By What Age Should Someone Own/Have Bought a House?
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This is something I wonder about myself. I am 33 and still live at home. I am okay with that for now but I do want my own place someday. I know a lot of families are living in 3 generational homes. Where the grandparents are in one bedroom, the parents in another and then the kids (sometimes even with their spouse and kids) in the third or fourth bedrooms. People just can't afford to move out right now. It is common to see four to six cars parked in the same house because of this.
I wish single people had more affordable options. I don't mind a 1 or 2 bedroom house for myself. I prefer a smaller space anyways. Bigger houses cost more to cool down esp here in Texas.
I remember being a kid and wanting a two story house with a pool in the backyard. I imagined I would be married by now with three kids maybe even four! I imagined I would be able to take them to Disney World and we would have fun pool parties with their friends from school.
LOL How times have changed! I don't think I could afford any children now.
It makes me wonder how this is affecting society and our personal psyche. To imagine a bright future only for it to be unattainable, it's hard. The future looks dark, scary, and lonely.
I wish single people had more affordable options. I don't mind a 1 or 2 bedroom house for myself. I prefer a smaller space anyways. Bigger houses cost more to cool down esp here in Texas.
I remember being a kid and wanting a two story house with a pool in the backyard. I imagined I would be married by now with three kids maybe even four! I imagined I would be able to take them to Disney World and we would have fun pool parties with their friends from school.
LOL How times have changed! I don't think I could afford any children now.
It makes me wonder how this is affecting society and our personal psyche. To imagine a bright future only for it to be unattainable, it's hard. The future looks dark, scary, and lonely.
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Don't give up so easy. All you want and imagine and more are possible with God. And whatever the world may appear at times, you dwell in the shelter of the Most High.
Start with Luke 18:1 and Psalm 23. And work your way through the Bible and taste and see that the Lord He is good.
There is nothing to fear. Only a life full of blessings waiting. Pursue God with all your heart and you will be too excited about all you find to worry about anything else.
Start with Luke 18:1 and Psalm 23. And work your way through the Bible and taste and see that the Lord He is good.
There is nothing to fear. Only a life full of blessings waiting. Pursue God with all your heart and you will be too excited about all you find to worry about anything else.
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Nowadays more people are buying their first and/or long-term homes later. It is not ideal (for those who want homes) but it is the reality. I read that making an extra payment per year reduces the number of years of the mortgage. The way I see it, if I am able to retire earlier like in my 60s, I should be able to pay off my mortgage. I would definitely want to pay off mortgage and large debt before I retire. I would also have to evaluate my finances at time. If I am more strapped for cash, I would definitely want a house at that age. However, if I make enough monthly for the rest of my life and able to afford rent without worry, I might just rent at a 55+ community or so. These plans may change depending on my future potential partner.
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I've seen a strategy like this work, with a coworker starting with a one-bedroom condo in a shady/bad downtown neighborhood, a couple of other homes in between, to a standalone house in a somewhat decent neighborhood which will no doubt gentrify in the coming decades. She basically started from nothing and now she has one standalone home plus renting out a condo. However, a lot of people are not willing to follow this route including me of living in a bad neighborhood just to own a home.
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Nowadays rentals using special algorithms, which was probably not yet developed in the 1980s or maybe not even around 2000, to determine rental prices. They probably use some formula to get the maximum rent possible. I've always found it odd that the renewal rates are quite a bit higher when compared to new leases for the same apartment type. There is also supply and demand, with homes getting more expensive, and more people turning to rentals.
If you work in a city/urban area, options are limited. There is a sharper divide between good and bad neighborhoods. The immediate suburbs surrounding the city can be expensive for the good neighborhoods, farther out it is cheaper but one has to factor in traffic/commute time. If you work in the suburbs or outside the city, there are more options.
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I appreciate everyone's input regarding both the pros and cons of owning rentals.
After watching my relatives run rentals and deal with a lot of cons, I know that it wouldn't be for me. For example, I wrote in a previous post about a family member who recently came home from vacation to a tenant's phone call about a fence that was blown over during a storm. It turns out that the fence was never originally set right when it was built, so he had to remove all the remnants of the old fence, buy all the supplies, pour the concrete, set the posts, and rebuild a new fence at his own cost and labor.
As a single woman with no such handyman skills, I would have had to worry about finding a licensed, trustworthy professional to handle the repairs and then shell out for the expense.
I have no interest in owning physical real estate or anything to rent out, but I do invest in REIT's (real estate investment trusts) as an alternative. These companies own and/or finance real estate, sell shares of their companies on common stock exchanges, and are required by law to pay a dividend (payment) of at least 90% of their taxable income to its shareholders.
For example, Arbor Realty Trust (ticker symbol ABR) is currently $12.99 per share and will pay out an estimated $1.60 per share per year, which is currently over a 12% annual return on your money (divided and paid out in quarterly increments.) Another great thing is that ABR has also been slowly increasing its dividend over time.
Now $1.60 doesn't sound like much, but if you took some of the money that you might have otherwise used on a rental and, over time, built up to 1000 shares (the share price will fluctuate like shares of a regular stock -- let's just say your total average cost was $15,000, which is likely a drop in the bucket compared to the cost of buying your own rental property,) and you would now be paid approximately $1,600 a year (about $133 per month) in passive income, just for owning those shares. If you didn't need the income right away, you could reinvest your dividends, along with the money you would have paid out on rental property taxes and maintenance, buying more and more shares, which increase your payout over time. And all without having to worry about finding tenants or dealing with clogged toilets, damage to your property, or the stress of having to pay off an extra mortgage when you can't find tenants or the need to evict ones who refuse to pay.
It certainly isn't full-proof, as every investment has to be chosen carefully (several REIT's are being hit hard with the skyrocketing housing costs,) is never guaranteed (the share prices could drop drastically; the REIT could go out of business and you could lose your money; the dividend could be cut,) but for me, the problems with a REIT dwarf all the issues I would have with an actual property (and there aren't any places around here that I could buy by myself.) I also never know how long I'll be in any given area (due to family member's health,) so committing to properties isn't realistic for my current situation.
As someone who knows she could never handle the stress of actually being a landlord, I personally like REIT's as a way to benefit from real estate, but without having to manage all the most challenging aspects of it by myself.
After watching my relatives run rentals and deal with a lot of cons, I know that it wouldn't be for me. For example, I wrote in a previous post about a family member who recently came home from vacation to a tenant's phone call about a fence that was blown over during a storm. It turns out that the fence was never originally set right when it was built, so he had to remove all the remnants of the old fence, buy all the supplies, pour the concrete, set the posts, and rebuild a new fence at his own cost and labor.
As a single woman with no such handyman skills, I would have had to worry about finding a licensed, trustworthy professional to handle the repairs and then shell out for the expense.
I have no interest in owning physical real estate or anything to rent out, but I do invest in REIT's (real estate investment trusts) as an alternative. These companies own and/or finance real estate, sell shares of their companies on common stock exchanges, and are required by law to pay a dividend (payment) of at least 90% of their taxable income to its shareholders.
For example, Arbor Realty Trust (ticker symbol ABR) is currently $12.99 per share and will pay out an estimated $1.60 per share per year, which is currently over a 12% annual return on your money (divided and paid out in quarterly increments.) Another great thing is that ABR has also been slowly increasing its dividend over time.
Now $1.60 doesn't sound like much, but if you took some of the money that you might have otherwise used on a rental and, over time, built up to 1000 shares (the share price will fluctuate like shares of a regular stock -- let's just say your total average cost was $15,000, which is likely a drop in the bucket compared to the cost of buying your own rental property,) and you would now be paid approximately $1,600 a year (about $133 per month) in passive income, just for owning those shares. If you didn't need the income right away, you could reinvest your dividends, along with the money you would have paid out on rental property taxes and maintenance, buying more and more shares, which increase your payout over time. And all without having to worry about finding tenants or dealing with clogged toilets, damage to your property, or the stress of having to pay off an extra mortgage when you can't find tenants or the need to evict ones who refuse to pay.
It certainly isn't full-proof, as every investment has to be chosen carefully (several REIT's are being hit hard with the skyrocketing housing costs,) is never guaranteed (the share prices could drop drastically; the REIT could go out of business and you could lose your money; the dividend could be cut,) but for me, the problems with a REIT dwarf all the issues I would have with an actual property (and there aren't any places around here that I could buy by myself.) I also never know how long I'll be in any given area (due to family member's health,) so committing to properties isn't realistic for my current situation.
As someone who knows she could never handle the stress of actually being a landlord, I personally like REIT's as a way to benefit from real estate, but without having to manage all the most challenging aspects of it by myself.
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I dont think theres any expectation in nz to own a house anymore, that was more of a baby boomer thing.
I think if you can afford it, it is better in the long run, but only if you can afford it. Most people pool their money together to own one, its really not feasible for a single person to do it. However then that means whos name is on the title and who is responsible for it, hence family trusts.
There are pros and cons to owning your own home, though some people defintiely do treat real estate like a game of monopoly. Its unethical, but people do it because they can.
I think if you can afford it, it is better in the long run, but only if you can afford it. Most people pool their money together to own one, its really not feasible for a single person to do it. However then that means whos name is on the title and who is responsible for it, hence family trusts.
There are pros and cons to owning your own home, though some people defintiely do treat real estate like a game of monopoly. Its unethical, but people do it because they can.
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I've always liked REITs....and dividend paying stocks are really going up right now. REITs usually pay quarterly dividends instead of monthly though.
And REITs are a buffered exposure to real estate gains. Some people don't like them as naked real estate exposure has seen gains of 20-50% the past couple of years.
But the naked exposure also comes with a job. One I don't want and as you have said have no skills to perform. Which you actually could do with a financial partner who wants some sweat equity in the deal. If the partner has those skills but not a lot of money...that is what you would want if coming across a "too good to be true" scenario.
Which is what my wife and I have done with our home. When I finish restoring the house it will be worth double to triple what we paid for it. (Plus any market increases)
That's not exactly a bad return....but the partner has to be solid and perform as promised. (I'm looking a tad shady to myself here....after all been here almost a whole month and the landscaping isn't completed yet).
But things like retirement centers and assisted living centers are fairly good REITs to get into so long as the price isn't at a premium. (Lower dividends)
And REITs are a buffered exposure to real estate gains. Some people don't like them as naked real estate exposure has seen gains of 20-50% the past couple of years.
But the naked exposure also comes with a job. One I don't want and as you have said have no skills to perform. Which you actually could do with a financial partner who wants some sweat equity in the deal. If the partner has those skills but not a lot of money...that is what you would want if coming across a "too good to be true" scenario.
Which is what my wife and I have done with our home. When I finish restoring the house it will be worth double to triple what we paid for it. (Plus any market increases)
That's not exactly a bad return....but the partner has to be solid and perform as promised. (I'm looking a tad shady to myself here....after all been here almost a whole month and the landscaping isn't completed yet).
But things like retirement centers and assisted living centers are fairly good REITs to get into so long as the price isn't at a premium. (Lower dividends)
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There is one home owner's trap that I've seen many fall into. And that's the 'Refinancing Trap', refinancing your residence/home over and over instead of paying it off. I've seen it happen so many times. Here is a real life example of one of my neighbors:
This man refinances his residence every two or three years. He bought his residence, a 2 bedroom condo, in 1983. The price was $38,000. Today, this home lists for $350,000. He has lived in this residence for the last 36 years. And, because of his continual refinancing, he now owes $42,000. And he's retired now and needs money so he plans to continue refinancing in to the future. I see this happen so many times.
It would have been so much better if he'd never refinanced and paid off the mortgage. Instead, he's become an 'eternal renter'. Too many home owners fall in to this trap.
This man refinances his residence every two or three years. He bought his residence, a 2 bedroom condo, in 1983. The price was $38,000. Today, this home lists for $350,000. He has lived in this residence for the last 36 years. And, because of his continual refinancing, he now owes $42,000. And he's retired now and needs money so he plans to continue refinancing in to the future. I see this happen so many times.
It would have been so much better if he'd never refinanced and paid off the mortgage. Instead, he's become an 'eternal renter'. Too many home owners fall in to this trap.
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Another 'home owner's trap' is the reverse mortgage. You see Tom Selleck advertising it on TV all the time. The biggest advantage to the reverse mortgage is that it does allow the home owner to stay in their house until they die or sell the house.
But, you never hear about the disadvantages of the reverse mortgage. Firstly, the reverse mortgage is just a fancy name for a loan. Secondly, most reverse mortgages have a high interest rate and compound monthly. Thirdly, when the resident dies or sells, the loan payment comes due. Fourthly, one's home is usually the bulk of their estate, but the heirs won't get it as the reverse mortgage company legally owns most or not all of the home. Fifthly, if the home owner is forced to leave the home and go to an asssisted living or nursing center, the reverse mortgage company can demand payment of the loan. And finally, most loans go down as they are paid off, but the reverse mortgage loan keeps growing.
In fact, the reverse mortgage can be pretty ugly. 6 Reverse Mortgage Disadvantages & How to Avoid Them | ReverseMortgageReviews.org
But, you never hear about the disadvantages of the reverse mortgage. Firstly, the reverse mortgage is just a fancy name for a loan. Secondly, most reverse mortgages have a high interest rate and compound monthly. Thirdly, when the resident dies or sells, the loan payment comes due. Fourthly, one's home is usually the bulk of their estate, but the heirs won't get it as the reverse mortgage company legally owns most or not all of the home. Fifthly, if the home owner is forced to leave the home and go to an asssisted living or nursing center, the reverse mortgage company can demand payment of the loan. And finally, most loans go down as they are paid off, but the reverse mortgage loan keeps growing.
In fact, the reverse mortgage can be pretty ugly. 6 Reverse Mortgage Disadvantages & How to Avoid Them | ReverseMortgageReviews.org
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the other question about gender, is probably a throwback to the last century when women werent allowed or couldnt own property becasue banks wouldnt lend them any money, as it was assumed they did not work or were married (to a man who earned or was bread winner)
But because of suffrage and two world wars etc that is no longer the case. Banks will now lend to anyone who can prove they have a steady income.
The other thing is lotto winners arent divided by gender lol
But because of suffrage and two world wars etc that is no longer the case. Banks will now lend to anyone who can prove they have a steady income.
The other thing is lotto winners arent divided by gender lol
I would say a having home is more imprtant to a woman than a man though in the olden days a man had that as his asset to offer a woman and the woman had her body to give him children. So they swapped.
That was the transaction. So their children wouldnt have to move every year and change schools when the rents increased. There is something to be said for the suburban lifestyle however the commute and cars can be quite bad.
I think nzers didnt quite achieve this 'american dream' cos with a house you also needed a car since your home was so far away from work and in those days they zoned it so you could not operate a cottage industry from your own home lol
The houses were mostly empty shells with no community facilities on crummy land that couldnt grow anything decent but people spent all their weekends trying to tart them up and mow the lawns. However back in the 60s with state houses at least they were good quality.
In the 90s I dont know what happened to building contractors a whole lot of leaky homes were built so if you did buy one you were faced with it collapsing in five years time lol with rot and mould cos the rain would get in!
That was the transaction. So their children wouldnt have to move every year and change schools when the rents increased. There is something to be said for the suburban lifestyle however the commute and cars can be quite bad.
I think nzers didnt quite achieve this 'american dream' cos with a house you also needed a car since your home was so far away from work and in those days they zoned it so you could not operate a cottage industry from your own home lol
The houses were mostly empty shells with no community facilities on crummy land that couldnt grow anything decent but people spent all their weekends trying to tart them up and mow the lawns. However back in the 60s with state houses at least they were good quality.
In the 90s I dont know what happened to building contractors a whole lot of leaky homes were built so if you did buy one you were faced with it collapsing in five years time lol with rot and mould cos the rain would get in!
In nZ we dont even have enough homes for people to start with and they are very expensive only foreigners can afford to buy one (they just sell their old one) and they are now auctioned off. You can buy a second hand home and demolish it and put up a block of flats and earn more money in rent being a slumlord.
The land allocated for homes is a bit random, its only when someone with a farm that decides to sell up to a developer who can put houses on it. But then that farm or arable land is lost. Not sure what the answer is, people seem to think everyone will be happy living crammed in apartment block towers. But then children cant run outside to play, they need to slide down ten flights of stairs or suffocate in the lift.
The land allocated for homes is a bit random, its only when someone with a farm that decides to sell up to a developer who can put houses on it. But then that farm or arable land is lost. Not sure what the answer is, people seem to think everyone will be happy living crammed in apartment block towers. But then children cant run outside to play, they need to slide down ten flights of stairs or suffocate in the lift.
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