Post: #1

I am currently 24 and if i continue on leading or living the life im living now for the rest of my life, i dont think i will ever need to buy a home. I am constantly travelling from place to place and i dont think there is a city where i would like to spend the rest of my life, although i like many cities but none are perfect to live for years and years. So i think it will be pointless for me to buy a home and only live there 3 months in a year and then go to another country. When travelling from country to country i can just rent a luxury flat or a home for 3 or 6 months while im there and then when i go to another country, i will do the same thing (the maximum i will spend will probably be 5000 a month, but i am sure it will be a lot less). So buying a house for 500,000 dollars is pointless for me, i can spend all that money doing other things and invest and invest more (unless i have more than 10 million dollars then i may think about buying a home).

Any of you agree with my perspective in that context? Just wondering if i am the only one who thinks like that.

Post: #2

I have the same philosphy, but if I had bought a place when I was 24years of age - I would be laughing right now.

Not sure where you live, real estate in most parts of the USA is dying right now. If you are in a city with a strong rental population then owning a place could be a nice long term investment for you.

Post: #3

Yeah, if you travel a lot, don't bother.

If you have the money to bankroll it, buy an investment property (probably business) and rent it out for the passive income to fund your travels.

Post: #4

Sounds like you got it figured out matey

Post: #5

Lottery...

what in the world do u do to fund jumping ship so often?

Post: #6

(02-11-2011 03:07 AM)Dash Global Wrote:  Lottery...

what in the world do u do to fund jumping ship so often?

Maybe he won the lottery

Post: #7

(02-10-2011 08:01 PM)lottery Wrote:  I am currently 24 and if i continue on leading or living the life im living now for the rest of my life, i dont think i will ever need to buy a home. I am constantly travelling from place to place and i dont think there is a city where i would like to spend the rest of my life, although i like many cities but none are perfect to live for years and years. So i think it will be pointless for me to buy a home and only live there 3 months in a year and then go to another country. When travelling from country to country i can just rent a luxury flat or a home for 3 or 6 months while im there and then when i go to another country, i will do the same thing (the maximum i will spend will probably be 5000 a month, but i am sure it will be a lot less). So buying a house for 500,000 dollars is pointless for me, i can spend all that money doing other things and invest and invest more (unless i have more than 10 million dollars then i may think about buying a home).

Any of you agree with my perspective in that context? Just wondering if i am the only one who thinks like that.

When i was 24 I felt the exact same way, now that I'm 29 and seeing how dirt cheap houses are I'm getting a strong itch to buy. Then again as I've gotten older I've become a lot more interested in DIY type stuff and want my own home to build everything the way I want it. I have also become a lot more career oriented and that involves staying in the US.

Post: #8

In these uncertain times, personally, I wouldn't buy real estate.

Real estate ties you down to a geographical location. Right now everything is up in the air. The USA could tank unimaginably, what about global warming? Maybe some place that is nice to live now, won't be in 10 years because of weather pattern changes. Not that I believe in global warming, but I'm just saying there's a lot of uncertainty out there.

If your young, no kids, and not married, I'd probably say you want to stay mobile.

Plus, real estate agents and all those involved in profiting from mortgages including lawyers, banks etc.etc. they all push real estate as an investment. The only time real estate is an investment is when it's giving you an income after paying all the bills, and there are few places in the USA that will do that these days.

When you buy real estate you have to pay taxes, insurance on the home, sometimes insurance on the mortgage, interest on the loan, maintenance costs, if it's a condo a maintenance fee, plus the cost of upkeep, things wear down things need to get replaced... No one ever mentions these costs. Plus the cost of being tied down to one geographical location....

When you rent you're landlord gets all the headaches, and you just pay rent.... It might seem more expensive but its' really not because when most people say that they can buy cheaper than they rent, all they're calculating is the mortgage payment....

right now you want to be mobile...

Post: #9

I think I'm with Dan on this one. People are too quick to say that rent is "wasting" money. Sure you're not building equity, but if your home's value goes down a lot, yet you're still paying the same mortgage payment, that's wasting money too. Even a 1.1% interest rate is better than that.

Rent buys you the intangibles Dan is talking about, the prime one being freedom. You should not buy a home for investment purposes generally, but rather because you truly want to live there.

As for expenses, as Dan points out there are many and they are varied. For example, in the DC area we had a snow storm couple of weeks ago and my gutter was damaged, and some tree branches broke because of the heavy snow. Guess who has to pay for all those repairs? Also, rent typically includes utilities, but these are extras on top of your mortgage if you own a home.

If you're under 30 I suggest you rent and live a flexible lifestyle and try and save money.

Post: #10

(02-21-2011 01:49 PM)Menace Wrote:  I think I'm with Dan on this one. People are too quick to say that rent is "wasting" money. Sure you're not building equity, but if your home's value goes down a lot, yet you're still paying the same mortgage payment, that's wasting money too.

Here I disagree. In some states there is usually an option to get out - if the bank foreclosures on you, and sold the property cheaper than your loan amount, they cannot get back to you for the remainder. This is called "strategic default".

Also if you purchased home to live in, not just as investment, and you didn't buy more house than you could afford, you shouldn't really care about its current price. Market goes up and down, it is down now, it will be up again in a few years. Not a big deal.

Quote:Rent buys you the intangibles Dan is talking about, the prime one being freedom. You should not buy a home for investment purposes generally, but rather because you truly want to live there.

I know a few guys who bought homes, lived there for a year or so, then rent it out and went out of country. May be a good option if you suddenly got a lot of money (like executed the stock options).

Quote:As for expenses, as Dan points out there are many and they are varied. For example, in the DC area we had a snow storm couple of weeks ago and my gutter was damaged, and some tree branches broke because of the heavy snow. Guess who has to pay for all those repairs?

You do. This is not different from any business expense - those are always passed on consumers.

Post: #11

(02-21-2011 11:42 PM)oldnemesis Wrote:  Here I disagree. In some states there is usually an option to get out - if the bank foreclosures on you, and sold the property cheaper than your loan amount, they cannot get back to you for the remainder. This is called "strategic default".

Some states also have what is called a "deficiency judgement" that is used to get the remainder of the loan balance if the house sells for less than what is owed.

It doesn't happen a lot but the banks can issue a 1099 for the deficiency. That will be included on your tax records as income unless you can prove hardship.

Quote:I know a few guys who bought homes, lived there for a year or so, then rent it out and went out of country. May be a good option if you suddenly got a lot of money (like executed the stock options).

I believe you need to be careful at the type of loan you get when it comes to renting. I think you need to live in the house for at least a year if you got an FHA loan.

Post: #12

(02-21-2011 11:42 PM)oldnemesis Wrote:  Here I disagree. In some states there is usually an option to get out - if the bank foreclosures on you, and sold the property cheaper than your loan amount, they cannot get back to you for the remainder. This is called "strategic default".

Yes, I'm aware of this idea. Of course you can also stop paying mortgage payments if you're upside down and let the bank foreclose. It will have a negative impact on your credit history, although to what extent it may affect your ability to get a future loan, I don't know.

Quote:Also if you purchased home to live in, not just as investment, and you didn't buy more house than you could afford, you shouldn't really care about its current price. Market goes up and down, it is down now, it will be up again in a few years. Not a big deal.

Agree here. I guess I was just referring to someone up thread talking about it as an investment.

Quote:I know a few guys who bought homes, lived there for a year or so, then rent it out and went out of country. May be a good option if you suddenly got a lot of money (like executed the stock options).

Yeah, I'm one of those people. I have a home that I rent out that essentially pays for itself. You make your money on a home when you buy it, not from rental payments. However, you do have to deal with renters and the issues associated with them. If you switch renters there is often an up front re-conditioning cost (repair, replace, repaint) you have to pay to make it attractive for the next set (I have had this happen).

Quote:You do. This is not different from any business expense - those are always passed on consumers.

I guess what I meant is that you need to come up with the cash up front to deal with things like this, whereas this is not the case when you rent.

Post: #13

"You make your money on a home when you buy it, not from rental payments."

When you "buy it?" or Sell it. i.e. on the net appreciation?

If the rent covers your mortgage plus gives you some extra cash to burn, is that not making money from your investment in a home?

Post: #14

Most landlords would not allow me to install a pool for my nude parties.

Post: #15

I don't get your point, OP. So you are saying you rather spend your money and earn it again, without saving it? Buying a home is not just to live in or to be empty. It's an investment! Rent it out and use the money to travel. I'm 21 and i'm getting my first home loan in a few months. I consider it as a piggy bank.