in the foreclosed homes the property of anyone but those foreclosed upon to sell? The charge surely doesn't extend to furnishings. I don't see how it possibly could.
posted by howfar at 4:21 PM on March 9, 2012
posted by howfar at 4:21 PM on March 9, 2012
The furniture ended up being owned by another investor who then gave it to the girl.
posted by snsranch at 4:29 PM on March 9, 2012
posted by snsranch at 4:29 PM on March 9, 2012
The World Famous: "I wonder if the property taxes are still based on the $100,000 top-of-the-market valuation."
Some folks I know in Orlando have had their tax valuation drop by nearly $400,000 in the last three years, so I doubt it. And they'd probably still get $1500-$2000 a month if they rented it out even though it's unlikely they could sell it at any price.
posted by wierdo at 4:38 PM on March 9, 2012
Some folks I know in Orlando have had their tax valuation drop by nearly $400,000 in the last three years, so I doubt it. And they'd probably still get $1500-$2000 a month if they rented it out even though it's unlikely they could sell it at any price.
posted by wierdo at 4:38 PM on March 9, 2012
The furniture was probably abandoned by people who got foreclosed upon. Some people are in quite the hurry when it is time to leave and don't take it all with them.
posted by Phantomx at 4:53 PM on March 9, 2012
posted by Phantomx at 4:53 PM on March 9, 2012
Point being, this mother's and her daughter's modus operandi seems to be, essentially, taking advantage of the misfortune of others. Why not donate these (apparently still valuable) items to charity? What's the lesson here? "Doing business in a distressed area is profitable"? This strikes me as a very Harry Lime kind of business acumen.
posted by Nomyte at 5:00 PM on March 9, 2012 [3 favorites]
posted by Nomyte at 5:00 PM on March 9, 2012 [3 favorites]
I bet you anything that the stuff that she took over and sold would have been either thrown out or left to rot. She is doing something with property that most businesspeople would not bother with. she's awesome.
posted by 5_13_23_42_69_666 at 5:20 PM on March 9, 2012 [6 favorites]
posted by 5_13_23_42_69_666 at 5:20 PM on March 9, 2012 [6 favorites]
One of the mom's investor buddies purchased a foreclosure that was filled with stuff. The kid asked about it and he gave her permission to sell it. Reading between the lines, it sounds like it happened more than once. She accumulated some decent $.
Yea, it sucks that someone lost their property, but this is totally legit. My own kids are pretty academic and uni bound, but I still try to instill in them the crap I learned from my grandparents and other old folks...you have to be able to live by your wit and be willing and able to work a legitimate hustle. Just like this girl did, save up in order to be prepared for the next opportunity. Especially these days, you can't count on finding a regular 9 to 5er. Ya gotta hustle.
posted by snsranch at 5:21 PM on March 9, 2012 [3 favorites]
Yea, it sucks that someone lost their property, but this is totally legit. My own kids are pretty academic and uni bound, but I still try to instill in them the crap I learned from my grandparents and other old folks...you have to be able to live by your wit and be willing and able to work a legitimate hustle. Just like this girl did, save up in order to be prepared for the next opportunity. Especially these days, you can't count on finding a regular 9 to 5er. Ya gotta hustle.
posted by snsranch at 5:21 PM on March 9, 2012 [3 favorites]
The furniture was probably abandoned by people who got foreclosed upon. Some people are in quite the hurry when it is time to leave and don't take it all with them.
Or maybe sometimes people who have been foreclosed upon don't have a place to put furniture.
posted by snofoam at 5:44 PM on March 9, 2012 [5 favorites]
Or maybe sometimes people who have been foreclosed upon don't have a place to put furniture.
posted by snofoam at 5:44 PM on March 9, 2012 [5 favorites]
Yeah, I'm totally not getting the hating on this kid. Good for her. It's not like she's the robosigner at fannie mae, or the person who put the CD swaps together, or signed adjustable rate mortgages without understanding how compound interest works.
She's not taking advantage of anyone. Good for her. And $700 rent is probably pretty rational given taxes, improvements, upkeep, etc.
posted by dejah420 at 5:56 PM on March 9, 2012 [3 favorites]
She's not taking advantage of anyone. Good for her. And $700 rent is probably pretty rational given taxes, improvements, upkeep, etc.
posted by dejah420 at 5:56 PM on March 9, 2012 [3 favorites]
I don't know. That "ya gotta hustle" attitude strikes me as a bit like the sort of romanticisation of the leveraging of economic advantage that allows Rupert Murdoch to seemingly regard himself as a scrappy underdog billionaire. As for being legitimate, well, yes, possession is nine tenths of the law and all that, but taking advantage of the fact that someone has been forced to abandon their property hardly seems like the equitable approach to business.
Not attacking the kid. I just find this more depressing than heartwarming.
posted by howfar at 6:01 PM on March 9, 2012 [6 favorites]
Not attacking the kid. I just find this more depressing than heartwarming.
posted by howfar at 6:01 PM on March 9, 2012 [6 favorites]
I wonder if the property taxes are still based on the $100,000 top-of-the-market valuation.
Here in LA they send me a letter telling me what the new appraised value is when taxes are due. If I thought it was too high I could get my own I guess, but theirs seems pretty fair actually.
posted by Justinian at 6:26 PM on March 9, 2012
Here in LA they send me a letter telling me what the new appraised value is when taxes are due. If I thought it was too high I could get my own I guess, but theirs seems pretty fair actually.
posted by Justinian at 6:26 PM on March 9, 2012
I am not surprised that she can charge $700 in rent for a $12k house. It is nearly impossible to get a mortgage for less than about $40K, it just isn't worth it to the bank. So what happens is the people who should be prime candidates to purchase these really low price homes can't pay cash and can't get a mortgage: when the only option is to rent there is a really strong market for lower cost spaces.
It is a shame, a lot of these renters have good credit histories and would be good homeowners.
posted by roquetuen at 6:39 PM on March 9, 2012
It is a shame, a lot of these renters have good credit histories and would be good homeowners.
posted by roquetuen at 6:39 PM on March 9, 2012
Blame the banks and lenders and their predatory business practices for the foreclosures.
This kid really did have a "hustle". She took some junk that was likely going to be tossed and made something of it. Good for her! The economy is rough as hell, many of us are worried about job security and she is giving us just one example of how any one of us can make some extra cash and maybe even start our own business.
That is good stuff.
posted by snsranch at 6:43 PM on March 9, 2012
This kid really did have a "hustle". She took some junk that was likely going to be tossed and made something of it. Good for her! The economy is rough as hell, many of us are worried about job security and she is giving us just one example of how any one of us can make some extra cash and maybe even start our own business.
That is good stuff.
posted by snsranch at 6:43 PM on March 9, 2012
Some people are in quite the hurry when it is time to leave and don't take it all with them.
And Most people aren't allowed time to take even most possessions if they do have a place for them. They don't get much time really to take things out. I've watched police stand there for an hour, then lock the doors, no matter how much or little was taken out. So i say, screw this girl. She's part of what is wrong now, along with the celebrating of her.
Ya gotta hustle.
Just like all the other thieves and robbers out there sounds like.
posted by usagizero at 6:44 PM on March 9, 2012 [5 favorites]
And Most people aren't allowed time to take even most possessions if they do have a place for them. They don't get much time really to take things out. I've watched police stand there for an hour, then lock the doors, no matter how much or little was taken out. So i say, screw this girl. She's part of what is wrong now, along with the celebrating of her.
Ya gotta hustle.
Just like all the other thieves and robbers out there sounds like.
posted by usagizero at 6:44 PM on March 9, 2012 [5 favorites]
$700 a month to rent a $12,000 home?
Not surprising. The rental market here in FL has become very tight because banks aren't loaning money and people aren't buying homes.
posted by photoslob at 6:54 PM on March 9, 2012
Not surprising. The rental market here in FL has become very tight because banks aren't loaning money and people aren't buying homes.
posted by photoslob at 6:54 PM on March 9, 2012
She took some junk that was likely going to be tossed and made something of it...just one example of how any one of us can make some extra cash
I'm not really sure that is the case. I understand that what this girl did took imagination, dedication and ability. However, it also depended on having free access to fairly valuable goods, support, capital, time and an economic safety-net. A free-market isn't a level playing field, and what is feasible for one person may not even be possible for another.
I understand that I'm bringing my preconceptions to this too, and without more facts, that is how it will remain. I guess the whole idea of taking an opportunity arising out of someone else's misfortune and using it to make myself richer is just not the sort of thing I see as being a social or moral good. That's a much bigger and very different argument, however, and it's certainly not one that I want to use a fourteen year old child as a weapon in. Good luck to her, then; we're all just doing our best. I just can't help wishing for slightly better luck for those whose truly horrible loss gave rise to her opportunity.
posted by howfar at 7:20 PM on March 9, 2012 [4 favorites]
I'm not really sure that is the case. I understand that what this girl did took imagination, dedication and ability. However, it also depended on having free access to fairly valuable goods, support, capital, time and an economic safety-net. A free-market isn't a level playing field, and what is feasible for one person may not even be possible for another.
I understand that I'm bringing my preconceptions to this too, and without more facts, that is how it will remain. I guess the whole idea of taking an opportunity arising out of someone else's misfortune and using it to make myself richer is just not the sort of thing I see as being a social or moral good. That's a much bigger and very different argument, however, and it's certainly not one that I want to use a fourteen year old child as a weapon in. Good luck to her, then; we're all just doing our best. I just can't help wishing for slightly better luck for those whose truly horrible loss gave rise to her opportunity.
posted by howfar at 7:20 PM on March 9, 2012 [4 favorites]
Fascinating...
So exactly which unnamed Florida city is Willow based out of?
Is this an Onion article?
posted by ovvl at 7:24 PM on March 9, 2012
So exactly which unnamed Florida city is Willow based out of?
Is this an Onion article?
posted by ovvl at 7:24 PM on March 9, 2012
$700 a month sounds about right. A friend of mine in Macon, GA is renting a 1920's 2/1 with high ceilings, a big front porch, and room to spare (dining room, office, utility room etc.) for $400 a month. In some places, rent is just ridiculously cheap.
posted by Maaik at 7:33 PM on March 9, 2012
posted by Maaik at 7:33 PM on March 9, 2012
In some places, rent is just ridiculously cheap
I think the point is that when less than 18 months' rent would cover the entire purchase value of the property there is something deeply wrong with your housing market.
posted by howfar at 7:44 PM on March 9, 2012 [3 favorites]
I think the point is that when less than 18 months' rent would cover the entire purchase value of the property there is something deeply wrong with your housing market.
posted by howfar at 7:44 PM on March 9, 2012 [3 favorites]
In fact, there's a line in Twelfth Night which seems amusingly appropriate.
Feste: By my troth, thou hast an open hand. These wise men
that give fools money get themselves a good
report—after fourteen years' purchase.
posted by howfar at 7:50 PM on March 9, 2012
Feste: By my troth, thou hast an open hand. These wise men
that give fools money get themselves a good
report—after fourteen years' purchase.
posted by howfar at 7:50 PM on March 9, 2012
Oh, the irony that adults can't buy a house and a 14-year-old can.
posted by jenfullmoon at 9:15 PM on March 9, 2012
posted by jenfullmoon at 9:15 PM on March 9, 2012
Without the contacts her mother had through her real estate business, Willow wouldn't have had access to the abandoned things she sold to buy her stake. There's some fairly solid privilege this kid has access too.
Point being, this mother's and her daughter's modus operandi seems to be, essentially, taking advantage of the misfortune of others. Why not donate these (apparently still valuable) items to charity?
Whole houses of furniture need space to be stored, need to be moved and cared for till a new owner can be found. "Give it to charity" can be a bigger hassle than letting some local kid sell it off, especially when there's a lot of these sorts of houses around. There's an awful lot of logistics involved, and if your area doesn't have the infrastructure to handle it, you can really burden a charity with large items. A lot of donation oriented charities in my area are reluctant to take whole houses worth of stuff.
posted by Jilder at 10:05 PM on March 9, 2012
Point being, this mother's and her daughter's modus operandi seems to be, essentially, taking advantage of the misfortune of others. Why not donate these (apparently still valuable) items to charity?
Whole houses of furniture need space to be stored, need to be moved and cared for till a new owner can be found. "Give it to charity" can be a bigger hassle than letting some local kid sell it off, especially when there's a lot of these sorts of houses around. There's an awful lot of logistics involved, and if your area doesn't have the infrastructure to handle it, you can really burden a charity with large items. A lot of donation oriented charities in my area are reluctant to take whole houses worth of stuff.
posted by Jilder at 10:05 PM on March 9, 2012
howfar: In some places, rent is just ridiculously cheapThis. 14-year-old Willow didn't invent the game, but it's still a twisted one where rent is a form of slow-motion theft, so I can hate on her for being symptomatic whether she's aware or not.
I think the point is that when less than 18 months' rent would cover the entire purchase value of the property there is something deeply wrong with your housing market.
If the people who are renting the house can afford $700/mo, then a 'healthy' lending market would ensure they were able to buy the house outright on a payment plan that would have them pay off the entire home in 3-4 years... with a 100% profit margin for the lender. Maybe it isn't even where they'd want to live, but if you were going to rent it for one year, and then knew that if you just stuck around two more years you'd own the place outright... most renters in that situation would do so. I don't know what the property taxes of Florida are like in that area, but almost certainly unless the house was reassessed at $100k again, the renter/owners wouldn't see their "rent" go up too much to cover the taxes/insurance, and in 3-4 years they'd see a huge drop in monthly costs as basically they'd be paying a pittance to still live there.
That lenders aren't doing this is one of the ways the system is terribly broken. And as a terribly perfect representation of this, a 14-year-old is able- due to family connections and knowing the right people with the right funding- buy a house where the renters are not.
This story is like aristocracy in a snow globe.
posted by hincandenza at 10:10 PM on March 9, 2012 [2 favorites]
If the people who are renting the house can afford $700/mo, then a 'healthy' lending market would ensure they were able to buy the house outright on a payment plan that would have them pay off the entire home in 3-4 years... with a 100% profit margin for the lender. Maybe it isn't even where they'd want to live, but if you were going to rent it for one year, and then knew that if you just stuck around two more years you'd own the place outright..
No, this doesn't really make sense, unless you know/suspect the housing market is going to turn around within that 3-4 year span. If you don't want to live there for more than a year, and you will only be able to sell if for $10,000... would YOU live somewhere you didn't want to for an extra two more years if someone paid you $5000 a year to do so? Most people who can afford a $700 a month rent probably wouldn't take that deal.
When housing prices are so low, there isn't really such a great advantage to buying over renting, since you don't end up with much of an asset at the end, so it makes sense that the costs of each wouldn't be so different.
posted by lollusc at 11:14 PM on March 9, 2012 [1 favorite]
No, this doesn't really make sense, unless you know/suspect the housing market is going to turn around within that 3-4 year span. If you don't want to live there for more than a year, and you will only be able to sell if for $10,000... would YOU live somewhere you didn't want to for an extra two more years if someone paid you $5000 a year to do so? Most people who can afford a $700 a month rent probably wouldn't take that deal.
When housing prices are so low, there isn't really such a great advantage to buying over renting, since you don't end up with much of an asset at the end, so it makes sense that the costs of each wouldn't be so different.
posted by lollusc at 11:14 PM on March 9, 2012 [1 favorite]
Frugal teen buys house with 4-H winnings. "Lindsay Binegar was 14 the first time she spent any winnings from years of showing hogs. She bought a purse. The second time, at 18, she splurged. She bought a four-bedroom, two-bathroom house with a two-car garage. And she paid in cash."
posted by Houstonian at 3:27 AM on March 10, 2012 [1 favorite]
posted by Houstonian at 3:27 AM on March 10, 2012 [1 favorite]
What are the chances that this is a capital gains tax dodge on the part of the parent who may already own a principal residence?
posted by fairmettle at 3:46 AM on March 10, 2012 [1 favorite]
posted by fairmettle at 3:46 AM on March 10, 2012 [1 favorite]
would YOU live somewhere you didn't want to for an extra two more years if someone paid you $5000 a year to do so?
Not in all circumstances. But if it gave me a home that I owned outright and could never get chucked out of, making me proof against homelessness for the rest of my life? Hell yeah. A house is a machine for living in, not for making money.
posted by howfar at 3:57 AM on March 10, 2012 [6 favorites]
Not in all circumstances. But if it gave me a home that I owned outright and could never get chucked out of, making me proof against homelessness for the rest of my life? Hell yeah. A house is a machine for living in, not for making money.
posted by howfar at 3:57 AM on March 10, 2012 [6 favorites]
And Most people aren't allowed time to take even most possessions if they do have a place for them
Doesn't the foreclosure process usually take months even after you stop making payments?
What are the chances that this is a capital gains tax dodge on the part of the parent who may already own a principal residence?
Very unlikely with a minor child who is your dependent. Anyway, the house is being rented out so it doesn't qualify for the cap gains exemption.
posted by atrazine at 5:20 AM on March 10, 2012 [2 favorites]
Doesn't the foreclosure process usually take months even after you stop making payments?
What are the chances that this is a capital gains tax dodge on the part of the parent who may already own a principal residence?
Very unlikely with a minor child who is your dependent. Anyway, the house is being rented out so it doesn't qualify for the cap gains exemption.
posted by atrazine at 5:20 AM on March 10, 2012 [2 favorites]
I wonder if the property taxes are still based on the $100,000 top-of-the-market valuation.
I don't know how it works in all jurisdictions, but valuations are relative where I live. The municipalities pass levies for how much money they need to operate, and that is split across all properties based on a percentage of the assessed value.
IE- County needs $1B to run, and there is $100B of assessed property value in the county. The tax rate becomes 1% of assessed value. If everyone's assessment goes down by 50%, the rate changes to 2% so the county can get their $1B.
posted by gjc at 6:28 AM on March 10, 2012 [2 favorites]
I don't know how it works in all jurisdictions, but valuations are relative where I live. The municipalities pass levies for how much money they need to operate, and that is split across all properties based on a percentage of the assessed value.
IE- County needs $1B to run, and there is $100B of assessed property value in the county. The tax rate becomes 1% of assessed value. If everyone's assessment goes down by 50%, the rate changes to 2% so the county can get their $1B.
posted by gjc at 6:28 AM on March 10, 2012 [2 favorites]
I don't know. That "ya gotta hustle" attitude strikes me as a bit like the sort of romanticisation of the leveraging of economic advantage that allows Rupert Murdoch to seemingly regard himself as a scrappy underdog billionaire. As for being legitimate, well, yes, possession is nine tenths of the law and all that, but taking advantage of the fact that someone has been forced to abandon their property hardly seems like the equitable approach to business.
Two different kinds of hustle, I think. Verb versus noun. Your robber baron types create situations from which they can profit. That's a hustle. Jumping on a situation (that you had no control over) where you can make some money before someone else does, or where the opportunity disappears is hustling.
As for the "taking advantage of someone forced to abandon their property", as much as foreclosure sucks for everyone involved, it isn't like it is a surprise. The cops standing there for an hour before chaining the doors is the LAST step in long process that starts with not making payments on money that you borrowed.
posted by gjc at 6:37 AM on March 10, 2012 [1 favorite]
Two different kinds of hustle, I think. Verb versus noun. Your robber baron types create situations from which they can profit. That's a hustle. Jumping on a situation (that you had no control over) where you can make some money before someone else does, or where the opportunity disappears is hustling.
As for the "taking advantage of someone forced to abandon their property", as much as foreclosure sucks for everyone involved, it isn't like it is a surprise. The cops standing there for an hour before chaining the doors is the LAST step in long process that starts with not making payments on money that you borrowed.
posted by gjc at 6:37 AM on March 10, 2012 [1 favorite]
This story is like aristocracy in a snow globe.
This sums up my discomfort with the story perfectly. Also, it's not very common to just up and move every year. If you have a job enabling you to pay rent, most of the time you will stick with it and stay put
posted by adamdschneider at 6:39 AM on March 10, 2012
This sums up my discomfort with the story perfectly. Also, it's not very common to just up and move every year. If you have a job enabling you to pay rent, most of the time you will stick with it and stay put
posted by adamdschneider at 6:39 AM on March 10, 2012
This. 14-year-old Willow didn't invent the game, but it's still a twisted one where rent is a form of slow-motion theft, so I can hate on her for being symptomatic whether she's aware or not.
Rent is not necessarily slow motion theft. It can be, but not necessarily. Do not confuse the economic principle of rent-seeking with being a landlord.
posted by gjc at 6:46 AM on March 10, 2012 [1 favorite]
Rent is not necessarily slow motion theft. It can be, but not necessarily. Do not confuse the economic principle of rent-seeking with being a landlord.
posted by gjc at 6:46 AM on March 10, 2012 [1 favorite]
I think the point is that when less than 18 months' rent would cover the entire purchase value of the property there is something deeply wrong with your housing market.
From what the article says, the house had work done to it to bring it up to standards. They could've gutted it and returned the house to a normal market value.
posted by darlingmagpie at 7:18 AM on March 10, 2012
From what the article says, the house had work done to it to bring it up to standards. They could've gutted it and returned the house to a normal market value.
posted by darlingmagpie at 7:18 AM on March 10, 2012
Look, I understand the foreclosure market, process, and impact it has on the neighborhood where foreclosures are happening. I absolutely believe that the banks and wall street investors colluded to utter, absolutely, and totally fuck a big segment of the population and economy. I am right up there in the front row of pitchforks and tar and feather carriers when it comes to the financial institutions who intentionally destroyed the economy and many American lives. I understand, and share everyone's anger where it concerns those entities.
But foreclosure itself is a long process. The constables don't show up out of nowhere, with no warning, and toss people out. Again, not defending the action of putting people out on the street; but homeowners have at least 6 months between not paying their mortgage and the constables showing up with an eviction notice. It is easier for your Home Owner's Association to take your house away than it is for the lenders. Again, not defending the lenders; but a homeowner facing eviction is sent (and SERVED) papers for months and months before an eviction occurs.
All of which is a long-ass way of saying; this kid isn't some vulture sitting outside the window of the indigent, calculating the pennies she can make by selling their roomstore couch to someone willing to buy a used roomstore couch.
I agree that many evictions since 2008 can probably be traced to bank misconduct. But many cannot. There were evictions before the bank crisis, there will be evictions once the economy finds the next Tulip Bubble.
In my limited experience, most of the stuff left in a house, apartment, spare room, whatever when someone moves out is the "aw fuck it" stuff. Stuff you hate, stuff that isn't worth moving, stuff you're gonna replace, stuff you think somebody else might want, but that you just can't be bothered with. When I was helping a friend who owned a few rent houses, I cannot tell you the number of phone calls I made where I've said "Hey, you left X, come get it." and the response is "Meh, give it to charity.", without realizing or caring what a pain in the ass it is for me to just "give it to charity".
Assigning malice to this girl is ridiculous. If there had been a kid doing this in my area when I was dealing with property, I would have given her everything the tenants left, as long as she'd come clean it out. Again, I suggest that those of you who are being so negative about this girl are letting your feelings about the Financial MarketplaceTM get in the way of seeing the actual story about how a kid did something cool. Yay, kid!
posted by dejah420 at 8:26 AM on March 10, 2012 [3 favorites]
But foreclosure itself is a long process. The constables don't show up out of nowhere, with no warning, and toss people out. Again, not defending the action of putting people out on the street; but homeowners have at least 6 months between not paying their mortgage and the constables showing up with an eviction notice. It is easier for your Home Owner's Association to take your house away than it is for the lenders. Again, not defending the lenders; but a homeowner facing eviction is sent (and SERVED) papers for months and months before an eviction occurs.
All of which is a long-ass way of saying; this kid isn't some vulture sitting outside the window of the indigent, calculating the pennies she can make by selling their roomstore couch to someone willing to buy a used roomstore couch.
I agree that many evictions since 2008 can probably be traced to bank misconduct. But many cannot. There were evictions before the bank crisis, there will be evictions once the economy finds the next Tulip Bubble.
In my limited experience, most of the stuff left in a house, apartment, spare room, whatever when someone moves out is the "aw fuck it" stuff. Stuff you hate, stuff that isn't worth moving, stuff you're gonna replace, stuff you think somebody else might want, but that you just can't be bothered with. When I was helping a friend who owned a few rent houses, I cannot tell you the number of phone calls I made where I've said "Hey, you left X, come get it." and the response is "Meh, give it to charity.", without realizing or caring what a pain in the ass it is for me to just "give it to charity".
Assigning malice to this girl is ridiculous. If there had been a kid doing this in my area when I was dealing with property, I would have given her everything the tenants left, as long as she'd come clean it out. Again, I suggest that those of you who are being so negative about this girl are letting your feelings about the Financial MarketplaceTM get in the way of seeing the actual story about how a kid did something cool. Yay, kid!
posted by dejah420 at 8:26 AM on March 10, 2012 [3 favorites]
Like I said, it comes down to different world-views, and putting a child in the middle of that is pretty unfair and ridiculous. So yes, everyone who is saying "don't attack the kid" is completely correct. But equally, why praise her? She did something self-interested and got a reward for it. Great for her, and legal, legitimate and wholly normal. But I think many people, including myself, don't tend to see helping yourself as being a praiseworthy thing (although not helping yourself can certainly be blameworthy).
Losing one's home is one of the greatest horrors visited upon people in peaceful societies. I volunteer at Shelter. Among other things, we provide advice and representation to people who are at risk of, or in the process of, losing their homes. I've seen enough of the process to know that it happens to all kinds of people, and for all kinds of reasons, but I've never yet seen it be anything less than horrible. I tend toward thinking that if something good comes out of that process, it should be a good to society, not a well placed individual. I just can't help but wish I could be applauding a person using their verve and determination to take an opportunity to give, rather than take.
I don't want to come across as a holier-than-thou arse. I do plenty of self-interested things, and I find it profoundly unlikely that this child is any more a selfish vulture than myself. Just not a story that makes me happy, is all. The underlying sadness of the situation that brought about the opportunity outweighs my appreciation of the child's skill and determination.
posted by howfar at 9:03 AM on March 10, 2012 [1 favorite]
Losing one's home is one of the greatest horrors visited upon people in peaceful societies. I volunteer at Shelter. Among other things, we provide advice and representation to people who are at risk of, or in the process of, losing their homes. I've seen enough of the process to know that it happens to all kinds of people, and for all kinds of reasons, but I've never yet seen it be anything less than horrible. I tend toward thinking that if something good comes out of that process, it should be a good to society, not a well placed individual. I just can't help but wish I could be applauding a person using their verve and determination to take an opportunity to give, rather than take.
I don't want to come across as a holier-than-thou arse. I do plenty of self-interested things, and I find it profoundly unlikely that this child is any more a selfish vulture than myself. Just not a story that makes me happy, is all. The underlying sadness of the situation that brought about the opportunity outweighs my appreciation of the child's skill and determination.
posted by howfar at 9:03 AM on March 10, 2012 [1 favorite]
You, too, can go to a bad area of your town and buy a house for low 5-figures, fix it up, and turn a profit on the rent. It's brainless easy. I don't know why more people don't do it.
Actually, I do know - it involves two things that most people (Americans?) are increasingly uncomfortable with:
1. Hard work.
2. Risk.
posted by lohmannn at 9:40 AM on March 10, 2012
Actually, I do know - it involves two things that most people (Americans?) are increasingly uncomfortable with:
1. Hard work.
2. Risk.
posted by lohmannn at 9:40 AM on March 10, 2012
Actually, I do know - it involves two things that most people (Americans?) are increasingly uncomfortable with:
1. Hard work.
2. Risk.
3. Tenants.
What looks like a sweet deal on paper, often turns into a regrettable nightmare when you have to deal with the human part of the equation. The hassle of dealing the tenants makes any profit not worth it.
A friend of mine had tenants that just refused to pay their rent. They were always late and came correct with just enough cash just before he could evict them. The house was in a high crime area and they complained and complained that they wanted a steel door. Finally, my friend gives in. Some workman show up, remove the old door, take a break for lunch and don't come back. (Spolier: they weren't supposed to.)
After 24 hours, they call the cops. My friend says "Gee officer, I had no idea the workman didn't finish the job. I'll get right on it."
"But they said they tried to call you."
"Well they never answer my calls, so I never answer theirs."
They stiffed him for the rent and moved out. He was glad to be rid of them and he sold the house for a loss just to get rid of it.
posted by three blind mice at 10:09 AM on March 10, 2012 [1 favorite]
1. Hard work.
2. Risk.
3. Tenants.
What looks like a sweet deal on paper, often turns into a regrettable nightmare when you have to deal with the human part of the equation. The hassle of dealing the tenants makes any profit not worth it.
A friend of mine had tenants that just refused to pay their rent. They were always late and came correct with just enough cash just before he could evict them. The house was in a high crime area and they complained and complained that they wanted a steel door. Finally, my friend gives in. Some workman show up, remove the old door, take a break for lunch and don't come back. (Spolier: they weren't supposed to.)
After 24 hours, they call the cops. My friend says "Gee officer, I had no idea the workman didn't finish the job. I'll get right on it."
"But they said they tried to call you."
"Well they never answer my calls, so I never answer theirs."
They stiffed him for the rent and moved out. He was glad to be rid of them and he sold the house for a loss just to get rid of it.
posted by three blind mice at 10:09 AM on March 10, 2012 [1 favorite]
Everything metal ripped out and sold for scrap, food left rotting, dogs allowed to shit and piss everywhere, sewage lines plugged up with concrete, leading to 6 inches of raw sewage stewing in the basement.
Or as TBM says, 3. Tenants.
posted by dirigibleman at 11:52 AM on March 10, 2012
Or as TBM says, 3. Tenants.
posted by dirigibleman at 11:52 AM on March 10, 2012
Wow. In my neck of the woods, the housing market has gone insane in the completely opposite direction.
posted by emeiji at 12:29 PM on March 10, 2012
posted by emeiji at 12:29 PM on March 10, 2012
Wow indeed.
In this case the successful bidder is a university student originally from China with family money behind her, says Mr. Adelson. She assured the agents there would be no problem in closing the deal.
As has been discussed in relation to some other markets, outside money can do some very strange things to local prices.
posted by Forktine at 1:05 PM on March 10, 2012
In this case the successful bidder is a university student originally from China with family money behind her, says Mr. Adelson. She assured the agents there would be no problem in closing the deal.
As has been discussed in relation to some other markets, outside money can do some very strange things to local prices.
posted by Forktine at 1:05 PM on March 10, 2012
yea $700/mo will barely get you a miserable hovel studio in student hell here in Boulder. Plus I'm betting the rentals market is at a premium in heavily foreclosed areas.
Boulder is a crazy local market that has essentially banned new construction. 700 / mo fetches a very nice 2 bedroom apartment in Manhattan KS, and I'm getting ready to move into a 2 br in Corvallis for 800/mo. Doing the math on my parent's home in KC, an interest only loan plus insurance plus property tax works out to around 550 for a nice 3 bedroom 2.5 bath home. This home is valued between 100k and 150k though, so something is really screwy about that foreclosed home.
tl;dr -- markets are regional.
posted by pwnguin at 1:22 PM on March 10, 2012
Boulder is a crazy local market that has essentially banned new construction. 700 / mo fetches a very nice 2 bedroom apartment in Manhattan KS, and I'm getting ready to move into a 2 br in Corvallis for 800/mo. Doing the math on my parent's home in KC, an interest only loan plus insurance plus property tax works out to around 550 for a nice 3 bedroom 2.5 bath home. This home is valued between 100k and 150k though, so something is really screwy about that foreclosed home.
tl;dr -- markets are regional.
posted by pwnguin at 1:22 PM on March 10, 2012
But if it gave me a home that I owned outright and could never get chucked out of, making me proof against homelessness for the rest of my life? Hell yeah.
Well, sure, until the taxes go up to the point you can't afford 'em, or the furnace quits, or the roof starts leaking, or the air conditioner (in Florida) craps out.
People seem to have this fantasy that once they pay off the mortgage they won't ever have to pay a dime for shelter.
That's just not true.
I had my palatial country estate fully paid off, but the taxes alone were $450 a month. Add $200 a month commuting expenses, $100 a month for utilities PLUS the continual maintenance expenses, and my sweet deluxe penthouse apartment on a busline with heat included costs me less than what my fully paid off house did.
I love it when people tell me I'm "throwing my money away on rent."
posted by Floydd at 4:39 PM on March 10, 2012 [2 favorites]
Well, sure, until the taxes go up to the point you can't afford 'em, or the furnace quits, or the roof starts leaking, or the air conditioner (in Florida) craps out.
People seem to have this fantasy that once they pay off the mortgage they won't ever have to pay a dime for shelter.
That's just not true.
I had my palatial country estate fully paid off, but the taxes alone were $450 a month. Add $200 a month commuting expenses, $100 a month for utilities PLUS the continual maintenance expenses, and my sweet deluxe penthouse apartment on a busline with heat included costs me less than what my fully paid off house did.
I love it when people tell me I'm "throwing my money away on rent."
posted by Floydd at 4:39 PM on March 10, 2012 [2 favorites]
But if it gave me a home that I owned outright and could never get chucked out of, making me proof against homelessness for the rest of my life?
What Floydd said.
Also, again this only makes sense if you assume the market will turn around. Otherwise, save your $10k in the bank and use it to buy a different home (where you actually want to live) whenever you like. This too, is proof against homelessness for the rest of your life. (Or until the market recovers).
posted by lollusc at 7:37 PM on March 10, 2012
What Floydd said.
Also, again this only makes sense if you assume the market will turn around. Otherwise, save your $10k in the bank and use it to buy a different home (where you actually want to live) whenever you like. This too, is proof against homelessness for the rest of your life. (Or until the market recovers).
posted by lollusc at 7:37 PM on March 10, 2012
People seem to have this fantasy that once they pay off the mortgage they won't ever have to pay a dime for shelter.
That's just not true.
You amaze me. What are these taxes and bills you speak of?
my palatial country estate...my sweet deluxe penthouse apartment
I'd like to hear more about these properties, they sound lovely.
I love it when people tell me I'm "throwing my money away on rent."
Somewhere in the bragging you're making a perfectly reasonable point. Of course owning mortgage-free property isn't the end of one's money worries, and it is true that there are often hidden costs to property ownership. No-one should buy property unless they have a sound reason for doing so.
Also, again this only makes sense if you assume the market will turn around.
The fact that less that 18 months' rent will buy this property outright indicates that either rents are massively inflated, or housing prices seriously depressed. You must think Willow is either really evil or stupid, I guess. Maybe both.
posted by howfar at 7:49 PM on March 10, 2012
That's just not true.
You amaze me. What are these taxes and bills you speak of?
my palatial country estate...my sweet deluxe penthouse apartment
I'd like to hear more about these properties, they sound lovely.
I love it when people tell me I'm "throwing my money away on rent."
Somewhere in the bragging you're making a perfectly reasonable point. Of course owning mortgage-free property isn't the end of one's money worries, and it is true that there are often hidden costs to property ownership. No-one should buy property unless they have a sound reason for doing so.
Also, again this only makes sense if you assume the market will turn around.
The fact that less that 18 months' rent will buy this property outright indicates that either rents are massively inflated, or housing prices seriously depressed. You must think Willow is either really evil or stupid, I guess. Maybe both.
posted by howfar at 7:49 PM on March 10, 2012
Even though the title is misleading, it is still very much inspirational.
posted by jseon at 10:10 PM on March 10, 2012
posted by jseon at 10:10 PM on March 10, 2012
No, I don't think Willow is either evil or stupid. I think she's smart. But other people were suggesting that her tenants must be stupid if they are paying that much rent when they could just buy, and I'm trying to suggest that they may not, in fact, be stupid.
And I don't think anyone is arguing that housing prices are not seriously depressed. But you can't assume they are necessarily going to recover either. No one knows what the housing market is going to do. That's kind of exactly what the market collapse has taught us.
posted by lollusc at 10:13 PM on March 10, 2012
And I don't think anyone is arguing that housing prices are not seriously depressed. But you can't assume they are necessarily going to recover either. No one knows what the housing market is going to do. That's kind of exactly what the market collapse has taught us.
posted by lollusc at 10:13 PM on March 10, 2012
And the original point I was responding to was that someone was suggesting it would make sense for tenants to live somewhere they didn't really want to live, for longer than they wanted to live there, JUST to own the home (an asset of $10,000) instead of renting it. This does not apply to Willow. She is not having to move house, or remain in a location she doesn't want to be, and it sounds like she didn't have to get a mortgage, and her rental income will be covering her taxes and so on, so she absolutely made a smart choice. We don't know that any of those factors would be the same for her tenants, if they chose to buy instead of paying rent.
posted by lollusc at 10:15 PM on March 10, 2012
posted by lollusc at 10:15 PM on March 10, 2012
The house cost $12k plus all the repair and rehabilitation costs; fixing up just the kitchen alone could easily cost another $12k, if it was in really bad shape. On top of that, it's not easy, or even necessarily possible, to get a regular mortgage for a property that is in terrible condition. You need to have cash, or the ability to get a loan against another asset -- resources that the tenants may well not have.
And that's just to buy the place; the money for the remodeling will also need to come from somewhere, possibly a construction loan but more likely also from savings or a loan against another asset.
posted by Forktine at 10:29 PM on March 10, 2012
And that's just to buy the place; the money for the remodeling will also need to come from somewhere, possibly a construction loan but more likely also from savings or a loan against another asset.
posted by Forktine at 10:29 PM on March 10, 2012
People seem to have this fantasy that once they pay off the mortgage they won't ever have to pay a dime for shelter.
That's just not true.
You amaze me. What are these taxes and bills you speak of?
I am amazing, aren't I?
I don't know how they do it in Wales, howfar, but here in the United States we pay taxes on the real property that we own, they're called, oddly enough, "Property Taxes," and they're sure as death. Your claim that home ownership is "...proof against homelessness" failed to take those ongoing costs into consideration, so I shared a little anecdote about my particular living situation so that you might re-think your assertion that, in the United States, once you owned your home outright you could never get "chucked out of it."
Clearer now?
posted by Floydd at 11:57 AM on March 11, 2012
That's just not true.
You amaze me. What are these taxes and bills you speak of?
I am amazing, aren't I?
I don't know how they do it in Wales, howfar, but here in the United States we pay taxes on the real property that we own, they're called, oddly enough, "Property Taxes," and they're sure as death. Your claim that home ownership is "...proof against homelessness" failed to take those ongoing costs into consideration, so I shared a little anecdote about my particular living situation so that you might re-think your assertion that, in the United States, once you owned your home outright you could never get "chucked out of it."
Clearer now?
posted by Floydd at 11:57 AM on March 11, 2012
Are you doing it?
Yes. I have 4 investment rental properties, owned and "landlorded" by myself and 1 business partner. It's not that hard.
posted by lohmannn at 1:17 PM on March 11, 2012
Yes. I have 4 investment rental properties, owned and "landlorded" by myself and 1 business partner. It's not that hard.
posted by lohmannn at 1:17 PM on March 11, 2012
Also, for all those that claim owning your own home is so great and superior - take a look at an 30-year amortization table, for kicks.
Spoiler: 5 years in (when most people move), and you've only paid down 6% of the principal, despite being 17% of the way through the loan. Who's throwing money down the drain, again?
posted by lohmannn at 1:21 PM on March 11, 2012
Spoiler: 5 years in (when most people move), and you've only paid down 6% of the principal, despite being 17% of the way through the loan. Who's throwing money down the drain, again?
posted by lohmannn at 1:21 PM on March 11, 2012
take a look at an 30-year amortization table, for kicks
Well, you can do it that way but the smart money gets a 30 year mortgage for an amount that can be paid off much faster by overpaying against the principal. I've owned my house free and clear since roughly 2002, having bought it in 1992. (The casino industry helped with a lot of those overpayments. Thanks for the promos and blackjack games, guys.)
Thanks to Katrina I now pay property taxes. (Louisiana fully exempts 100% of your home's value below $70K, but my bought-for-$56K house is now appraised at $130K. Sheesh. And realistically I couldn't sell it for much over $90K.) And of course it's a 30 year old house so it has the usual maintenance issues. Still, I pay a LOT less than I would to rent this place (neighbors are paying $1400+ per month, my mortgage was only $485.) I've lived here for 20 years but my total investment in the property wouldn't have paid the last 10 years rent on it.
It's not "proof against homelessness." I pay a good fraction of what I once did in mortgage on homeowner's insurance, because if Katrina had hit just a little further to the west I'd be the proud owner of a concrete slab. The state is refusing to allow sanity to guide property tax appraisals now that the Katrina bubble has passed, but I still pay a lot less of those than I would for a similar property almost anywhere else, and it's still a fairly safe, clean, upscale area. I need to do some landscaping and there's a lot of stuff I just put up with that I'd have to fix if I wanted to actually sell the place, like the torn up linoleum in the laundry room from the dancing washing machine I finally recently replaced and the carpet in my office that I'd have to empty out my office to replace, and that ain't happening. Eventually I'll need to look into better windows and insulation.
But probably the best reason for owning the house is that I can fuck with it. I can put semi-permanent structures in the yard, I can knock out walls or add a room or redo the floors. I can paint it whatever color I want. I can line the walls with shelving or take out the dead dishwasher and replace it with a cabinet. If I was suitably motivated I could put solar panels on the roof or put in a whole-house backup generator. I can upgrade the windows or insulation and I own the result. It's MINE. That happens to be worth a lot to me.
posted by localroger at 3:10 PM on March 11, 2012 [3 favorites]
Well, you can do it that way but the smart money gets a 30 year mortgage for an amount that can be paid off much faster by overpaying against the principal. I've owned my house free and clear since roughly 2002, having bought it in 1992. (The casino industry helped with a lot of those overpayments. Thanks for the promos and blackjack games, guys.)
Thanks to Katrina I now pay property taxes. (Louisiana fully exempts 100% of your home's value below $70K, but my bought-for-$56K house is now appraised at $130K. Sheesh. And realistically I couldn't sell it for much over $90K.) And of course it's a 30 year old house so it has the usual maintenance issues. Still, I pay a LOT less than I would to rent this place (neighbors are paying $1400+ per month, my mortgage was only $485.) I've lived here for 20 years but my total investment in the property wouldn't have paid the last 10 years rent on it.
It's not "proof against homelessness." I pay a good fraction of what I once did in mortgage on homeowner's insurance, because if Katrina had hit just a little further to the west I'd be the proud owner of a concrete slab. The state is refusing to allow sanity to guide property tax appraisals now that the Katrina bubble has passed, but I still pay a lot less of those than I would for a similar property almost anywhere else, and it's still a fairly safe, clean, upscale area. I need to do some landscaping and there's a lot of stuff I just put up with that I'd have to fix if I wanted to actually sell the place, like the torn up linoleum in the laundry room from the dancing washing machine I finally recently replaced and the carpet in my office that I'd have to empty out my office to replace, and that ain't happening. Eventually I'll need to look into better windows and insulation.
But probably the best reason for owning the house is that I can fuck with it. I can put semi-permanent structures in the yard, I can knock out walls or add a room or redo the floors. I can paint it whatever color I want. I can line the walls with shelving or take out the dead dishwasher and replace it with a cabinet. If I was suitably motivated I could put solar panels on the roof or put in a whole-house backup generator. I can upgrade the windows or insulation and I own the result. It's MINE. That happens to be worth a lot to me.
posted by localroger at 3:10 PM on March 11, 2012 [3 favorites]
Still, I pay a LOT less than I would to rent this place (neighbors are paying $1400+ per month, my mortgage was only $485.)
A real estate agent once told me that the three most important things to consider when buying real estate are: location, location,... and one other thing that escapes me right now.
YMMV.
posted by Floydd at 8:34 PM on March 11, 2012
A real estate agent once told me that the three most important things to consider when buying real estate are: location, location,... and one other thing that escapes me right now.
YMMV.
posted by Floydd at 8:34 PM on March 11, 2012
location, location,... and one other thing
I'm in the same location as the neighbors who are paying $1400+ to rent. The fact that it's one of the locations that didn't get flooded by Katrina has made the market crazy though.
posted by localroger at 5:30 AM on March 12, 2012
I'm in the same location as the neighbors who are paying $1400+ to rent. The fact that it's one of the locations that didn't get flooded by Katrina has made the market crazy though.
posted by localroger at 5:30 AM on March 12, 2012
I had my palatial country estate fully paid off, but the taxes alone were $450 a month. Add $200 a month commuting expenses, $100 a month for utilities PLUS the continual maintenance expenses, and my sweet deluxe penthouse apartment on a busline with heat included costs me less than what my fully paid off house did.
I love it when people tell me I'm "throwing my money away on rent."
Okay, Floyd, let's take a closer look. Property taxes at $450 a month. Wow. Using 2011 Wisconsin rates, your "palatial country estate " was valued at ~$320,000. Okay. $450/month versus what? What is your rent now?
Next, $200 a month commuting expenses--but that's not really the expense of owning a house, is it, but of choosing to own one far away from where you work. We live about 5 miles from where my spouse works. But okay, maybe the only houses are out there in "the country". So, does the $200 come from opting not to use the train, bus, Park and Ride or carshare options available (even in rural areas) and drive yourself? Well, let's give you the benefit of the doubt and say $200 is the /lowest you could go. The lowest bus pass in Racine, Wisconsin, is $55 a month. You are saving there, for sure! $145 less with the penthouse.
$100 a month utilities with your house. Okay, so your penthouse has heat included. What about other utilities, like water and garbage pickup, etc? You still have to pay for those. Let's say you pay only a quarter of what you used to, that's $25. I'll bet it is more, but that's $75 less. Now we are at $220 a month less.
Continued maintenance expenses on the house is a bit sketchy, though. Don't you pay association fees on that penthouse? Same thing. And you can't make any permanent changes, including improvements, with your rental. With the house you owned, if you upgraded to more efficient heating and appliances or better insulation, for example you might be able to get rebates from the givernment or the utilities provider, write off the expenses as tax deductions under home improvement costs, AND end up saving on that monthly utilities bills. So we are not really comparing apples to apples there. I imagine that's why you didn't include a dollar amount for that maintenance.
Still, it looks like, with your figures, unless your rent is $220 a month more than the $450 you were paying for those property taxes, you ARE saving money each month! Good for you!
Provided the penthouse is also valued at ~$320,000, and has the exact same square footage, and is on the same amount of acreage as that "palatial county estate", laugh away!
Otherwise, of COURSE you are paying less, because you have settled for less. Less space. Less land. Less independence (you can't make any changes in your penthouse, you can't just drive anywhere the bus routes don't, you probably either can't have a pet or are limited to those the landlord says are okay to own provided you pay extra for the privilege).
You also have no equity now, so if you decide you want to size up because you're planning on starting a family, you can't apply those monthly payments you've already made to a bigger place--that rent is just gone; it doesn't pay forward. And if you decide you want even less space than that deluxe penthouse, your landlord isn't going to give you any money back so you can go do that. The reason you could afford this nifty deluxe penthouse is BECAUSE you did just that--applied the money you got back from selling the palatial country estate to your new "sweet" living arrangement.
Look, if you want to rent, rent. But don't make specious, simplistic comparisons to argue that renting and owning are the same, because they aren't.
posted by misha at 9:52 AM on March 15, 2012
misha: "
Provided the penthouse is also valued at ~$320,000, and has the exact same square footage, and is on the same amount of acreage as that "palatial county estate", laugh away!"
You're also forgetting the opportunity cost of not investing that 320k elsewhere. If you invest 320k elsewhere at 5 percent, you'd have something like 1300 a month in income. I bet that can get you a nice bump in size while covering those association fees.
Realistically, it's difficult to control all the variables to where you're truly comparing apples to apples, but fortunately, you don't have to. You just have to decide whether the extra cost of A over B is worth the luxuries A affords you that B cannot.
posted by pwnguin at 11:53 AM on March 15, 2012 [1 favorite]
Provided the penthouse is also valued at ~$320,000, and has the exact same square footage, and is on the same amount of acreage as that "palatial county estate", laugh away!"
You're also forgetting the opportunity cost of not investing that 320k elsewhere. If you invest 320k elsewhere at 5 percent, you'd have something like 1300 a month in income. I bet that can get you a nice bump in size while covering those association fees.
Realistically, it's difficult to control all the variables to where you're truly comparing apples to apples, but fortunately, you don't have to. You just have to decide whether the extra cost of A over B is worth the luxuries A affords you that B cannot.
posted by pwnguin at 11:53 AM on March 15, 2012 [1 favorite]
You also have no equity now, so if you decide you want to size up because you're planning on starting a family, you can't apply those monthly payments you've already made to a bigger place
pwnguin nailed it; you got tripped up by a false dichotomy here.
posted by lohmannn at 5:27 PM on March 16, 2012
pwnguin nailed it; you got tripped up by a false dichotomy here.
posted by lohmannn at 5:27 PM on March 16, 2012
of COURSE you are paying less, because you have settled for less.
Look, if you want to own, own. But don't make specious, simplistic comparisons to argue that renting is inherently worse, because it isn't.
posted by lohmannn at 5:29 PM on March 16, 2012
Look, if you want to own, own. But don't make specious, simplistic comparisons to argue that renting is inherently worse, because it isn't.
posted by lohmannn at 5:29 PM on March 16, 2012
If you invest 320k elsewhere at 5 percent, you'd have something like 1300 a month in income. I bet that can get you a nice bump in size while covering those association fees.
If you can find an investment with a guaranteed 5% return, that would change the equation, for sure.
But Floyd didn't mention he had any investment capital at all, when he catalogued his expenses. And we still don't know how much of the previous housing cost is going toward paying the rent on that sweet new penthouse. So I'm still looking at apples and more apples.
lohmannn: Look, if you want to own, own. But don't make specious, simplistic comparisons to argue that renting is inherently worse, because it isn't.
If you want to turn my argument back on me as a counter-argument, that *could* be an effective debating tactic, provided you have some support to back it up.
I don't see any specious or simplistic comparisons (for example, renting a penthouse is just the same as owning a palatial country estate! only cheaper!) that I've made in my example, though.
Care to elaborate?
posted by misha at 2:06 PM on March 18, 2012
If you can find an investment with a guaranteed 5% return, that would change the equation, for sure.
But Floyd didn't mention he had any investment capital at all, when he catalogued his expenses. And we still don't know how much of the previous housing cost is going toward paying the rent on that sweet new penthouse. So I'm still looking at apples and more apples.
lohmannn: Look, if you want to own, own. But don't make specious, simplistic comparisons to argue that renting is inherently worse, because it isn't.
If you want to turn my argument back on me as a counter-argument, that *could* be an effective debating tactic, provided you have some support to back it up.
I don't see any specious or simplistic comparisons (for example, renting a penthouse is just the same as owning a palatial country estate! only cheaper!) that I've made in my example, though.
Care to elaborate?
posted by misha at 2:06 PM on March 18, 2012
misha: "If you can find an investment with a guaranteed 5% return, that would change the equation, for sure. "
Well, historical stock market returns are more like 10 percent, so 5 percent is fairly conservative. We could also factor in inflation adjustments, but that wouldn't really help your cause.
misha: "But Floyd didn't mention he had any investment capital at all, when he catalogued his expenses.And we still don't know how much of the previous housing cost is going toward paying the rent on that sweet new penthouse. So I'm still looking at apples and more apples."
I think it was pretty clear he owned the house. You can buy it with money, and you can sell it for money. Sounds like all the hallmarks of investment capital to me. I hear you can even exclude capital gains on it! And anyways, I just gave you a way to put "previous housing cost"* into context based on your estimate.
I really don't get why you, or anyone really, is so fighty about this. It's not like you're the spokesperson for the National Association of Realtors. In some places and forms it can be cheaper to rent and invest the difference. Where you claim someone is renting less, I could easily claim you're buying more. The deluxe calculator here is pretty handy. Using the 320k figure as a 100 down payment, rent would have to be above 1100 before buying is better @ 4.5 percent investment return.
*Technically if it's a cost you don't get it back. You might want to look at OER. Presumably you're referring to home equity.
posted by pwnguin at 7:25 PM on March 18, 2012
Well, historical stock market returns are more like 10 percent, so 5 percent is fairly conservative. We could also factor in inflation adjustments, but that wouldn't really help your cause.
misha: "But Floyd didn't mention he had any investment capital at all, when he catalogued his expenses.And we still don't know how much of the previous housing cost is going toward paying the rent on that sweet new penthouse. So I'm still looking at apples and more apples."
I think it was pretty clear he owned the house. You can buy it with money, and you can sell it for money. Sounds like all the hallmarks of investment capital to me. I hear you can even exclude capital gains on it! And anyways, I just gave you a way to put "previous housing cost"* into context based on your estimate.
I really don't get why you, or anyone really, is so fighty about this. It's not like you're the spokesperson for the National Association of Realtors. In some places and forms it can be cheaper to rent and invest the difference. Where you claim someone is renting less, I could easily claim you're buying more. The deluxe calculator here is pretty handy. Using the 320k figure as a 100 down payment, rent would have to be above 1100 before buying is better @ 4.5 percent investment return.
*Technically if it's a cost you don't get it back. You might want to look at OER. Presumably you're referring to home equity.
posted by pwnguin at 7:25 PM on March 18, 2012
Okay, Floyd, let's take a closer look. Property taxes at $450 a month. Wow. Using 2011 Wisconsin rates, your "palatial country estate " was valued at ~$320,000. Okay. $450/month versus what? What is your rent now?
That's pretty close. It was paid off after living there for 20+ years, so I owed nothing on it when I sold it.
Next, $200 a month commuting expenses--but that's not really the expense of owning a house, is it, but of choosing to own one far away from where you work.
Well, that was the expense of owning THAT house, since it's 30 miles from where I work.
We live about 5 miles from where my spouse works. But okay, maybe the only houses are out there in "the country". So, does the $200 come from opting not to use the train, bus, Park and Ride or carshare options available (even in rural areas) and drive yourself?
Again, I'm talking about a particular house, remember? The one I lived in. And no, there were no trains or busses or even practical Park and Ride options available.
Well, let's give you the benefit of the doubt and say $200 is the /lowest you could go. The lowest bus pass in Racine, Wisconsin, is $55 a month. You are saving there, for sure! $145 less with the penthouse.
My bus pass is included with my compensation package at work. I get it even if I don't use it, so, to me it's as good as free. Oh, and I no longer own a car, so there's that savings to consider.
$100 a month utilities with your house. Okay, so your penthouse has heat included. What about other utilities, like water and garbage pickup, etc? You still have to pay for those.
Nope, everything's included in my rent.
Continued maintenance expenses on the house is a bit sketchy, though. Don't you pay association fees on that penthouse?
Nope, any fees are included in my rent.
And you can't make any permanent changes, including improvements, with your rental. With the house you owned, if you upgraded to more efficient heating and appliances or better insulation, for example you might be able to get rebates from the givernment or the utilities provider, write off the expenses as tax deductions under home improvement costs, AND end up saving on that monthly utilities bills.
That's true I cannot make any permanent changes, but if I want something different I can easily move.
Otherwise, of COURSE you are paying less, because you have settled for less. Less space. Less land. Less independence (you can't make any changes in your penthouse, you can't just drive anywhere the bus routes don't, you probably either can't have a pet or are limited to those the landlord says are okay to own provided you pay extra for the privilege).
The space is the same, I have a park across the street which is larger than my acreage, I can take a taxi if I need to be somewhere in a hurry, rent a car when I need to, and pets really aren't an issue. I can't raise pigs, and I do love pork, but I know some farmers.
You also have no equity now, so if you decide you want to size up because you're planning on starting a family, you can't apply those monthly payments you've already made to a bigger place--that rent is just gone; it doesn't pay forward. And if you decide you want even less space than that deluxe penthouse, your landlord isn't going to give you any money back so you can go do that. The reason you could afford this nifty deluxe penthouse is BECAUSE you did just that--applied the money you got back from selling the palatial country estate to your new "sweet" living arrangement.
Oh, I have equity. Remember that palatial country estate? I sold it. For cash money.
The property taxes I was paying on my house? Just gone. The maintenance expenses for that house? Just gone. And now I make money on the equity I had tied up in that house. Should I decide to start a family (unlikely, given my age) I could easily buy a house if I wanted.
Look, if you want to rent, rent. But don't make specious, simplistic comparisons to argue that renting and owning are the same, because they aren't.
I don't recall making any arguments that renting and owning are the same, you seem to be having this little discussion with the voices in your head.
I did attempt to point out that people often don't take all the costs of home ownership into consideration. Upthread howfar stated that owning a home outright was proof against homelessness, I responded to that statement. Your mileage, of course, may vary.
Pwnguin has articulated the financial aspects, but I find it surprising that people are so emotionally attached to the concept of home ownership that they get angry when those beliefs are questioned.
posted by Floydd at 6:54 AM on March 19, 2012
That's pretty close. It was paid off after living there for 20+ years, so I owed nothing on it when I sold it.
Next, $200 a month commuting expenses--but that's not really the expense of owning a house, is it, but of choosing to own one far away from where you work.
Well, that was the expense of owning THAT house, since it's 30 miles from where I work.
We live about 5 miles from where my spouse works. But okay, maybe the only houses are out there in "the country". So, does the $200 come from opting not to use the train, bus, Park and Ride or carshare options available (even in rural areas) and drive yourself?
Again, I'm talking about a particular house, remember? The one I lived in. And no, there were no trains or busses or even practical Park and Ride options available.
Well, let's give you the benefit of the doubt and say $200 is the /lowest you could go. The lowest bus pass in Racine, Wisconsin, is $55 a month. You are saving there, for sure! $145 less with the penthouse.
My bus pass is included with my compensation package at work. I get it even if I don't use it, so, to me it's as good as free. Oh, and I no longer own a car, so there's that savings to consider.
$100 a month utilities with your house. Okay, so your penthouse has heat included. What about other utilities, like water and garbage pickup, etc? You still have to pay for those.
Nope, everything's included in my rent.
Continued maintenance expenses on the house is a bit sketchy, though. Don't you pay association fees on that penthouse?
Nope, any fees are included in my rent.
And you can't make any permanent changes, including improvements, with your rental. With the house you owned, if you upgraded to more efficient heating and appliances or better insulation, for example you might be able to get rebates from the givernment or the utilities provider, write off the expenses as tax deductions under home improvement costs, AND end up saving on that monthly utilities bills.
That's true I cannot make any permanent changes, but if I want something different I can easily move.
Otherwise, of COURSE you are paying less, because you have settled for less. Less space. Less land. Less independence (you can't make any changes in your penthouse, you can't just drive anywhere the bus routes don't, you probably either can't have a pet or are limited to those the landlord says are okay to own provided you pay extra for the privilege).
The space is the same, I have a park across the street which is larger than my acreage, I can take a taxi if I need to be somewhere in a hurry, rent a car when I need to, and pets really aren't an issue. I can't raise pigs, and I do love pork, but I know some farmers.
You also have no equity now, so if you decide you want to size up because you're planning on starting a family, you can't apply those monthly payments you've already made to a bigger place--that rent is just gone; it doesn't pay forward. And if you decide you want even less space than that deluxe penthouse, your landlord isn't going to give you any money back so you can go do that. The reason you could afford this nifty deluxe penthouse is BECAUSE you did just that--applied the money you got back from selling the palatial country estate to your new "sweet" living arrangement.
Oh, I have equity. Remember that palatial country estate? I sold it. For cash money.
The property taxes I was paying on my house? Just gone. The maintenance expenses for that house? Just gone. And now I make money on the equity I had tied up in that house. Should I decide to start a family (unlikely, given my age) I could easily buy a house if I wanted.
Look, if you want to rent, rent. But don't make specious, simplistic comparisons to argue that renting and owning are the same, because they aren't.
I don't recall making any arguments that renting and owning are the same, you seem to be having this little discussion with the voices in your head.
I did attempt to point out that people often don't take all the costs of home ownership into consideration. Upthread howfar stated that owning a home outright was proof against homelessness, I responded to that statement. Your mileage, of course, may vary.
Pwnguin has articulated the financial aspects, but I find it surprising that people are so emotionally attached to the concept of home ownership that they get angry when those beliefs are questioned.
posted by Floydd at 6:54 AM on March 19, 2012
Floydd, thanks for spelling that out and giving a much clearer picture.
I felt like I was repying in kind to your "laughing" at people who say you are throwing away your money on rent. Owners go through a similar experience, except it's from renters who assert home owners are slaves bound to an antiquated concept and owning is a fool's game. And sure enough, the moment localroger countered your story of how renting worked for you with his own in favor of owning, lohmann jumped in:
"Also, for all those that claim owning your own home is so great and superior - take a look at an 30-year amortization table, for kicks.
Spoiler: 5 years in (when most people move), and you've only paid down 6% of the principal, despite being 17% of the way through the loan. Who's throwing money down the drain, again?"
Mentally, I connected lohmann's comment with yours, hence my "specious and simplistic comparisons"; the contention I heard was that anyone can get exactly the same benefits by renting as owning, so owning was always throwing money down the drain. But no one actually said that!
So I went off on this rant about how great owning is, which also disparaged renting as settling in your case, and that wasn't called for.
The truth is that owning and renting are not that simple: it is not ALWAYS better to own, just as it is not ALWAYS better to rent, and I shouldn't have let myself get drawn in to a false dichotomy. I guess I just get tired of this whole renting vs owning argument, but that's not worth getting all worked up and going off on a rant like I did.
I do think that, for me, owning is the right choice.
I also think some renters would rather own, but can't get a mortgage for some reason, and that a not insignificant percentage of those renters get hyperbolic about how great renting is because they don't want owners telling them they are "throwing money down the drain".
But Floydd, you have a great living arrangement, and renting works best for you, and that's cool.
I just read over the thread again, and what I originally wrote. Not only did I do you an injustice, but I really do come across as very fighty.
I over-reacted, my tone was not so very nice and I hijacked the thread in a very ungood way.
Sorry I got so heated, everyone.
posted by misha at 9:56 AM on March 19, 2012 [1 favorite]
I felt like I was repying in kind to your "laughing" at people who say you are throwing away your money on rent. Owners go through a similar experience, except it's from renters who assert home owners are slaves bound to an antiquated concept and owning is a fool's game. And sure enough, the moment localroger countered your story of how renting worked for you with his own in favor of owning, lohmann jumped in:
"Also, for all those that claim owning your own home is so great and superior - take a look at an 30-year amortization table, for kicks.
Spoiler: 5 years in (when most people move), and you've only paid down 6% of the principal, despite being 17% of the way through the loan. Who's throwing money down the drain, again?"
Mentally, I connected lohmann's comment with yours, hence my "specious and simplistic comparisons"; the contention I heard was that anyone can get exactly the same benefits by renting as owning, so owning was always throwing money down the drain. But no one actually said that!
So I went off on this rant about how great owning is, which also disparaged renting as settling in your case, and that wasn't called for.
The truth is that owning and renting are not that simple: it is not ALWAYS better to own, just as it is not ALWAYS better to rent, and I shouldn't have let myself get drawn in to a false dichotomy. I guess I just get tired of this whole renting vs owning argument, but that's not worth getting all worked up and going off on a rant like I did.
I do think that, for me, owning is the right choice.
I also think some renters would rather own, but can't get a mortgage for some reason, and that a not insignificant percentage of those renters get hyperbolic about how great renting is because they don't want owners telling them they are "throwing money down the drain".
But Floydd, you have a great living arrangement, and renting works best for you, and that's cool.
I just read over the thread again, and what I originally wrote. Not only did I do you an injustice, but I really do come across as very fighty.
I over-reacted, my tone was not so very nice and I hijacked the thread in a very ungood way.
Sorry I got so heated, everyone.
posted by misha at 9:56 AM on March 19, 2012 [1 favorite]
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