Not wanting to be outdone by NCIX, Toys-R-Us steps up
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@Unperverted-Vixen said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@Benjamin-Hall said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Too much of a media push about how homeownership == good citizenship
I feel like that's less the media's fault and more a result of our suburban sprawl. In many (most?) areas, rental opportunities just aren't there.
I wouldn't put any of it on the media. It was an explicit push by Bush: "Ownership society." But pretty much everyone in government went along with it.
(Don't get me wrong - I'm much happier in a suburb than in densely urban terrain. But it does seem to cut off certain options.)
I'm sure this varies widely by area. Lots of rental properties around my parts of suburbia.
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@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Which means they fall into "You suck at economics, yes you totally suck" thread prime material, since that house payment of theirs is over 50% "wasted" money (interest)
But they probably get to deduct that on taxes and their total payment (including taxes and other expenses like mortgage insurance) is probably similar (if not cheaper!) to what they'd pay in rent. After all, the property owner has to cover his mortgage interest, etc.
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@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@Unperverted-Vixen said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@Benjamin-Hall said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Too much of a media push about how homeownership == good citizenship
I feel like that's less the media's fault and more a result of our suburban sprawl. In many (most?) areas, rental opportunities just aren't there.
I wouldn't put any of it on the media. It was an explicit push by Bush: "Ownership society." But pretty much everyone in government went along with it.
I was blaming government for using the media to push that idea. Sorry if it wasn't clear. I was focusing on the role of government.
Before anyone complains, I also blame banks and brokers and individuals. Everyone was to blame--blame is not conserved. Multiple people can all be 100% at fault.
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@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Which means they fall into "You suck at economics, yes you totally suck" thread prime material, since that house payment of theirs is over 50% "wasted" money (interest)
But they probably get to deduct that on taxes and their total payment (including taxes and other expenses like mortgage insurance) is probably similar (if not cheaper!) to what they'd pay in rent. After all, the property owner has to cover his mortgage interest, etc.
My current monthly cost (including all of the expenses) is the same or less than the rent i was paying. On 2x the space and much nicer area/fixtures/etc.
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@Benjamin-Hall said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@Unperverted-Vixen said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@Benjamin-Hall said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Too much of a media push about how homeownership == good citizenship
I feel like that's less the media's fault and more a result of our suburban sprawl. In many (most?) areas, rental opportunities just aren't there.
I wouldn't put any of it on the media. It was an explicit push by Bush: "Ownership society." But pretty much everyone in government went along with it.
I was blaming government for using the media to push that idea. Sorry if it wasn't clear. I was focusing on the role of government.
Yes, that's how I read your comment.
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@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
But they probably get to deduct that on taxes and their total payment (including taxes and other expenses like mortgage insurance) is probably similar (if not cheaper!) to what they'd pay in rent. After all, the property owner has to cover his mortgage interest, etc.
Not after last year's tax code changes. The increased standard deduction means most people won't be doing that anymore, I don't think. (I certainly won't be.)
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@Unperverted-Vixen said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
But they probably get to deduct that on taxes and their total payment (including taxes and other expenses like mortgage insurance) is probably similar (if not cheaper!) to what they'd pay in rent. After all, the property owner has to cover his mortgage interest, etc.
Not after last year's tax code changes. The increased standard deduction means most people won't be doing that anymore, I don't think. (I certainly won't be.)
True. Not sure where I'm going to fall on that. Still, the overall payment amount is often favorable.
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@Unperverted-Vixen said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@boomzilla said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
But they probably get to deduct that on taxes and their total payment (including taxes and other expenses like mortgage insurance) is probably similar (if not cheaper!) to what they'd pay in rent. After all, the property owner has to cover his mortgage interest, etc.
Not after last year's tax code changes. The increased standard deduction means most people won't be doing that anymore, I don't think. (I certainly won't be.)
@boomzilla I think I'm right at the border of deductability because I have 10% in charitable donations as well as my mortgage and my income (and mortgage) is safely in the non-phase-out zone.
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@boomzilla
In general, within the first 7 years of a 30 year mortgage (for an $80k starter house), my $750 house payment (including property taxes and insurance escrow) has been:- Principal $150-250
- Interest $350-450
- Property taxes $100
- Insurance $50
Of those four categories, Interest and Property taxes are provisionally tax deductible, so I might get 25% of that back on my federal taxes (assuming I have enough other itemized deductions to make itemizing better than the standard deduction, and that I'm not above the phase-out line). Even assuming best case, that reduces the effective payment to $612.50, of which at least $362.50 is "rent" to the bank and the insurance company, and I still haven't spent a penny on the maintenance expenses of the house.
Lawn care is around $100 per month during the summer (and plowing probably gets close to that in the winter, depending on where you live) -- or you can make your kids do it, but that's still someone's time and your maintenance expense for the equipment.
And then you have the normal depreciation of the house (which is around 4% of the value of the house per year in terms of "tax value" for a rental property, so that seems like a good starting estimate) at $267/mo, which is kind of the catch all for average expected repair costs of the house's fixtures.
So now I'm paying:
- Mortgage interest (ex deduction): $262.50-$337.50
- Insurance: $50
- Property taxes (ex deduction): $75
- Depreciation/repairs: $267
- Property care: $100
- Total "monthly rent": $754.50-$829.50
And, in my area, what few starter houses are available for rent rent for around $700/mo.
But, since people don't see the depreciation cost and usually don't think about taxes and insurance, home ownership is obviously better than renting, you're building up equity!
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@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
Lawn care is around $100 per month during the summer
That must be a giant ass-lawn. Is it really that common for landlords to provide that?@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
And, in my area, what few starter houses are available for rent rent for around $700/mo.
As I said, this will vary by location. To rent something comparable to what I have now (bought ~11 years ago) I'd have to pay ~30% more. Some of that would be covered by HOA dues, but not that much.
@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
But, since people don't see the depreciation cost and usually don't think about taxes and insurance, home ownership is obviously better than renting, you're building up equity!
If they're paying mortgage insurance then it's almost certainly part of their payment and put into an escrow account. It's true that you have to pay for maintenance over the years but your payment is probably much less volatile (assuming fixed rate mortgage).
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@boomzilla
My property insurance is $600 a year. Mortgage insurance is technically interest (and tax deductible as well), though I'm not paying any.I suppose the lawn expense is a bad comparison - I think about it because every time I've rented I've been in an apartment complex, where the landlord does handle the lawn care & snow removal; most single family house rentals aren't going to include that, you're correct there. I went with what I could find as standard pricing online, $30-50/service, depending on weekly/bi-weekly/monthly
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@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
My property insurance is $600 a year. Mortgage insurance is technically interest (and tax deductible as well), though I'm not paying any.
Mortgage insurance is not technically interest. In any case, if you rent and your landlord has those expenses then you're absolutely paying them with your rent money.
The real advantage to renting is the lower initial cost and the flexibility to move. There's usually lower risk for maintenance costs, but if those are really high then you can probably expect the rent to increase to cover that, though it's a more gradual expense than having an immediate expense to pay (or to finance).
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@izzion said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
@boomzilla
My property insurance is $600 a year. Mortgage insurance is technically interest (and tax deductible as well), though I'm not paying any.I suppose the lawn expense is a bad comparison - I think about it because every time I've rented I've been in an apartment complex, where the landlord does handle the lawn care & snow removal; most single family house rentals aren't going to include that, you're correct there. I went with what I could find as standard pricing online, $30-50/service, depending on weekly/bi-weekly/monthly
That's apples and oranges though. I'm in a condo (Dutch 'appartementsrecht'), I own my appartment, but I still have to pay service fees for maintenance of the shared parts and exterior of the complex.
(Note the legalese is a bit more complicated than that but irrelevant here)
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@Benjamin-Hall said in Not wanting to be outdone by NCIX, Toys-R-Us steps up:
I'm curious how much these mortgage laws in various countries affect the % of households who own rather than rent.
That would indeed be interesting to look at. However just looking at the home ownership side of things, I'm not sure I see some obvious pattern:
I'm even surprised to see France at the same level than the US or UK, that are in popular culture (in France at least) much more associated to a home-ownership culture than France. And that definitely has very different mortgage laws than the US or UK.
Overall, like a lot of things, laws here are very protective of the buyer (at least on paper... unintended consequences and so on...), with things like mandatory insurances, or some kind of complicated mutual guarantee society that takes over the banks if you fall behind your repayments.
Yet despite that, there is apparently no significant difference in home ownership, so...
List of countries by home ownership rate - Wikipedia