Korean Job Discussion Forums

[Bryan]

I don't understand why house ownership is pushed so hard on everyone. "Well you're getting older you should buy a house so you have something when you're older." But the S&P 500 traditionally outpaces the real estate market by a few percentage points, so why don't more people consider that option?

I think everyone just unthinkingly purchases a house because it is a part of that ordained life-track that everyone has been taught to run on. Finish college, get married, buy a house. At least, that's a factor in many people.

I'm not saying house ownership is a bad investment or a good investment (that has to be evaluated based on the individual place so I don't want to hear "home ownership is a good investment regardless of the house you buy"). I'm saying I think many people buy a home because its basically expected, and they never really thought of any other option. Agree?

[T-J]

It's nice to have someplace to live. There is a wonderful feeling of the home you reside in being yours. I do agree it is not for everyone.

[Bryan]

True, but I don't think it's smart to make a $500,000 investment decision for a feeling that most people don't even bother to appreciate.

[saw6436]

I bought a home not as an investment but as a place to raise my family. If values increase and I make a bit of coin in the future, thats good. If values stagnate or drop I really don't care much. At the end of the day its all about having a little slice of the world that is mine.

Years ago I bought 7 acres of land in the North Carolina mountains. Terrible investment (property hasn't increased in value in 15 years). But the pleasure this little patch of land has given me is priceless.

[blackjack]

you also have to consider what you are paying in rent

[Tiger Beer]

There are certainly two different kinds of people in the world - owners and rentors.

I was very content as a perpetual rentor for years and years...but I certainly would like to make the shift to owner in the future.

Either way, you still have monthly fees...but with the owner route...at least at some point those monthly fees just stop coming in Particularly useful when you are too old to work to pay rent.

[xpat]

I have my opinion, but if you want to compare you can calculate which is better in the long run.
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

[Draz]

People buy houses because it makes more sense to put your money into a house than into a landlord's pocket. If you're planning to stick around somewhere for a couple years, it makes much more sense to buy a house. I have no solid plans, so I'm not buying a house.

Yet.

[itaewonguy]

you can rent a life time, and at the end of it, you will probably have spent less renting than buying.. also you can change houses when ever you want, and upgrade to new houses in new locations and are not tied down..

[Bryan]

[Rae]

Where I'm from, everyone buys. It doesn't matter if you're single or married, it just makes more sense because the price of rent was so high. I don't know about now but even about a year ago, it wasn't uncommon to have mortgages cheaper than a monthly rent. That aside from the tax write-off, it just made sense. It was more of a thing to do, something that made sense - the money you're putting in goes into your investment instead of someone elses.

I was close to buying a place before I left for Korea with the help of my Mother (I was newly single and financially recovering from a divorce). I also felt the pressure to do it because it was what people do. But although I love my hometown, I wasn't sure I wanted to stay for good and I didn't personally think the responsibilities outweighed the advantages, especially if I'm moving abroad.

I agree with you. There is definitely pressure and most people just conform, but in doing so, it kind of locks you in (whether you're renting it out or living there yourself). I think it's a personal thing: a lot of people make good money buying homes and renting it out, the squeamish (like myself) would only buy for personal use.

Personally, I gotta agree with saw6436. I won't buy a home unless I know I want to settle in that area for sometime. Buying a home to raise a family makes the most sense to me.

[Young FRANKenstein]

If I could pay for the house outright, I would probably do it. I have no desire to be in thrall to the banks and have them take my house if I miss one mortgage payment.

[RedRob]

There is a lot of pleasure to be had tending yr own garden, planning renovations etc knowing that the value that you add to the property by doing so is yours, not a distant owner. There is also a bit of coin to be made by buying a scruffy house in a good area and doing it up. I'm doing this right now, and it is both more fun, and more work than I had anticipated. Depends if you like getting yr hands dirty or not I guess.

[Cheonmunka]

I don't know about the US which tends to have high annual land taxes, in Aussie or NZ, if you put down a decent deposit and rent the place out, if it's cashflow positive - pretty easy to find in this downturn then the tenants can pay the house off for you. You don't actually have to invest any more of your own money if you don't want to - you may have some small repairs and it does take a bit of your time dealing with small issues and increases your paperwork ... you will likely get a bit of capital gain later on if you sell a place that you bought well.
Also, I've seen a lot of companies merely liquiidate and give investors the finger, leaving them with zilch. If your property's insured shit like that doesn't happen.

[brento1138]

Let's see. If I rent a house/apartment for.. let's say $800 for the rest of my life assuming I live to age 81 (Canadian average)...

80-27= 53 years of life left.

53* (12*800) = $508,800

Guess I'll have nothing to give to my offspring if I rent. So might as well buy a $500,000 house. Also, who knows. In the future maybe 800 dollars will buy us a coca-cola.