To rent is good, to own is divine.
I've done both - I hate renting. I hate that someone can tell me how many of my relatives can stay for a weekend. I hate that someone can tell me if I can smoke in my own house. I hate that someone can force me to have their company. I hate that my money just pays someone else mortgage, instead of my own.
But, I'm really glad there are people who like to rent - who prefer to rent. Because then I can make money from them and they can pay my bills.
When the mortgage is all paid up, I can make them leave, even if they have been there for 20 years and never missed a payment.
That sounds bad - I don't mean it to be. I would not want to have a mortgage. We have 3 places, and we don't owe a penny on any of them.
Though, I would not live in a place like where my daughter does. Her taxes are more than I made the last year I worked. (New Jersey) Now, I just like to buy and sell real estate - and bring buyers and sellers together for other brokers and on a private basis. We concentrate on places that have a fairly low cost of living (comparatively), try to get homes that are underpriced so that banks make back some of their money, and a buyer gets a great price for a home that doesn't put them in financial straights for 20 years. This leaves me lots of time to do what I want to do - which is treasure hunt and photography.
It drives me bonkers when people tell me - oh, I have no debt - just my house - duh! Like a mortgage isn't debt. The last 20 years people have been telling the average person that real estate is an investment. It definitely can be - but not if it costs you more than you can afford. Just once, I wish someone would add up what they actually pay for a home they have a mortgage on.
A 100,000 home - at a good interest rate - say 5.5%, for 30 years, gives you a payment (without taxes and insurance) of about $567.69.
So, how much are you paying for that $100,000 house? $204,368.40. That's more than twice what you thought you were paying for it.
Better you should put money aside for 15 years, and buy a $100,000 CASH. (and, with a cash offer, you can get a bank to sell a foreclosure at a little over half (about 55%) of what's owed on it - that's one of those little known real estate secrets that they talk about on the commercials.
The banks don't lose a dime, either, because they get to write off every single penny from the ORIGINAL loan - not the balance due that they didn't get - one of those wonderful tax breaks that banks get. And, yes - I know this as fact, as I've done it no less than 14 times. (might be 15, but I cannot quite remember).
Here is another little known fact - the majority of mortgage companies that take your insurance and taxes into an escrow account, and pay them for you? They charge you interest on that money. They don't all, but alot of them do. So, if your taxes are $1000 - you are actually paying
$1030.08, for your taxes. (and worse yet, most time, they put the first year as part of the mortgage, so, the first year you actually pay for 2 years of taxes) - AND - they use your money while you aren't - so they get your interest, and whatever interest they get from lending that money out.
Its can be a racket, that's for sure. You have to read all that small print.
Beth
