Sum sites start with "deside if it make financial sens tu bi or rent".
That is the rong quesshun. A home is more emoshun than money sens.
Others sae oen-yer-home is the amerikan dreem. It is ok tu dreem,
but yu kant liv on dreems. Sum sites sae a home is an investment kauz
yu bild "equity". Yu kan then make munee wen yu sell it or rent it out.
This is hogwash. Yu dont bi tu make munee, yu bi tu hav a plaes tu liv.
The storees bout the munee yu kan make R gratelee xaggerrated.
hous as a botomless pit is closer, but its not that bad.
The reesuns tu bi R not gaejed in dollars & sents.
The hous is a statement bout yu. Wen yu rent, yu R foot-lues &
fansee-free...a vagabon. Wen yu oen, yu R upstanding pillar əv the
kommunitee. Well, maby onelee an averaej joe hu aksept responsabilitee
& werk hard for wot yu want. A hous require lots əv werk. If yu R
not redee tu werk for it, dont duit. The werk starts on dae 1. Yu kan
yuzyally find a plaes tu rent in a dae or 2. Tu find a home will take
months. Yu kan oft du paperwerk tu rent in 3-4 hours. Tu bi a hous
will take 1-3 months, just for the paperwerk. Landlord mae want munee
up front for "sekerity deposit" & "kleening fee" & 1-2 months rent.
Banker will want a down paement & so manee fees, no-won kan keep trak
av em (klosing cost). Yu gotta be init for the long haul. Yu kant
chaenj yer mind & walk awae. Big up-front kost require "komitment".
The biggest advantage əv oen yer home: it is yers, yu oen it,
yu kan du pretty much wot yu want at home...free, independent, proud.
Wen yu bi, yu get rid əv the landlord. Yu get more freedom but
more responsabilitee. Yu gotta du stuff landlord did. And werry
bout all the problems that kan kum up. Most əv us hav the erj tu stae
in won plaes, put down roots, join the naberhood. The hous is a simbel
av stability, safety, maby even pride...home.
Sum renters komplaen bout restrikshuns the landlord impose. Then
em bi a hous in a homeoeners asoseeashun & find out wot 1000
paejes əv restrikt look like. Look b4 yu leep.
Yu gotta look at the cost bekauz yu gotta pae for wot yu want.
Tu bi, yu gotta konvins a banker tu lone yu munee...get a morgate.
The stuff yu gotta du tu get a morgage kum later. For now, assume
yu kan get a morgage.
The program calculate $/month kost əv oen-a-hous so yu kan kompare
it tu rent-a-shak. Rent is kleerkut...yu giv landlord x $/month.
Rent oft kuvers water/sewer/trash. It mae inklude other yutilitees.
Hous cost...yu gotta pae for a lot more thangs... taxes & inshuer,
more yutilitees, maentenans, upkeep, replaes, fix, impruev, kleen.
And dont forget the morgage.
Most hu bi, get a bigger plaes. If it kost more, dont dispaer, prepaer.
Theer iz a lotta hipe in the media bout how yu kan save on Federal
inkum tax bekauz yu kan dedukt the morgage interest & hous taxes.
This depends on interest rates, how much money yu make, & how hi the
hous tax.
Tu be werth NEthang, the itemized dedukt gotta be > standard dedukt.
=11,400$ for joint retern(2004). And then add in 1000$ for property 2001
tax...12,400$. & more if yu hav "dependents" (kids).
US medium inkum= 54,800$ per houshold (guvt talk for famlee)(2009).
If that famlee got the max morgage em kan afford (program 7, output 2)
hav perfekt kredit, dont hav NE other debt (& thus get the max-max morgage)
Result depend on interest rate.
In Mar 05 with 5.79% interest on 30 yeer lone, max lone=152,700$.
Morgage paement (PI)=895.00$/month. Yeer 1 interest=8,790$.
Yu pae less interest in yeer 2-30. This is wae belo 12,400 std dedukt.
Yu kan dedukt morgage interest & lokal guvt hous tax if yu itemize.
If lokal tax is very hi...3%, tax=4,580$. Interest+tax=13,370$.
Yu kan save a fyu $ on this tax givawae at taxpaer expens, but
oenlee the first fyu yeers. If yu R in 15% tax braket, yu save
146$ on inkum tax in yeer 1.
If interest rate is hi, yu save more. If yer a milyunaer, & bi
a 5,000,000$ hous, yu save more. In fakt, the rich save a bigger %
on theer inkum tax than the middel klas. Poor folk dont save 1 penny.
The top 20% inkum fat-kats hav median inkum=83,500$/yeer. Em kan
save on fed inkum tax even at the lo 5.5% in april 2004. Em kan get a
240,649$ morgage. First yeer interest=11,914$, hous tax=4,359$
Em kan itemize dedukt & save 1,700$ on Federal inkum tax.
In Feb 06, max lone=226,875$. Interest=15,240$, tax=4,577.5$.
Sum=19,818$. Em save 2,889$ on fed inkum tax.
Theer R taels bout rent alwaes goes up evree yeer and yer morgage
paement staes the same. This is banker proppaganda...him wanna make money
bi sell yu $. The paement tu banker for interest + prinsapel is fixed.
But eskro goes up evree yeer kauz taxes go up evree yeer...garanteed.
Hous inshuer almost alwaes go up. The other kosts əv liv in a hous
go up more or less same as jenral flate rate(inflation).
Zampel...100,000$ lone at 5.5%, 30 yeer...pae tu banker=567.79$/month.
eskro=208.33$/month. But if flate rate=5%/yr, in 30 yeers, eskroe=
899.99$/month...more than yu pae tu banker.
Rent depend on suppli & demand. It mae go up, or down, or not.
Bewaer əv "analysis" that sae yu kan sell the hous after 5 yeers at
a big profit. Em sae hous pries go up 8%/yr...46.9% in 5 yrs. Sell
100k$ hous at 146,900$ minus maby 5000$ cost. Yu net 42,000$ profit.
But yu only put up 2000$ down, so yu make 2000% profit. That is kalled
leveraejed tu the hilt. Sounds grate. But theer R probs. Biggest
hole iz...yu gotta find a plaes tu liv. So yu bi a nu hous. Pries iz
as ski-hi as the won yu sold. Yu rolled over intu nu & bigger morgage
fer nuther 30 yeers. All yu get outta it is bigger bills evree month.
Du this a fyu times & sudden...yu R 45, get laed off...no job, no inkum.
No hope yu will ever find a reel job...won that pae even 60% əv wot yu
had yesterdae. Takes 2 yeers tu find job as a dishwasher. Bi then
the banker took bak the hous, yu went bankrupt...lost evree thang.
Base yer life on fanasee, die bi fanasee.
Even bigger fanasee...interest onlee morgage. Folks looking for
eezee wae tu get rich...gotu "seminar". Hukster sell yu on idea.
Get morgage weer yu onlee pae the interest...not won dime tu pae down
prinsapal. Yer monthlee paement is less. Yu hav more free money tu "invest".
Him sae: put yer money intu more houses. All finansed same wae. Basik
idea is hous "value" alwaes go up. So all yer "investments" in more
houses alwaes sho a profit. If yu ever need NE $, yu kan sell won əv
yer hord əv houses. This is an empire bilt əv plae kards. Wen the
smallest wind kum, it blo down yer kard kassel. Yu go bellee up.
Note this idea inkludes...yu gotta rent all em "propertees". Yu
bekum a landlord over empier of 20 houses. Thank bout if yu wanna
werree bout renters alwaes late paeing rent, alwaes komplaen bout
evreethang bout the plaes em rent, legal hassels tu evikt nonpaers
that go on & on in kort fer 5 yeers. The lawyers will bankrupt yu if
the wind dont get yu first.