Is it woth owning a house/property if you are going to be a single?

[YS2003]

In USA (and many other countries, I believe), owning a house/property is a must to build your net worth. But, if you are a single person, does it really matter if you own a home? After you die, your properties will go to the state if you have not assigned someone who can inherit your stuffs. I am not attached to any one place. So, it is not important for me to stay in certain areas. I can pack up and take a hike in a few days.
Edit: Owning a home means the property tax (to finance schools and other stuffs your local gov't wants to spend, home owner's insurance, home maintenance, and etc. This question is based on factoring in all the negative effects of owning your own home.

[Legolamb]

If you want to increase your net worth via real estate, i.e., buying at one price, selling at a higher price in the future, what difference does it make if you're single or not?

[Sun Baked]

If you get a single family home, it just means more lawns to mow and work for a single person.

But you can also have fewer kids jumping up and down on your head.

[swiftaw]

It can save you money while you are alive too,

1) The interest on your mortgage is tax deducible.
2) After the length of your mortgage, you will own the property outright, hence no more payments, whereas you have to pay rent forever.

[MacNut]

But you still have to pay taxes.

[YS2003]

But you still have to pay taxes.

Thank you, MacNut. I had to edit my post.

The keyword is "single person." Which means there is no dependent. Under this scenario, when I die, I don't have to worry about anyone else (as I don't have to leave things to someone else through inheritance).

[MacNut]

Just curious but how old are you and do you ever intend to have a family.

[Peterkro]

I think you need to differentiate between your net worth and your net financial worth not the same thing at all.:rolleyes:

[orangemacapple]

i would say, if you're under 50, go for the house. if you're over, then rent.

there are perks of ownership, along with yard maintenance and house upkeep. it's a decent hedge against inflation and your interest payments come off your income. and a single homeowner is a chick magnet, so you may not be living alone very long --- there's always women looking for a place to live almost free.

if you're over 50 or so, an apartment makes more sense. no worries about upkeep and yard maintenance. but, your rent is likely to go up every couple years as housing around you appreciate.

if you don't need either, then just travel the world until you decide you have to stop and live someplace. there's always someplace to live in the world, different countries can be appealing places to live.

i'm 55, single, retired, and live in a paid-for house. that has it's bennies. utilities and taxes and insurance cost me about $250/mo. i live in a semi-rural area with a couple acres of land.

[YS2003]

Just curious but how old are you and do you ever intend to have a family.
I am in early 30's and against my parents' wishes, as of now, I don't have any interest in having a family. I may change this stance of mine; but, knowing how I am, I think I will stay true to myself until the time I die.

[YS2003]

i'm 55, single, retired, and live in a paid-for house. that has it's bennies. utilities and taxes and insurance cost me about $250/mo. i live in a semi-rural area with a couple acres of land.

I have not thought about owning property in the rural ares seriously (I did search the areas where there are not many young families are located---young families = higher property tax to finance schooling for kids (which I am not going to have). I believe that would be a good way to build equity as I get older. No landlord to worry about. Maybe I can get a pet dog as I used to have when I was still at my parents' home years ago.

[orangemacapple]

I have not thought about owning property in the rural ares seriously (I did search the areas where there are not many young families are located---young families = higher property tax to finance schooling for kids (which I am not going to have). I believe that would be a good way to build equity as I get older. No landlord to worry about. Maybe I can get a pet dog as I used to have when I was still at my parents' home years ago.

you're only as far from civilization as your computer. and no matter where you go in this country, there's always a walmart within 1/2 hour. ups delivers anyplace there's an address in the u.s.
ok, i have to drive 1/2 hour to raleigh and then another 30 minutes to get to some cultural events there within the city limits. not really so bad. i got a couple chickens in my backyard and a goat. and a cat.

[WildCowboy]

You do realize that you also pay property taxes when you rent, right? They're just factored into your rent as your landlord passes them along to you.

Things obviously vary from market to market, landlord to landlord, and property to property, but typically somewhere in the neighborhood 60% of your rent goes to cover the expenses of the place. The rest is profit to the landlord. Obviously there are a lot more considerations when you're deciding whether to rent or own, but that's one thing to think about.

Your net worth isn't just about your heirs (or lack thereof)...your net worth helps you retire sooner, helps pay your expenses in retirement, etc. And wouldn't it be nice to have something to leave to someone? Even if you don't end up having a family, wouldn't you want to be able to leave something to a close friend, or a charity, or other family members?

[orangemacapple]

you can probably give a paid-for house to a charity with the stipulation that you have lifetime rights. they'll gladly pay the taxes for you, so all you'll have will be your utilities and any upkeep you feel like doing. they don't take actual possession of the house until you're dead (of course they may take out a contract killing on you).

you can travel if you want and always have a place to come home to. out in the country, if you want to build a shop for your hobbies or a barn for your pets, you won't find resistance.

and a goat is better than a dog.

[Kwyjibo]

Theres an old saying that most people in real estate use

and it goes something like ... renting is a ripooff unless its from me.

Either you're paying someone else's mortgage or you're paying your own. It depends on how much you like your area and how much interest you have in upkeep but I plan on buying a house over the next few years even if I'm still single because I feel like I'm sort of ripping myself off. Thats just me, I hope to have a few properties i'm renting out eventually ... so I can collect rent.

[MacNut]

You can also buy a fixer upper, Buy the house cheap work on the house then turn around a few years later and sell it for a profit.

[swiftaw]

You can also buy a fixer upper, Buy the house cheap work on the house then turn around a few years later and sell it for a profit.

As long as you keep it for more than 2 years so you don't get hit with Capital Gains

[YS2003]

You can also buy a fixer upper, Buy the house cheap work on the house then turn around a few years later and sell it for a profit.
Is it from "Rich Dad Poor Dad" by Robert Kiosaki? I am not into to flipping properties. That is too risky. Look at Donald Trump (I know; this is a bad example. But I thought it would be a good extreme example). He is trying to make money by doing a TV show because he is not making money on his main jobs in the real estate.

[aristobrat]

I'm not sure how rural you're talking about when you mention rural, but if it's like the rural area my parents live in, the cheaper property taxes come with less services. Stuff like no city sewer (you deal with your own septic tank) and no curbside garbage pickup (you have to drive it to a central dumpster area yourself).

As for flipping a house being risky, not always. You're not trying to flip a house in 3 weeks for a quick profit. You're buying a trashed-out house in a good area for less money that other houses (because its trashed out), fixing it up over the two or three years that you live there, then selling it for a profit.

[Kwyjibo]

Look at Donald Trump (I know; this is a bad example. But I thought it would be a good extreme example). He is trying to make money by doing a TV show because he is not making money on his main jobs in the real estate.


I think thats a real extreme and sort of dumb example. I would guess that trump makes more on his real estate annually than the TOTAL of active macrumors members.

The TV show is to make him famous again and to hone is brand image. I think he's obviously making some sweet cash from it but its not his main source of income.

[MultiM]

If you don't want a house and all that goes with, then buy an apartment condo. Your own space and it will only accrue greater value, especially in an urban setting. You don't have to have a lawn and gardens. You can have a balcony and still get equity.

[Sdashiki]

Flipping a house is the only way to be able to afford one, if you is poor like me!


For example, buy a house in a neighborhood of $200k houses, its a fixer upper so you get it for $150k.

Live in it, fix it up over a few months, years or whatever, and sell it.

Most likely in the time youve spent, the land and neighborhood have appreciated in value AND you fixed up the house increasing its value.

Granted, I dont know jack about capital gains on this kind of thing, but a possible $50-75k in profit aint bad.

Personally, I like working with my hands (har har) so a fixer upper is definitely my choice.


Though, the problem always is:

buy a 3/2 house for $100k, 10yrs later its worth $300k, but so are every other 3/2 house in your neighborhood and the surrounding towns/cities.

So you really didnt make $200k, you made nothing. Because to buy a similar 3/2 house, youd spend a similar amount to what you got for your house.

You have to move to truly make money in the real estate market, yes a house's equity going up is a nice thing, but when you sell it to get another house (u gotta live somewhere), the same size house is the same price as what you just got. You either have to find a smaller place, or move somewhere where the housing market isnt as high.

Buying and Selling real estate, without it as your main home, is a great way to invest and make money, IF you know what you are doing.

[pilotError]

Use it to fund your retirement.

Even if your not going to will it, you can build up Retirement Equity in it.

You can even reverse Mortgage it later in life to fund whatever down the road.

I leaves you options instead of paying someone else's mortgage.

[MarkCollette]

I'm a single guy in my late 20s, so we're in a vaguely similar situation. Personally, I own a condo, and would never want the hassle of a house, while I'm still single. I got a place that's not too large for one person, and ok for two people, which helped when I had a girl friend live with me a while back, and later on had a room mate.

I think the main reason to buy a home, is so that you've got some paid-off residence to live in when you're retired. Yes, there's always property taxes and utilities, but I can guarrantee you that rent will always be as much, or more than, those costs.

Also, while I plan on never using this, you might need to: a reverse mortgage. I plan on having a spouse and children who will care for me when I'm old and dying. But if you think that going it alone is better, than you will need access to a lot of capital in your last years. Depending on how well your investments go, it might be a necessity to use a reverse mortgage, which you will not have available if you rent your whole life.

Edit: Oh, I guess pilotError beat me to it.

[ThomasJefferson]

Yes.
Buy one and fix it up.
Move out and rent it, buy a larger one, fix it up ... etc etc
It worked for my parents and it is working for me as a way to increase wealth and have a secure retirement in the future.

[CorvusCamenarum]

Money today > money tomorrow. You can thank inflation for that. If you're already living on your own, then you're just throwing extra money down the drain by renting, as a mortgage (and everything that goes with it) it almost always cheaper then renting. With renting, you're paying the mortgage, taxes et al already, plus some profit for the landlord for going to the trouble to rent in the first place, and unlike buying, you don't have anything to show for the extra money you're spending at the end of the day/month.

[JBazz]

you're only as far from civilization as your computer. and no matter where you go in this country, there's always a walmart within 1/2 hour. ups delivers anyplace there's an address in the u.s.
ok, i have to drive 1/2 hour to raleigh and then another 30 minutes to get to some cultural events there within the city limits. not really so bad. i got a couple chickens in my backyard and a goat. and a cat.

I am seriously not tryin to be ugly, but if you base your quality of life as being within 1/2 an hour of a Walmart....oh lawd! I got nothing to say.

On a more serious note. Home ownership will allow you to write off your property taxes. Depending on your income, you are either going to pay federal income tax or state property tax. Go for the house. Or a townhome if you dont want the yard upkeep.

I bought my first home when I was 22 for under 40K. I just sold it for 175K last year. I lived in it only 3 years and the rest of the time it was a rental house. Excellent tax write off, excellent income production, all round good investment.

[JBazz]

as a mortgage (and everything that goes with it) it almost always cheaper then renting.

This doesnt hold true for even half the country. If you live in a rural or small city, yes it is true. But try to own in a larger city, the North East, California, Washington, etc and you cant touch the price of buying v renting.

[m-dogg]

I would recommend buying a condo. You generally won't have to worry about any external maintenance so it's less work overall (good if you're single - More time to have fun), but you can still build equity over time.

[aristobrat]

This doesnt hold true for even half the country. If you live in a rural or small city, yes it is true. But try to own in a larger city, the North East, California, Washington, etc and you cant touch the price of buying v renting.
Actually, I think what you're saying is true, but only in and immediately around most large metro areas. I'm not sure that's anywhere near to being 1/2 the country though. :confused:

[MarkCollette]

I am seriously not tryin to be ugly, but if you base your quality of life as being within 1/2 an hour of a Walmart....oh lawd! I got nothing to say.

Haha.. I think it was more a statement of proximity to civilisation, than a direct quality of life indicator.

[JBazz]

Actually, I think what you're saying is true, but only in and immediately around most large metro areas. I'm not sure that's anywhere near to being 1/2 the country though. :confused:
Depends if you are speaking of population or area. Population wise, most people live within the major metropolitan areas that make ownership much more difficult.

I wasnt trying to be argumentative. I have lived in California, Texas, Oklahoma, Florida, New York, and Illinois. Home ownership is different in each area. Here in Tx, the property taxes are as high as some places in the NE, I pay $16K a year. The gentleman I quoted lived in Alabama. Quite a different story.

[Queso]

Buy a boat to live on. That way you have an asset, but if you get fed up with where you are you can always up sticks and move on. You do have to worry about the mooring fees and service charges, but it does give you plenty of freedom.

[yellow]

The interest you pay in your mortgage becomes a write off on your taxes. ;)

[Kwyjibo]

Money today > money tomorrow. You can thank inflation for that.

actually you can thank the time value of money ...

a reverse mortgage is a horrible move and desperation type thing

[louiek]

Hang on a second. Do you (Americans) get to write your interest repayments off your tax? We can do that for a property you rent out, but not for your primary residence. Wow, I'd be able to eat every day if we could do that.

[Sun Baked]

Depending on how much money you make, you might not mind flushing away thousands a month on rent to build somebody else's nest egg.

[BoyBach]

...owning a house/property is a must to build your net worth.

If you want to increase your net worth via real estate, i.e., buying at one price, selling at a higher price in the future...


Remember that house prices can go down as well as up.

Bricks and mortar are not a guaranteed 'investment'.

[floriflee]

Remember that house prices can go down as well as up.

Bricks and mortar are not a guaranteed 'investment'.

Obviously, you want to be careful about where and what you buy. However, on average I have yet to see the value of a house go down and stay down as long as the owner keeps it up and works to keep the neighborhood nice. If he stays in the house for 30 years, there's a possibility that it may not go up as much as he'd hoped, but inflation and other factors will still make it worth more then than it was when he bought it.

One thing to consider is that the equity in a house can also be used towards retirement (perhaps this was mentioned in one of the later posts that I didn't read). Therefore, even if you don't have anyone to give the property to upon your death (although, who says a property has to go to family upon death?), it still makes sense to own it because the equity may come in handy for things like long-term care or other costs that arise after you retire.

[BoyBach]

Obviously, you want to be careful about where and what you buy. However, on average I have yet to see the value of a house go down and stay down as long as the owner keeps it up and works to keep the neighborhood nice. If he stays in the house for 30 years, there's a possibility that it may not go up as much as he'd hoped, but inflation and other factors will still make it worth more then than it was when he bought it.


That's all well and good, but what about unemployment/ill-health, negative-equity, recessions, bankruptcy and soon?

Remember that people were adamant that the Titanic was unsinkable.

A house, like the stock market, doesn't a guarantee a future return on your investment.

[CorvusCamenarum]

Depends if you are speaking of population or area. Population wise, most people live within the major metropolitan areas that make ownership much more difficult.

I wasnt trying to be argumentative. I have lived in California, Texas, Oklahoma, Florida, New York, and Illinois. Home ownership is different in each area. Here in Tx, the property taxes are as high as some places in the NE, I pay $16K a year. The gentleman I quoted lived in Alabama. Quite a different story.

Point taken. Property taxes here are among the lowest in the country, but we also have one of the highest sales taxes to "compensate" (9% here). But it still stands to reason that on a [newer/not yet paid off] home, buying is cheaper. The landlord has to make a profit over and above what he's paying on the house; I doubt there are many out there who just rent out a house at cost or less out of the goodness of their hearts.

[MarkCollette]

actually you can take the time value of money ...

a reverse mortgage is a horrible move and desperation type thing

I agree. But if you're in a horribly desperate financial situation, you might be glad to do it :)

[aristobrat]

That's all well and good, but what about unemployment/ill-health, negative-equity, recessions, bankruptcy and soon?

Remember that people were adamant that the Titanic was unsinkable.

A house, like the stock market, doesn't a guarantee a future return on your investment.
Well, right, ... nothing in life is guaranteed, other than death, right?

FWIW, attached are two pages from the Office of Federal Housing Enterprise Oversight (who knew we had one of them) showing the House Price Index.

Since 1980, the state with the least appreciation is Oklahoma, where houses only appreciated 99%. Looking at the other states, I'd guess that the average appreciation (since '80) is around 300%. I'm pretty sure that time period factors in some recessions, etc.

But like you said, nothing's guaranteed. A major terrorist attack around here would probably send the entire economy into the toilet (including property values), but in a situation like that, it's not like if you had your money invested anywhere else that it'd do much better.

[MarkCollette]

Well, right, ... nothing in life is guaranteed, other than death, right?

FWIW, attached are two pages from the Office of Federal Housing Enterprise Oversight (who knew we had one of them) showing the House Price Index.

Ahh, but are these figures adjusted for inflation? Because doubling or even tripling an investment in 27 years is not that much of an accomplishment, and might even be a regression in real terms.

Using an online inflation calculator (http://www.westegg.com/inflation/), we get:

What cost $100 in 1980 would cost $253.97 in 2005.

So, something would have to be worth around 2.5X it's 1980 value, in 2005, to be breaking even in real terms. Sorry, the calculator wouldn't give me values for 2006, which would have better matched your figures.

Basically, what I'm getting at is that in many cases home ownership is worthwhile, but when there's a large enough difference between the cost to rent and own, then you might as well rent, and save and invest the difference.

[BoyBach]

If you're happy in your life (job, family, friends, location, etc) then, if you can, I would say buy a house. Definitely.

If you're not happy then what's wrong with renting? After all, this allows you to 'move around' until you a place/time where/when you want settle down to and make a home.

[pilotError]

Buy the house...

If you decide you want to live somewhere else, rent it out and move somewhere else. Let them pay for your Mortgage.

I don't see much downside to being a home owner. It's more work (ie. lawn upkeep, repairs, etc), but your building up equity over the long run. That $1500/month is essentially going back to you in the long run.

[yellow]

Hang on a second. Do you (Americans) get to write your interest repayments off your tax?

The interest one pays on one's mortgage becomes a write off on taxes.

[floriflee]

Well, right, ... nothing in life is guaranteed, other than death, right?

Don't forget the taxes.... :p :D

Buying property is obviously something not to be taken likely. If you plan on settling in for a while and have done your research about the various areas to know which ones are good in terms of safety, development, infrastructure, etc, then buying is not a bad option for a single person. It all depends on lifestyle, priorities, and means. If you were to buy, I certainly wouldn't recommend buying something that is at the highest end of your affordability range--you want to be able to have a little room to grow and cover unexpected expenses. If the worst case scenario happens (heaven forbid) then at least the loss isn't as great as it could have been.

[CEAbiscuit]

Ahh, but are these figures adjusted for inflation? Because doubling or even tripling an investment in 27 years is not that much of an accomplishment, and might even be a regression in real terms.

Using an online inflation calculator (http://www.westegg.com/inflation/), we get:

What cost $100 in 1980 would cost $253.97 in 2005.

So, something would have to be worth around 2.5X it's 1980 value, in 2005, to be breaking even in real terms. Sorry, the calculator wouldn't give me values for 2006, which would have better matched your figures.

Basically, what I'm getting at is that in many cases home ownership is worthwhile, but when there's a large enough difference between the cost to rent and own, then you might as well rent, and save and invest the difference.


My home is worth 2x it's value in 4 years when I sold it. Better return than inflation.

Bottom line is, above even saving, home ownership should be the nnumber one prioirty (other than no credit card debt) over all other savings for any American. (not sure overseas) based on historical rate of return, tax benefits (interest payments are deductable) and general savings/investment habits of the typical American.

The individual saving rate in Japan is 30% per year. In the US it's -.5%. The average American loses money each year. A home with a decent mortage ( not a 1 year ARM) gives an individaual the ability to build equity that they can pull out at a later date via sale or refinance.

If you see a property you like, especially if you are going to be in an area for 2 or more years ( there's a 2-5 captial gains rule I'm not gonna get into here) buy as soon as possible.

[CEAbiscuit]

Hang on a second. Do you (Americans) get to write your interest repayments off your tax? We can do that for a property you rent out, but not for your primary residence. Wow, I'd be able to eat every day if we could do that.

Yes we can. Maybe that's why we're all overweight:eek:

[redmeister]

yea of course buy one as long as you can *afford* everything that comes along with it

buy appreciating assets, lease or rent depreciating assets. simple as that

depends on your particular region housing market but i would recommend against condos and would recommend townhomes or buying out an entire duplex and then renting the other half to someone.