Subsidy Nonsense Yet Again (was: ... Live Well w/o a Car ...)

Rod Speed wrote:
Les Cargill wrote
Rod Speed wrote
Les Cargill wrote
SoCalMike wrote
Les Cargill wrote

********. That's the fairy story. Do the math yourself - if and
only if you can *actually afford it* - the TCO of ownership is
strictly less than renting - is it more frugal. What people do
is chase the tax break and pretend it's making them money. Well,
the marginal rate is still far less than 100%, no matter what.

This does not mean there are no strategies where home ownership is more frugal - just that one must prepare for it
properly.

Right now, the way prices are plummeting - it's a good
time to transition to owning, assuming you have stable income.
But what most people forget is all the peripheral cost of ownership.

all depends. if you can get a fixed rate mortgage for less than
what your rent payments are, and are willing to fix most things on
your own its probably worth it.

I expect most people woefully underestimate just how much
maintainence costs for a home.

I know I didnt. Its cost sweet **** all over 35 years now.

That's completely ridiculous.

Nope, fact.

No new roof,

Nope, it metal, raised ridge, its as good as it was new.

no plumbing issues?

Only very trivial stuff, tap washers.

No paint?

Nope, the outside isnt painted, concrete block, the inside is washable paint.

No carpet?

Nope, hard floors, quarry tiles. As good as when they were laid.

Two of the three houses I've bought were rehabs. I know what happens to a house that goes unmaintained.

Depends on the construction.


Fair enough, then. You specifically selected materials
for indestructibility. Cripes, my parent's house, build in the
late '60s, they had to replace the linoleum flooring because of
40 years of traffic wear.

The last rehab was $6k materials, but it would have been close to $25k if we'd hired it done.

And it's completely, totally different if you can stay in the same house for 35 years.

Yes, and few can do that with rentals.


I wouldn't rent the same property for 35 years. We'll probably
settle down in about ten years.

The average tenure is closer to five,

You dont have to keep changing the house you own
and no one I know has changed the house they own
at anything like that rate. When I built my house from
scratch myself, I managed to infect quite a few with
house owning and one of those has changed houses
in that time, and he changed the town he lived in.
All the rest are still in the house they built then
and so are all but one of my neighbours too.


Believe it or not, I worked day labor for a guy that
was doing exactly that when I was in college. He
ended up building an entire subdivision. He was also
lifting river rocks with a 40 horse Ford tractor to
where the hydraulics popped maniacally.

Things ever slow down enough for me to stay put,
I might just.

and the transaction costs aren't really even covered in that time.

Depends entirely on how you do it. I had quite literally none
with mine, didnt even bother with a lawyer or anything like that.

When you do what I do for a living, you have to move.

Yes, like I said, renting has some advantages if you move a lot.

Most dont tho.


Right.

Since just 1998, I've worked for a total of five firms. Only one of them even still exists.

Sure, but thats not that common.


Depends. I work in an industry where firms are keenly
subject to Schumpeterian forces. But if you backed
the right horse, you'd win big.

And you pay for that indirectly when you rent anyway.

That depends on the market you're in.

Nope. Its only dying ghost towns where the rental doesnt
cover the maintenance on the property you are renting.


I'd look around at the rental prices where you are. This is
fairly recent. After all, the mortgage market became very
good at inducing people who couldn't afford it to buy.

I'm seeing... pre 1990 prices on rental now. And lots
of vacancy. In multiple areas. But of course it depends.

One place we did rent was a dying town, and we got a hell
of a good deal. We knew it was dying, that's why we rented.

It covers the property taxes too.

The main thing that the rent doesnt cover is the interest on the mortgage.


Agreed. Hence my point that landlords must have a significant down
on property.

Each person must evaluate for themselves which makes the most sense.

Yes, but your claim about maintenance is far from the truth if you
choose the construction of the house with maintenance costs in mind.


No question - but most builder-built houses don't come with those
options, or they're very expensive.

But with how wages and real estate prices have diverged, the landlord has to have significant equity to even break
even.

That varys with the property market.

Fees, realtor commissions and other transaction costs can run as high as ten percent of the purchase price.

Only if you're stupid enough to go that route.


It's not exactly stupid.... 99% of housing purchases are like
that, and it's probably worth it. Takes a lot of factors to do it your
way, and if you get the paperwork wrong, you can (in the US) be unable
to sell, unable to bequeath the property or even be condemned.

All I can tell you is that I've always been able to rent much more cheaply than buy, to the tune of thousands per
year.

And if you are a spendthrift, you can end up with
**** all in the way of assets when you stop working.

So don't do that.

Easier said than done with spendthrifts.

I certainly don't.

I dont either, but I do recognise that owning is a form of forced saving for spendthrifts.

Nothing else works as effectively saving wise for them.


That's probably unfortunately true. And in years past, I might have
looked spendthrift, what with one income and two kids. But that was
then. Hasn't been that way for years.




--
Les Cargill

Vic Smith wrote:
On Sun, 15 Nov 2009 00:09:25 -0500, Les Cargill
wrote:

SoCalMike wrote:
Les Cargill wrote:
********. That's the fairy story. Do the math yourself - if and
only if you can *actually afford it* - the TCO of ownership is
strictly less than renting - is it more frugal. What people do
is chase the tax break and pretend it's making them money. Well,
the marginal rate is still far less than 100%, no matter what.

This does not mean there are no strategies where home ownership is
more frugal - just that one must prepare for it properly.

Right now, the way prices are plummeting - it's a good
time to transition to owning, assuming you have stable income.
But what most people forget is all the peripheral cost of
ownership.
all depends. if you can get a fixed rate mortgage for less than what
your rent payments are, and are willing to fix most things on your own
its probably worth it.

I expect most people woefully underestimate just how much
maintainence costs for a home. All I can tell you is that
I've always been able to rent much more cheaply than buy,
to the tune of thousands per year.

A lot depends on the construction of the house, age of stuff that has
to be maintained, etc.
Real estate taxes are the killer for some. Mine run about $400 a
month now.

Ouch.

In 12 years here I've spent maybe $15k on maintenance, including all
new windows, roof, new furnace and central air, new appliances, tree
cutting, etc.
Taxes have been over $40k.
Maintenance costs could have been lower if I did more of the work
myself or went with cheaper stuff.
Can't avoid the taxes though.
That's the first thing to look at when house hunting.
A lot also hinges on how much space you're getting. To get an
equivalent sized apartment would have cost many times what I've paid.

I've mostly rented houses. And what I found, through sampling
error or whatever, is that the simple monthly costs of rental were
usually lower. I've also seen several tales of woe from
wannabe landlords who ended up bankrupt over leveraged rent
houses.

My point is that since about 1980, wages ( as opposed to total
compensation ) have been pretty flat, and "what the traffic will bear"
in the rental market hasn't kept up with cost.

If you live spartan and don't care about collecting junk, or having a
garage, or having neighbors on the other side of the wall, an
apartment could well be cheaper, but it depends on the time frame
you're talking about.
Then there's the RE market itself - home costs - location, interest
rates, etc.
Lots goes into getting any sense from a calculation.

Absolutely.

But it's pretty hard to make a financial case for an apartment if the
time frame is 10 years or longer. Maybe less.

Agreed. I managed 9 years in *one* house I bought. The rest,
I gotta go chase a job. That one was shocking - that area had
effectively negative unemployment for 25 years before the bottom
fell out.

I'm assuming you don't get foolish and buy a home at an inflated
price, as many have done.

Oh, I did. Once. It all came out fine, though. I about broke
even on it, didn't lose that much of the upfront. Dummy me. It
was, at least a modest home. Although really, what I paid for it
was pretty much the original price plus inflation. It's now
worth about 75% of what it *originally* sold for in 1983, so
the guy who bought it from me....

Too bad for some youngsters that they fell into that trap.


The real problem there is credit cards. Bad craziness, credit cards.
Been there, too, to a modest amount. Not going back. Technically,
the charges were business finance ( contract travel expenses ), but
still... that took me about a year off plan.

--Vic



--
Les Cargill

Les Cargill wrote
Rod Speed wrote
Les Cargill wrote
Rod Speed wrote
Les Cargill wrote
SoCalMike wrote
Les Cargill wrote

********. That's the fairy story. Do the math yourself - if and
only if you can *actually afford it* - the TCO of ownership is
strictly less than renting - is it more frugal. What people do
is chase the tax break and pretend it's making them money. Well, the marginal rate is still far less than 100%,
no matter what.

This does not mean there are no strategies where home ownership
is more frugal - just that one must prepare for it properly.

Right now, the way prices are plummeting - it's a good time to transition to owning, assuming you have stable
income.
But what most people forget is all the peripheral cost of ownership.

all depends. if you can get a fixed rate mortgage for less than
what your rent payments are, and are willing to fix most things
on your own its probably worth it.

I expect most people woefully underestimate just how much
maintainence costs for a home.

I know I didnt. Its cost sweet **** all over 35 years now.

That's completely ridiculous.

Nope, fact.

No new roof,

Nope, it metal, raised ridge, its as good as it was new.

no plumbing issues?

Only very trivial stuff, tap washers.

No paint?

Nope, the outside isnt painted, concrete block, the inside is washable paint.

No carpet?

Nope, hard floors, quarry tiles. As good as when they were laid.

Two of the three houses I've bought were rehabs. I know what happens to a house that goes unmaintained.

Depends on the construction.

Fair enough, then. You specifically selected materials for indestructibility.

Nope, thats what I chose for other reasons and got that as a bonus.

Cripes, my parent's house, build in the late '60s, they had to replace the linoleum flooring because of 40 years of
traffic wear.

My parents didnt. They had quarry tiles too.

We've all had dogs that live inside and have never been into wall to wall carpets.

The last rehab was $6k materials, but it would have been close to $25k if we'd hired it done.

And it's completely, totally different if you can stay in the same house for 35 years.

Yes, and few can do that with rentals.

I wouldn't rent the same property for 35 years.

One of my relos did, what used to be called a 'maiden aunt'.

We'll probably settle down in about ten years.

The average tenure is closer to five,

You dont have to keep changing the house you own
and no one I know has changed the house they own
at anything like that rate. When I built my house from
scratch myself, I managed to infect quite a few with
house owning and one of those has changed houses
in that time, and he changed the town he lived in.
All the rest are still in the house they built then
and so are all but one of my neighbours too.

Believe it or not, I worked day labor for a guy that
was doing exactly that when I was in college.

Yeah, I employed one fella like that myself.

He ended up building an entire subdivision. He was also lifting river rocks with a 40 horse Ford tractor to where the
hydraulics popped maniacally.

Things ever slow down enough for me to stay put,
I might just.

Yeah, its got real pluses and minuses.

and the transaction costs aren't really even covered in that time.

Depends entirely on how you do it. I had quite literally none
with mine, didnt even bother with a lawyer or anything like that.

When you do what I do for a living, you have to move.

Yes, like I said, renting has some advantages if you move a lot.

Most dont tho.

Right.

Since just 1998, I've worked for a total of five firms. Only one of them even still exists.

Sure, but thats not that common.

Depends.

My dad did in fact move a lot in the first half of his life, military.

Didnt move all that much in the second half tho, once he had retired from the military.

I work in an industry where firms are keenly
subject to Schumpeterian forces. But if you backed the right horse, you'd win big.

And you pay for that indirectly when you rent anyway.

That depends on the market you're in.

Nope. Its only dying ghost towns where the rental doesnt
cover the maintenance on the property you are renting.

I'd look around at the rental prices where you are.

I dont need to, I know what they are.

This is fairly recent.

Not here it aint.

After all, the mortgage market became very good at inducing people who couldn't afford it to buy.

I've never believed that. The default rate was
far too low for that to be the case until the GFC.

I'm seeing... pre 1990 prices on rental now. And lots of vacancy.

Not here. There's still a significant shortage of rental property.

Sydney is quite literally dire.

In multiple areas. But of course it depends.

One place we did rent was a dying town, and we got a hell
of a good deal. We knew it was dying, that's why we rented.

Yeah, they can be cheap, but here they are a hell of a long way from any viable work.

It covers the property taxes too.

The main thing that the rent doesnt cover is the interest on the mortgage.

Agreed. Hence my point that landlords must have a significant down on property.

Not here.

Each person must evaluate for themselves which makes the most sense.

Yes, but your claim about maintenance is far from the truth if you
choose the construction of the house with maintenance costs in mind.

No question - but most builder-built houses don't come with those options, or they're very expensive.

Thats just plain wrong here. Very few arent brick exterior and almost none arent metal or tiled roof.

But with how wages and real estate prices have diverged, the
landlord has to have significant equity to even break even.

That varys with the property market.

Fees, realtor commissions and other transaction costs can run as high as ten percent of the purchase price.

Only if you're stupid enough to go that route.

It's not exactly stupid....

10% certainly is.

99% of housing purchases are like that,

Nope, not 10%

and it's probably worth it.

Nope.

Takes a lot of factors to do it your way,

Nope.

and if you get the paperwork wrong, you can (in the US) be unable
to sell, unable to bequeath the property or even be condemned.

It isnt hard to ensure that the paperwork aint wrong.

And it doesnt cost you anything like 10% to get someone to ensure that for you.

All I can tell you is that I've always been able to rent much
more cheaply than buy, to the tune of thousands per year.

And if you are a spendthrift, you can end up with
**** all in the way of assets when you stop working.

So don't do that.

Easier said than done with spendthrifts.

I certainly don't.

I dont either, but I do recognise that owning is a form of forced saving for spendthrifts.

Nothing else works as effectively saving wise for them.

That's probably unfortunately true. And in years past, I might have looked spendthrift, what with one income and two
kids.

I never was, but most of those I know are.

But that was then. Hasn't been that way for years.

Les Cargill wrote:


I expect most people woefully underestimate just how much
maintainence costs for a home.


I know I didnt. Its cost sweet **** all over 35 years now.


That's completely ridiculous. No new roof, no plumbing
issues? No paint? No carpet?


You need to understand that you are attempting to discuss a topic with a
troll that lives under an outhouse (thus no costs) - logic / facts will
be meaningless.

On Sun, 15 Nov 2009 00:09:25 -0500, Les Cargill
wrote:

SoCalMike wrote:
Les Cargill wrote:
********. That's the fairy story. Do the math yourself - if and
only if you can *actually afford it* - the TCO of ownership is
strictly less than renting - is it more frugal. What people do
is chase the tax break and pretend it's making them money. Well,
the marginal rate is still far less than 100%, no matter what.

This does not mean there are no strategies where home ownership is
more frugal - just that one must prepare for it properly.

Right now, the way prices are plummeting - it's a good
time to transition to owning, assuming you have stable income.
But what most people forget is all the peripheral cost of
ownership.

all depends. if you can get a fixed rate mortgage for less than what
your rent payments are, and are willing to fix most things on your own
its probably worth it.


I expect most people woefully underestimate just how much
maintainence costs for a home. All I can tell you is that
I've always been able to rent much more cheaply than buy,
to the tune of thousands per year.

Not true over the long term, given everything else being equal. Were
that true no one would rent property. Using the same reasoning you
must least your cars.

In article ,
says...
Les Cargill wrote:


I expect most people woefully underestimate just how much
maintainence costs for a home.


I know I didnt. Its cost sweet **** all over 35 years now.


That's completely ridiculous. No new roof, no plumbing
issues? No paint? No carpet?


You need to understand that you are attempting to discuss a topic with a
troll that lives under an outhouse (thus no costs) - logic / facts will
be meaningless.


I didn't see the post, but, somehow, it sounds like you are
talking about Rod Speed. He doesn't live under the outhouse. He
lives quite comfortably in a nice, suburban house in a nice area.
Although his parents are hoping that he will move out some time
before the age of fifty.


--
Get Credit Where Credit Is Due
http://www.cardreport.com/
Credit Tools, Reference, and Forum

"Coffee's For Closers" wrote in message
...
In article ,
says...
Les Cargill wrote:


I expect most people woefully underestimate just how much
maintainence costs for a home.


I know I didnt. Its cost sweet **** all over 35 years now.


That's completely ridiculous. No new roof, no plumbing
issues? No paint? No carpet?


You need to understand that you are attempting to discuss a topic with a
troll that lives under an outhouse (thus no costs) - logic / facts will
be meaningless.


I didn't see the post, but, somehow, it sounds like you are
talking about Rod Speed. He doesn't live under the outhouse. He
lives quite comfortably in a nice, suburban house in a nice area.
Although his parents are hoping that he will move out some time
before the age of fifty.


Heh! I always assumed he was older than I am (mid 50s). He writes like an
"old fart", or at least he did about 7 years ago when I first killfiled him.

clams_casino wrote:
Les Cargill wrote:


I expect most people woefully underestimate just how much
maintainence costs for a home.


I know I didnt. Its cost sweet **** all over 35 years now.


That's completely ridiculous. No new roof, no plumbing
issues? No paint? No carpet?


You need to understand that you are attempting to discuss a topic with a
troll that lives under an outhouse (thus no costs) - logic / facts will
be meaningless.


He's actually pretty coherent today. I know Rod very well from sci.econ.

--
Les Cargill

On Nov 16, 11:56*pm, Les Cargill wrote:

He's actually pretty coherent today. I know Rod very well from sci.econ.

They must love him there.

Cindy Hamilton

Cindy Hamilton wrote:
On Nov 16, 11:56 pm, Les Cargill wrote:

He's actually pretty coherent today. I know Rod very well from sci.econ.

They must love him there.

Cindy Hamilton

You've no idea. I thought he was a 'bot for the longest time.

--
Les Cargill