153 thoughts on “7 Reasons Why Buying A House Is A Terrible Idea”

1. “Houses Get Filled With Useless Stuff,” including a woman.

   1. I will be a perpetual Feminist, a true Forever Feminist ,thats why my name of Eternal, no matter what you say, i will stand my principles loyally : )

      1. Shut up and make me a sandwich

      2. This is no different than watching miley cyrus dance at the vma.

      3. translation : i will be perpetually stupid and cling to a herd mentality and no one will ever be able to break down my wall of insecurities – my goal is to shame, guilt and bully anyone who doesn’t see my way into bending to my idealistic social vision and i will gang together with anyone who approximately shares my vision, even though when push comes to shove they are also completely mired in the same insecurities and care so little about me they wouldn’t even stop to step over my dead body.
         i will do my best to tear down anyone who i see thinks differently to me, regardless of their skill, talent or natural beauty.

         1. And don’t forget, “I will quickly abandon any and all of my feminists ‘principles’ if or when it should benefit me even in the slightest. I will also abandon feminism if I meet a hot guy.”

         2. Bwahahahah! You UK cars are some sharp minds. All that rain makes you stay in and develop your minds. Other guys are right-ignore their hamster wheel verbose slants. Back to the kitchen Skirt!

         3. wow you got trolled really easy, beta.

         4. http://en.wikipedia.org/wiki/List_of_burn_centers_in_the_United_States

         5. Oh man – don’t feed the trolls.

      4. Good for you. Now fuck off.

      5. Don’t skimp on the butter and don’t cut the crusts off.
         How is your run for senator going?

      6. LOL whut?

      7. definition of insanity: doing the same thing over and over and expecting different results

   2. nah you need the woman to keep it clean, and suck you off in the shower… just have to train her right…

      1. Necessary evil, unless you are a certified gay faggot

   3. Your comment was somewhat redundant…lol…women are useless…except when you’re fucking them…

2. Agree with some points. It sucks to be stuck in one location – but I can always travel, or relocate and rent out my house.
   You can end up buying lots of junk. But many times you buy the junk at garage sales for pennies or get it for free from people that have lost their homes or are downsizing and giving it away.
   If you are lucky you might find a good value. I dont know if plugging hard earned cash into a 401K (in a market pumped for the last 6 years with fiat money and yen carry trade speculation) is any better an investment than owning your own real estate.
   Rent is expensive. It goes up every year. Landlords can be annoying. Neighbors in an apartment complex can be worse.
   Its not easy owning your own home.
   But my god…its heaven when you walk in the door.
   Every King should have a castle.

   1. Totally agree here. The average rent in most cities can be 1000-1400 for a decent 3br 2ba home. In the stick somewhere you might get under $1000, but it won’t be much less than that.
      Think about the kind of home you’d have if you have a $1000.00 mortgage. That’s probably a 200-350k home. Why does anyone need a home that expensive. You don’t. If you can afford it great. But I’d rather have a $400 mortgage on a property where I can make principal payments along side the mortgage and own the thing outright faster. Or even better yet, find a property for 50-60k and plunk down the salary you saved for a few years. Get a loan from parents or a family member, or borrow cash from a rich uncle. Beg, borrow or steal to own the land under you. Owning is the ticket to financial freedom. Rent is nothing more than a physical form of an enslaving credit card. You can be $60,000 in rent for a few years and at the end of it, they kick you out on your ass and you have nothing to show for it. $60,000 can buy you a manufactured home on land in some places of this country!! I know because that’s how much I paid for my house. Granted I took advantage of the housing dip, but deals are still out there. 120grand for the property up the street 1000sqft home with 8,000 sq foot pole barn on 1.25 acres-10minutes from town. No one can tell me there aren’t deals out there!! Just have to look.
      This guest is absolutely right, every king needs a castle. Not having to ask to fix or modify something is so nice and not having to start over at a new place is priceless!! I’ve fixed up so many peoples shitty little rentals to get them to how I liked to live only to move in a year or two and start all over. Get off the renting treadmill.

      1. Get off the renting treadmill…and get on the owning chain gain?
         No thanks.
         No, a MORTGAGE “is nothing more than a physical form of an enslaving credit card”.

         1. I am so confused about this. Do you think that land lords are altruistic? No. They charge you more for rent than it costs them to maintain and run the property.

   2. I am both a tenant and a landlord and being the former is much less stressful by far. Tenants are far more annoying than landlords, and my rented apartment neighbors are far easier to deal with than my homeowner HOA neighbors.
      The bottom line is that, adjusted for inflation, the average annual return on the stock market has been something like 4% since 1900; the average return on residential real estate over the same period has been essentially zero. This is because residential real estate is an investment in a static asset which creates no new value, whereas investment in the stock market is essentially an investment in the work of others who may (or may not) create new value. The housing market since 1980 has been one gigantic speculation bubble which has still come close to correcting to its pre-1980 levels. Even after the crash we are still at roughly 2003’s inflated values. Expect more correction, for this reason in addition to the excellent ones contained in this article, all of which I whole-heartedly endorse.

3. My only worry is an economic collapse and/or hyperinflation. Rent becomes unaffordable, and material wealth like land and houses become much more valuable for those who own them outright.
   Maybe this happens, maybe it does not. Otherwise this article is on the mark.

   1. You “own” your house right up until the local government decides to asset eminent domain. Not usually a worry, but your scenario above makes it a consideration.
      PS: don’t bother buying gold if you are going to keep it in a bank safe deposit box.

      1. “eminent domain”? Thats a pretty damn rare occurence here in the USA — unless you live near a highway that is going to expand or where they want to build a billion dollar office complex – and at any rate you will typically get fair market value and then some for your house. It just doesnt happen very often at all.

         1. He’s talking about a particularly exceptional scenario, as stated above.

      2. That’s true: “expropriation” is what it’s called up here in Her Majesty’s Demented Dominion. Rural areas, where community cohesion is high and local governments are familiar, are probably least likely to fall into that trap. The great fear then would be some kind of federal move, but a crisis of that magnitude could also result in revolutionary shifts of various divergent political flavours.
         Good advice on gold (or, ultimately, anything kept in banks) as well.

   2. totalitarian leftists are big fans of rent/price controls.

4. “Useless stuff” hits home for me. I’m in the process of moving out of my townhouse to move into a small apartment with much better logistics, and I keep procrastinating because I’m overwhelmed by what to do with all the stuff that’s accumulated. It will probably take me an hour a day for six months to sort it all out.

   1. Rent a miniskip. Fill it. Take to landfill. Empty it.
      Repeat as needed.
      Advertise stuff on craigslist, ebay, your local equivalent (gumtree here in Oz). Any cardboard boxes that have remained unopened since the last time you moved can be ditched without guilt unless they contain legal papers or the sole remaining photograph of your great-granddad.

5. If you’re a millionaire and can buy a house outright, or if the monthly payment is small change relative to your monthly income sure buy a house. But I see too many people owning houses they can ill afford, struggling to make the monthly payments, and getting married to a gold digger because the house is too big for them to live alone in. Next thing you know you’re a slave.

6. ” If a bank gave a $400,000 mortgage to a man in 2006 for a house and then foreclosed on it in early 2009 they can keep the house on the books as a $400,000 asset even if the house is now only worth $250,000.”
   I wonder what would happen if, due to recent events of fraud and the ensuing strengthening of regulations in accounting, it would be suddenly decided that these houses should be evaluated according to price market instead of historical price, to give a better image of financial statements. I bet banks would see a catastrophic decrease in their asset value.

   1. Its called “mark to market” and they changed the accounting rules for banks years ago so that the entire world financial system didnt collapse.

7. (1) Property taxes, repairs, insurance, etc. are included in your rent payment. That’s how landlords make money. They charge you more than their costs, pay the costs, and keep the profit.
   (2) Interest rates only matter to the extent that you borrow. Once you own it, there is no interest. Its an asset. And your housing costs are substantially reduced without a mortgage or rent payment.
   (3) Attraction of golddiggers, accumulation of useless crap, paying too much, etc. are are entirely unrelated to owning a house. Both easily avoided by sensible owners, and equally available to non-sensible renters.
   JB

   1. Your first premise is incorrect. Landlords aren’t guaranteed to make money! Many landlords lose money by renting out their house. On average, landlords make a slight profit, but there are ups and downs.
      Like any other business, there are upfront costs, some level of risk (house burning down, housing market crash, gangs move in to your neighborhood, etc.) and some level of insurance premium to mitigate risk. With rent, you pay more long-term, but in return the risks you face are lower and you can bail out any time you want. People make deals like this all the time in other businesses (for instance, a clothing chain may lease out its various stores) precisely for these reasons. So depending on the circumstances, either buying or renting may be preferable.
      But at the moment, housing prices are just absurdly high. Where I live, a 3-bedroom property in a reasonably good location would start from $1 million, and I’m not even in the USA. It’s just insane. It would take me a year of paying rent just to match the insurance cost of buying a new house.

      1. then it makes sense to rent! where I live in Pittsburgh PA I just closed on a two unit Flat (4 bedroom and 2 bedroom) for 152k. Its not in the ritziest area, but I can rent to 4 bed room for 1200 a month and the 2 bedroom for 800 a month, and my mortgage payment, taxes and insurance run me about 1300 a month. Seems like a pretty good deal to me. I am going to live in half and rent the other half out. Basically going to live for free. I do have the carry cost and I do bear the risk.. but rents have gone up 10% in Pittsburgh over the last year and I don’t want to pay someone else for the right to live in their house.

   2. (1) true, but this is true of absolutely everything you pay for. The guy selling you shoes makes the shoes for less than you pay. He’s taking a profit. But that doesn’t mean that you would be better off attempting to make your own shoes. Your time can be better spent on something you are good at. If you are skilled at navigating home ownership laws, financials, and maintenance, then by all means don’t just buy your own home – become a landlord!
      (2) Who pays off their home loan? A house costs more than an average person’s *lifetime* income. The prices are inflated beyond reason. You will *always* be paying interest, the equivalent of rent. The only reason to buy as an investment is if the asset price inflation exceeds the interest you are paying, and will continue to do so. (Minus the amount that you would be paying on rent, plus the amount that you could have made otherwise investing the money. Opportunity cost.)
      (3) Sure, it’s down to discipline. But discipline is a lot easier when you don’t have two garages to fill with crap.

      1. ” But that doesn’t mean that you would be better off attempting to make your own shoes. ”
         Huh?
         “A house costs more than an average person’s *lifetime* income.”
         If this statement were true, there would be no houses – to own or rent.

         1. Wrong.
            Because houses last longer than an average person’s lifetime.

         2. That would only be true if houses were built by a single individual who only ever built one. Of course the builders (and the associated industries around them) recover their costs and make a profit.
            Average Oz income is about $70k AUD. Over a 40-year working life, $2.8M AUD.
            Hmm. Ok, maybe I was overstating the case.

      2. I sold a large house at the peak of the market due to divorce (lost any equity to the bitch). I stayed in a small two bedroom apartment for several years with my two youngest boys (teenagers at the time). I bought a fairly large three bedroom townhouse at just about the trough of the market. I used my VA benefits so no downpayment or PMI. My mortgage (which includes taxes and renter’s insurance) plus home owners association fees (which includes exterior maintenance and fire and other homeowners insurance exclusive of contents) is $1,255. My rent over 6 years ago was $1,275. It would be much higher now as the market for rental has gone up significantly. The walls and windows as well as the appliances in the apartment were of low grade making the place drafty and cold in the winter and hot in the summer. I had to pay the utilities separately in the appartment. Heating and cooling the small apartment was much more expensive than it has been in the townhouse. Yes maintenance and repairs have added to the costs, but the tax benefits have reduced the costs as well. In this particular market for me the costs of owning are lower than the costs of renting.
         I agree that for a young guy the effect of chaining yourself to a location before becoming stable in employment is foolish. I am in the last job I ever will have. When I retire I am leaving the country. In any case I was locked into the location because of family. I did pleanty of moving around chasing jobs early in my career and was through with that long before this last housing purchase. If the market collapses at or just before I retire I will just have my sons live here for the price of paying the mortgage. This is much less than an equivalent rent would be for them and they can have the house after I leave this planet for the next life.

   3. You never truly own your house. The government does.

      1. you never truly own anything, even yourself, in a country where the government has the right to lock you up for not paying them for services they force you to purchase. (police, paving roads, schools, fire departments, congress etc.)

         1. healthcare

8. Economic slumps are cyclical, and housing inflation tends to follow it, the period of those slumps is roughly every 7-10 years. If you don’t mind moving every 7-10 years, and you play it smart, you can buy a house when the market is down (you know, like, now), sit on it for a few years, then sell when the market starts to peak again, then rent a place during the next decline.
   I, however, hate moving. And the cult of consumerism does find me with a shitload of crap (and also a crapload of shit) that I don’t really need.

   1. Once you add in closing costs, realtor fees, and the fact that — for the first few years — you’re basically just paying interest on the loan, this would not be a good option for most people. Even if you played the fluctuations in the housing market right, you would still be lucky to break even.

9. Slightly more technical arguments for and against homeownership:
   * For US residents, mortgage interest is the only tax deduction not subject to AMT (well, ok, also alimony). If you are a high income earner, the cost of your mortgage is less than it appears.
   * Mortgages are the only way private citizens can borrow cheaply and leverage themselves. Every other kind of loan is far more expensive. This can be good (most of the time) or really bad (2008).
   * The author, is right about rates. Unless you live in SoCal, Miami, or Vegas, the vast majority of buyers are on a mortgage and not cash. They only look at the mortgage payment and pay little attention to the price, i.e. principal vs. interest. Obviously, rates and prices therefore generally move in opposite direction to keep total mortgage payments at the market level where buyers can afford them. It actually makes more sense to buy a house when rates are _high_ and prices _low_. As rates drop, you can refinance and your home may go up in value. If you buy now when rates are _low_ and prices _high_ and rates go up… well, you got a cheap fixed loan, but your home is probably worth less. When rates will ever go up is another issue.
   * The computation of buy vs. rent is complicated. Transaction fees are high so if you move often, it’s probably not worth buying. Before the 2000s, housing was generally not seen as a great investment since it mostly goes up about in line with inflation after costs (taxes, maintenance).
   Few of these points apply to readers outside the USA, since I think only we have a mortgage interest deduction and fixed-rate mortgages and many international housing markets are driven by cash buyers instead, many of whom couldn’t care less about prices since they’re very rich and just trying to stash money someplace safe, like a house in London or Vancouver.

   1. I got two great pieces of advice from a friend and co-worker that later became the owner of a brokerage; 1) always buy a house when mortgage rates are high (prices are lower then adn you can then refinance when rates drop), and 2) always buy a used luxery car (they depreciate really fast and most luxery car owners take great care of the car.) Both of these rules have worked well for me over time.

10. Why my last email was banned if i behaved with class and didn’t start any flame war, just because i my name of FEMINIST GIRL? do you admire Russia so much that also you are start to copy their habit to ban democracy and opposition? eh? i have more freedom in many other blogs where people are banned because right reasons such as really offensive speech, shame

    1. Where’s my sandwich. wench?

       1. Do not reply to females here on RoK anymore guys.
          Cmon.
          Lets stand united on this.

       2. If the sándwich have poison you still would want it? : 3

    2. I have never not been by a feminist site and I’m always polite as I demolish the feather-brained arguments contained therein

    3. No one wants you here. Go away.

    4. I just visited a blog where the OP posted a long long post about how fat is beautiful. Any post saying the opposite was deleted. That´s democracy for ya. And we are talking about being fat, something that is obviously wrong, ugly, and negative in so many ways that is defined as a sickness.

    5. If you are banned, how come I can read your posts?

    6. I admire these Russian feminists a lot
       http://missjonespa.com/admin/assets/post/Femen_revoluciontrespuntocero.jpg

       1. How come our feminists don’t look like this? Fuck! I feel shafted. Russia may be a horrible shithole, but they have a few things going for them.

11. Not digging this article — though it makes some good points. With stuff like this there is no “one size fits all” solution.
    I just purchased a house. I had been in an area where I rented a house for 6 years for about $1000 a month. That’s $72,000 I blew on rent. The house I rented was worth no more than $90k. I could have purchased it.
    That’s my situation. I don’t live in an area where houses start at $500k for 1200 sq ft either. I think buying a place like that is insane.
    My mortgage cannot go up. My rent always can.
    While I may be stuck in one place if I buy a house, I can always sell it. If I sign a lease, I could also be stuck, or may have to pay a hefty penalty.
    I can rent out my house if I ever do have to move or downsize.
    A house you rent can get filled with useless stuff too. Clutter is not a renting vs. owning issue.
    And what’s wrong with attractive a golddigger if you’re smart enough to know how to deal with one?
    I’d rather see an article regarding the current housing situation and what buyers should consider if they make a purchase. But buying a house is still a sound investment in many parts of the country.
    Finally, the author used the word “irregardless”, which is not a word. That last one is just a pet peeve.

    1. interest pretty much doubles that price, though…

       1. You are making tons of assumptions here.
          I paid just shy of $1k/mo for rent for 72 months.
          Had I purchased that house for $90k 6 years ago, and put the 20% ($18k) down on the house to avoid PMI, my monthly payment would have been $480.26 if property taxes were set at 1.25%. That’s at the minimum monthly payment. Over a 30-year loan, that’s $67k in interest at a 5% interest rate.
          But had I paid $1k a month on that purchase instead, I’d be paying off the house this year. Instead of paying $67k in interest, I’dve spent only $14k in comparison.
          But yes, paying the minimum owed for 30 years is really a dumb thing to do.

    2. Out of that $72,000, what did the city take, like $20,000? And this tax cost will only go up, maybe by quite a lot

       1. What do you mean what did the city take? I paid $72,000 to my landlord. I am not sure how he handles the profits. My guess is though that part of my rent absolutely went to property taxes. Not sure what your point is.

    3. Also, you can take a deduction for your Mortgage interest if you itemize.
       How can I place a tangible cost on all the sleep I lost when annoying noisy tenants in my apartment building woke me up with their incessant slamming of doors and noise? Lack of privacy? Inconvenience. My landlord turned off the water for 8 hours at a time once a month for “maintenence”. Inspections of my apartment.
       I bought my house 4 years ago at the bottom of the housing crash. Its worth about 30K more than I paid for it.
       Its not always the best option, but like having a nice car, a nice gym membership and a nice job — having a home that you as a single man can live in and call home — without some cunt bitching at you, or a bunch of expensive whiny rugrats screaming and shitting the place up ;
       Truly it is “the american dream”

       1. Owning is great if you really have the proper cash flow to maintain it. If you are someone who is on a tight budget, stick with being a tenant.

    4. “My mortgage cannot go up. My rent always can.”
       Here in Oz, mortgage interest rates are “market rates”, which means “whatever we happen to feel like charging at the time”. This means your mortgage fluctuates with the reserve bank base rate. Essentially, they have made it legal to pass on those risks that banks are instituted to take on onto the average Australian with a mortgage.
       Given that in the USA the reserve bank has been goosing the economy with a zero percent base rate, and that “things that can’t go on forever, don’t”, you may be in for a nasty shock if you don’t have a fixed-rate mortgage.

       1. I used to really like Australia, but the more I hear about your legal system and the deep entrenchment of feminism; the more I resent the citizens for just laying down before the government.

       2. Um, that may be true in Australia, but here in the USA there are as many mortgage options as there are patterns of snowflakes.
          Most homebuyers choose a fixed rate mortgage. The interest rate and consequently the monthly payment is constant for the full 30 years. However, the peace of mind that this offers is offset by the risk that rates will drop. You can, however, choose to refinance, but this involves new closing costs, which may be more than you would save in interest, depending on how long you expect to live in the house.
          On our home we have an adjustable rate mortgage (ARM), which is similar to the product you mentioned. ARMs come with risks too, chiefly that of rising interest rates. However, due to Obamian zero interest rate monetary policy, we are in our third year at 2 7/8%! So we have made out quite handsomely. (But don’t misunderstand–I still loathe him)
          Another advantage of ARMs is that if you pay additional principal monthly and reduce your loan balance even further when your rate is lower, that will offset any increases in your monthly payment later when interest rates rise.

       3. It’s because we don’t have 30 year duration bonds and other investments like the US does. US banks can get long-term funding, ours cant. Hence none of them are going to offer you a 30 year fixed rate mortgage when they can’t get the funding for it. It has nothing to do with “making it legal to pass on the risk”.
          As for the article, I pay far less on my mortgage than it would cost to rent. That amount is going down over time, and it means later in life I will have a roof over my head without ongoing rental or payments. While you have listed some good reasons not to buy, there are also some very good reasons to buy. If and only if you can easily afford it.

          1. Banks in the US don’t borrow long term to fund mortgages and usually do not hold and service them (although some smaller local banks do write, hold and service mortgages for their own clients). For the most part (>90%) they write, package and then sell the mortgages through Fannie and Freddie Mac to investors, effectively acting as financial intermediaries for these two government agencies.

    5. who says the mortage cannot go up? =)) that is funny. If you read the fine print banks have the right to change the taxes and commissions as they feel fit at any time. Also you must account for inflation as well. When inflation happens the rent will go down but the mortage will go up when considering the gold as the metrics calculated against.

12. The prefix of the word irregardless is redundant. Just say regardless. Holy shit I’m thinking a woman wrote this.

    1. But ‘irrespective’ is ok.

13. The writer forgot the most important thing in real estate – Location, location, location! Some markets are great for buying, some are not. It all just depends on where you reside

14. New policy for all RoK’ers here. No replies to any female comments.
    Period.
    Ever.
    Solidarity.

15. So, what are your credentials that you’re giving such solid Real Estate advice? Anyone in the industry will tell you outright that the majority of “online mortgage calculators” are BS and can’t possibly give you an accurate depiction of what you’ll actually pay because there are many factors that go into what kind of rate you’ll get…none of which can be determined in a 5 second click. Homeownership is incredibly important, check your facts and educate yourself before you go around giving such horrible advice to your target audience. This article is poorly researched and just plain irresponsible.

    1. LOL at the frustrated real estate agent and/or mortgage broker.
       “Homeownership is incredibly important” to my commission-based income.

    2. “What are your credentials to give out advice on not touching live electrical wires?”

16. ITS A FIXED HARD ASSET – you missed out the most important point…
    Real Estate can be easily traced, it’s hard and slow to sell it, easy to get a court order against, super easy to raise taxes on it…. and if you get divorced, sued, prosecuted for criminal activity, go bankrupt in
    business, have enemies, experience threats, have journalists looking for you, have a mistress that wants to ruin you, etc. etc. etc. there it is… like a two story naked erection with your name tattooed on it, in com’nget me town…. USofA.
    stocks, bonds, cash, gold, business hardware etc…. can be liquidated, put into a nominee’s name, relocated etc…. easy to move sell or hide…. a house is starting point worth thousands, and most likely filled with your stuff or rented bringing you needed income…..
    you are also most likely saddled with a debt on it that if you don’t pay means you lose….IF you mortgage it to the hilt it’s safer, but you also stand a higher risk of losing it, than you do of losing a rental since landlords will often negotiate on payments, but banks have straight defaults that go into the system… ALSO: you cannot leave it uncared for or the local govt can posses it… and in some places you MUST pay for utility connections whether you use them or not.
    You castle easily becomes your jail….

    1. Of course, life isn’t worth living if you have to do it out of a suitcase.

       1. Isn’t it? That’s a values call, and you are entitled to feeling the way you do. But other people are not obliged to feel the same way you do.

       2. I think the musicians of the world would probably beg to differ…. i’ve lived out of a suitcase for years and it was fantastic… my only regret was that i stopped…. world tour baby… rock n roll….

       3. Healthcare Traveler magazine would argue with you.

    2. Absolutely excellent points. I live in houses that I “control”, but ownership is in others names — I find that works pretty well too. I must say, though, renting has far more practical advantages than owning, especially in this day and age of soooo much criminality and propaganda.

       1. Also remember that real estate is only as good as the Gov’t that enforces the ownership rights of it. The Federal Gov’t has a huge stake in ‘your’ house. It wouldn’t be an overstatement to say that the US gov’t is fiscally irresponsible. Many things could go wrong in the future. Considering the hard Socialist lean that the Federal Gov’t is taking now, it’s hard to say who will ‘own’ your house in the future.

       2. the only hassle with renting is that especially with houses, the properties can be a little poorly maintained…. that’s why i generally go for new condos… i’ve lived in brand new condos the last 10 years…… first person to live there… paying tiny rents compared to buying…. the house boom/bust was great for renters… so much inventory…

    3. Excellent perspective. True wisdom. There are a handful of situations where buying a house makes sense, but they are rare. Stay away from home purchases. Leave it for the investors.

17. for me, I just bought a house because I need space for my cars, a shop for my projects, and land to grow food. I also thought to buy a house way cheaper than what I could afford just in case I run into hard times… now the part about being stuck to one place kind of sucks, but I could always travel, and if need be, I could put it up for rent

18. I am currently buying somewhere (no real choice as to where). What I don’t understand is why property is necessarily thought to tie you down to a particular location. If I rent it out and I can rent elsewhere and move around. I’ve rent previously for years, and depending where you are its usually more expensive, unless there’s going to be another slump

    1. Because dealing with renters is a pain in the ass, even if they are decent tenants And it can be a nightmare if they aren’t.

    2. Yes you can, but being a landlord is a proper job. If you already have a busy life, you may not want to have to deal with such a hassle.
       That’s why eventhough buying real estate to rent it out can have good return, many wealthy people prefer to invest in something else, far less trouble.

       1. Most wealthy people i know don’t invest in property anymore due to the low return on investment. In Australia, buying taxi licenses will earn you a higher income per annum than an average house in a middle class suburb. That’s how artificially inflated the the Australian housing market is.
          My friends tend to play the stock market but i find that a complete headache.

          1. “My friends tend to play the stock market but i find that a complete headache.”
             Dividend stocks from big trustworthy companies are less of a headache. Might be worth giving it a look.

          2. Thanks. I have looked into it, or at least did years ago, but the rate of return tends to be lower so you have to invest more. It’s long term, just like real estate, except without the problems like maintenance and upkeep.
             I’d probably rather do that than invest in another unit or apartment though

19. Rent vs buy is more complicated than the math that’s presented. Google search for “rent vs buy calculator” for a better quantitative assessment. The answer in this regard is really “it depends”.
    The main thing for me is the mobility aspect. Sure, you can always sell or rent out the house if you need to move to a different location, but it’s still less mobile than renting. I think if you know you’ll be in the same area for the next 5 years, and have stable income, buying May be an option.

20. “It Is More Expensive Than Renting”
    I suppose it is according to where you are. Here, in small town Kentucky, I went from a $550 per month rent to a $600 per month mortgage. Considering I can pare that down to nothing but insurance and property taxes eventually, I think I made a good deal. After interest, the total cost of my home will be approximately $100,000.
    Also, though, being from a rural area, renting options are low anyway. Typically, you need to find a house in these areas if you’re going to hang around.

21. “Reasons why buying a house is a terrible idea” is the title of the article…..no, it’s not a terrible idea. This is bordering on a terrible article. I’m a financial advisor and if you can get a decent interest rate….it’s always better, financially , to buy. You’ll look up 15 – 30 years down the road and own a valuable asset as part of your net worth. Your rent will amount to you increasing your net worth zilch.

22. Love this article, this is great advice for men trying to build net worth through investing. Property is not an investment in the majority of cases, but instead a liability. A very easy formula to follow. To invest in real estate, you must be able to receive $100.00 in rent for every $10,000.00 you paid for your property. This equation is great for beginner investors and takes into account all the minutiae associated with buying, upkeep, etc.
    For example, owning a $300,000.00 property, you must be able to collect $3,000.00+ a month for you to match or beat an index fund (like S&P 500 index). Look for long term growth of your money as well. Will there be good jobs in the area in the next ten, twenty, or thirty years that will support your tenants?

    1. And you need to factor in the amount of time your are spending on running a rental property. If you could make money by spending that time another way, then that lost opportunity is also a cost.

    2. I own a house. But I agree totally that property is not an investment. My house is a place to live. A rental would also be a place to live. The decision for me was which was cheaper for the quality? I worked the numbers and I can live cheaper by owning. I have no false hopes of eventual housing inflation making this property appreciate. That will not happen in our lifetimes, for way too many reasons. Falling overall population will mean lowering propertiy values as demand decreases. Each year there are fewer households needing a house to live in. More people retiring than new family formation. This trend will accelerate. The shadow inventory is still out there is another reason.

23. Bought the house 26 years ago and paid it off in 2010. I own a business so I’m not going anywhere except to open a new office. Looking to build another house at the beach in a couple years.
    Yes, if you are young, single and have a high probability to relocate, buying a house would be a poor choice.
    The economics of buying low and selling high remain.
    Thinking about the vasectomy though……..

24. Buying a house is a better idea in most cases. When it comes to land, God isn’t making any more of it, so better to own your piece. You don’t want to be retired in your mid 60’s and still at the mercy of landlords and rising rents. 401Ks and retirement portfolios can and do get wiped out as recent times have shown – better to have something tangible squared away for those later years.

    1. When it comes to land, you’re right, God isn’t making anymore of it. On the opposite end of that though, God made more land than humanity can ever fully use. Are you aware of how massive Planet Earth is?

       1. “God made more land than humanity can ever fully use.”
          Except west coast beach front property located less than 2 hours from major cities.

       2. Australia’s a biiiiiigggg fuckin’ place. There’s a reason why 98% of the population hug the coast line.

25. Remain liquid. Rent and be able to move when you want. Invest the money you are saving from renting into another venture that makes you money. Houses are long term investments. If you are going to buy one, save up and buy it out right. You will actually save more money in the long run this way. I would still just recommend renting a condo. It’s simple

26. Counterpoint to those who are pro home ownership bc of “land as a scarce resource argument”… If you are location independent it honestly doesn’t matter. Pack up and move where it’s cheaper. Easy solution.
    If you must buy, buy a condo near a major university on the cheap and rent it out to students. Students and their parents are willling to pay a premium for convenient housing.

27. I guess I’m shit out of luck then, I’ll be done with the mortgage this year.
    Interesting to hear about the shadow inventory thing, very educational.

28. The age old college commie kid arguments.
    Buying one is not so good, buying a dozen is best.
    Being poor keeps you a slave.

29. My brother-in-law and I have argued over the benefits and drawbacks of home ownership for years and I use much of the logic in this article in my argument. He’s bought into the “American Dream” of home ownership (he’s declared bankruptsy twice), me on the other hand, have never put myself into a living situation where as soon as I got tired of peoples shit that I couldn’t pack up and be gone in a week.

30. Brilliant article. I’ve been saying this for years. Glad someone finally said it right.
    THERE ARE VERY FEW IF ANY BENEFITS TO BUYING A HOUSE IN AMERICA IN 2014. No one will tell you this; not the banks, not the gov’t, not the media, not your parents, not the women you date, not your best friends. Nobody will tell you the truth about this. Anyone who reads ROK instinctively knows that in this current climate in the West, disregard pretty much all mainstream advice that anyone gives you. They are all in on it. Some have better intentions than others, but they are all still wrong. Follow your gut. Don’t listen to others. And certainly don’t buy a house if you’re a single, young man.

    1. Agreed. Another reason not to buy a house: eminent domain. If you truly believe you own a house you’ve purchased for a ton of dough, just wait until your usurping government decides that it will take that property of yours whether you like it or not.
       Also, beware of that cable tv channel HGTV…watching that channel may convince you that buying a home is in your (and especially your wife’s/gitlfriend’s) best interest.

    2. I disagree, it makes a great place to hide a body till you can dispose of it 🙂

31. Solid article. I am working on a geoleveraging plan – using $AUD to live like a king, in Asia, on the cheap.

32. I agree with most of this, but if you only pay $600 for rent then you should be able to easily find a house for half of $250K.

    1. I rented a single room in a three bedroom house not the entire house. My landlord was one of my roommates along with another guy. I have a drama free lifestyle and so did my roommate/landlord. The value of the house was around 250K and the rent would have been lower, but he had a big screen TV with surround sound. Otherwise, I would have found a cheaper place to rent.

33. I bought a foreclosed house for much less than the neighboring homes were worth, so it’s been definitely good for me. A little fixing up, and it’s still below the value I’ll easily sell it for. I encourage buying a house no larger than 1500sqft, since nobody really needs that much room. If you’re still in your 20s, I highly recommend getting roommates to help pay for your house. I didn’t do this in my 20s and really regret it. Instead of being on the receiving end of having a house paid off, I threw $30,000 down the rent drain. Smart families I know helped their kids in early 20s buy a house and do exactly this scenario.

34. I would add that the CPI keeps rising so the cost of actual goods is way out of proporion to earnings as actual net earnings are declining.
    Are you East Coast or West Coast?
    What did you major in?

35. If you can, buy the house outright for cash and put the money you would’ve been spending on a mortgage payment every month into mutual funds. (The saving might be a bit to do up-front, but you make out on the money you don’t end-up handing to a bank in the long run.)

36. Agree with this. You will also have to pay your local government or mafia more protection money for your new asset.

37. Why would a man buy a house? So he can fill it with a bunch of video games and flat screen bullshit? Like an overgrown kid outfitting his kick-ass treehouse? To have a place to park his over-polished Camaro or Charger or WhatTheFuckEver with the custom rims and quadraphonic Blaupunkt and racing stripe? The one he drives in a circuit from his job selling mobile phones to the gym to the same 2-3 bar/restaurants?
    This is what men are now? Please.
    Houses in the suburbs are made for women — neat and tidy micro-manor houses, arranged in perfect little rows, like human farms, conveniently located near good schools and shopping areas, making you perfectly ripe for being taxed and catalogued. All in exchange for what? A lifetime of debt and lawn mowing.
    Sounds like something that was designed from the ground up to suit women’s priorities.

    1. It is indeed designed to suit women’s priorities, and men waste all their money in it because they’ve been brainwashed to believe it’s the one and only path.
       A man will be far happier with a one-bedroom appartment with good logistics and the huge bag of cash he saved.

       1. meh, cabin in the woods. beat up carport with my johnboat and an old pickup in it. Most of the public area converted to a kitchen, bedroom in the back. a place for my smoker, a shack for my armor and weaponsmithing, no lawn to speak of, just tons of trees and leaves, and a big ass brick barbecue.
          Owning a house AWAY from the suburban hellfarm is usually only a 10 minute drive. There’s always little undeveloped areas in suburbia to hide in.

    2. This! It’s usually women who think the ‘burbs are all that. I’m a suburban homeowner now. In addition to all the debt and maintenance headaches, there’s the neighbors who are about as interesting as watching paint dry. It’s rare to come across someone here who has a personality.
       But, just 6 more years of this. Once the youngest is old enough to drive, I’m filing for divorce & renting an apartment where I won’t spend much time anyway because I’ll be too busy traveling and fucking women 15-20 years younger than me.

38. Agree 100%. Where I am from, mortgages are illegal for good reason. They tie you down too much. Mortgages turn you into a beta, because you’ll have to take any abuse from boss and co-workers and have to suck up to them to be able to keep your mortgage payments and you have to sacrifice having fun in life. Then cancer from the stress kills you early and you have never lived, saying you’ll live when you pay your mortgage.
    Rent, travel, dance love and live like a European!

    1. “Mortgages turn you into a beta”
       Good yuks. Except, I picture the renter, powerless to his landlords and housing committee moms, as the true beta. On a side note to your point, it’s the beta homeowners who are making it tougher for the alpha homeowners, now that insurance companies can just walk up on your roof without so much as a form letter warning they will be showing up in the next six months to take pictures and tell you that you need a new roof or windows (thanks guys, I’m too braindead to see that myself). This is a result of women and beta owners who can’t be bothered with homeowners’ responsibilities (or are simply limp betas), and need a massive corporation (today’s surrogate mommy) to walk their roofs for them. -get off my lawn
       If there’s any reason to not own a home these days, it’s this reason. Insurance companies and banks going all nanny-state on your ass. It actually DOES make you feel like a beta to be told your shingles look old and are in need of repair, using threats of non-renewal, etc. Very insulting to a homeowner who takes pride in actually taking care of his own house, etc. On another note, it’s the homeowners in my neighborhood who are women who seem to need or even expect this corporate prodding as a paying customer. Sick stuff. It’s beneath them to evaluate conditions of their abode, or maybe there was enough whiney betas who blamed their leaky roof on someone not telling them it needed to be fixed. All I know is, get off my lawn.

39. Buying a house is not an “investment.”
    A real investment throws off cash instead of eating it. Houses eat cash through upkeep (nowhere near as cheap as the author suggests, even if you’re a handyman), interest and property taxes. My nearly retired mother pays more than $9k/year in property taxes and no less than $3k/year in upkeep. That is $12k/year evaporated for nothing. If she had put $12k in the market each year for 10 years she’d have done pretty well.
    Sure, the house may appreciate — but would your equity appreciate faster if you put it into a dividend-paying stock or used the capital to start a business?
    Renting is cash out the door too, but given the factors above you’re almost always better off renting in today’s Bernanke-inflated housing market.
    Don’t take my word for it. Fire up Excel and do the math yourself. You’ll be surprised.

    1. Could your mom rent something nearly as nice as her house for $1k a month?
       Math pretty regularly works out to 4-8 years. Keep in mind as a renter you are paying property taxes and repairs its just being lumped into a single non-itemized bill.

40. I think you’ve missed auction property or repossessed buildings, which typically fetch 45-75% of market value only.
    I’ve been considering saving to get a repo flat in a reasonable location and doing it up myself, but the point on employment is solid. The other option would be letting it and using the money to cover my own rent somewhere else. Basically give myself free housing without the issues related to it.
    (Note that I am unsure if this would work in a similar manner in the USA. Welsh.)

41. I think it is OK to buy a house, but wait until you can buy one with cash.
    As for the shadow inventory, a little known fact is that now the Federal Reserve itself owns a huge number of homes in the US. That is because the Federal Reserve has been buying up bad mortgage backed securities as part of QE 3 (or 4 or 8, hard to keep track of them). The Fed unwinds those securities and takes possession of the underlying asset that backs them – e.g., houses.
    Now, oddly, the Fed is the largest single own of single family homes in the US. One has to wonder what they plan to do with them all.

42. The only legitimate points here are the cost and the location bound. Let me first address the location thing. Experts tend to say, don’t buy a house unless you want to live there a minimum of 5 years. That’s not that much commitment to a city. Really it isn’t. It might seem that way in your early 20’s when you want to move every month, but everyone soon grows tired of all that moving. I moved 13 times in 15 years. It was such a waste and extremely expensive to boot. Putting down some roots actually saves you considerable money because every time you move you have to cough up first, last, security and moving expenses. It also takes several years to really experience a city or an area to it’s full potential.
    The other item is your loans are based on traditional loans. There are countless other ways to get a house. I got my house, 1700 sq feet on 1.25 acre, in a nice country setting for 65k. It was a foreclosure. I paid cash. You gotta shop around for good deals. If you go at it like everyone else does the bank will bend you over backwards and you will be stuck in a 15 to 30 year mortgage where you pay double or more what the house cost over time. That’s practically loan sharking. Think smart, even if that means you have to buy in to a few houses and fix them up and sell them. You can build equity by starting small.
    Rich people know that owning is the key, renting is what rich landlords do to poor people to keep them financially enslaved for their entire life. Look in papers, talk to realtors, there are fixer-uppers and even darn good homes that are foreclosed upon and you can still get in for quite low. Cash is king.

43. People who are worried about taking 30 years to pay off a mortgage need to examine this concept. If you buy a house in your 30’s and get it paid off in your 60’s(assuming longest term loan) at least you can live dirt cheap for the remainder of your golden years. Try being 60 and renting a place for $1,200.00 a month. Where are you going to get that money? That’s not social security money, that’s working full time at a decent job type of money.
    It just doesn’t make sense to be on the short end of the stick and that is renting. I could rent my home out for $1000-1200 a month. That’s roughly $12,000 to $14,000 a year. My gawd the profit!! Do you know what my paid off home costs me? Get ready! *drumroll* $2040.00 a year to own and operate – that’s property taxes, hoa dues, and home insurance. If you want to talk on a few hundred or even a cool grand for home repairs it still means I can make a shit load of money off of you. Enough that I could rent my home out and have you pay my rent at another place I want to live. Thus owning a home can give you not only the flexibility to move, but the flexibility for your renter to pay for wherever you want to move to. This is a scenario you just can’t get in renting.

44. ‘It Is Not A Good Investment Anymore’
    Not really true. Depends on region, perception, country, transport development, history, ease of access to credit etc. Major urban concentrations in developed countries aren’t going to drop value any time soon, as money from emerging markets continues to flow in.

45. Probably the worst article I’ve seen on this site. Real estate markets have huge variances depending on location. Not to mention the myriad of other variables that weren’t covered. Stick to writing about game and similar topics.

46. Section 8 is cheaper thab a house.

    1. Section 8 can move in next door and drop your value.

       1. Yes Sir! Happened to my mom’s house. The 2008 recession did not damage the market as much as section 8 did. Jefferson Park Chicago IL.

47. Agree overall. Mainly the mobility factor . The days of staying in one place , one job and retiring with the fat pension and gold watch are over. Being able to relocate at a moments notice is key…

48. My parents made a ton on their real estate but i never traveled until i was 15 years old. My rent has gone up $15 in the last 6 years in brooklyn, i prefer being liquid and mobile…if i had kids i would consider owning

49. Well, here’s the thing – houses, like stocks, can make awesome investments if you know what you’re doing. I found a great NEW house on 1/2 acre 20 miles from a major city that was on foreclosure for 99K, about 1/2 price. I’ve paid 1/3 of the mortgage off in 2 years, and if I ever need to leave, the renter will pay the rest off for me. If I spend about 2K in fix up, I could resell it immediately at a low price and still get over 50K in profit.
    Real estate is also, believe it or not, a much more stable investment than stocks, bonds, etc. If you have a title and no mortgage on it, you have a parcel that can cost $2000-4000 in taxes and upkeep, but can rake in $5000-$7000 in profits yearly (and that’s a smaller 1.6-2K sq ft house in the South.)
    Finally, the places that got creamed in the market crash are obviously overinflated places (Florida, Cali, Las Vegas, etc.) The majority of America took a minor hit.

50. I owned 2 houses and both times I had to transfer or change jobs, sell the house and move. Didn’t make any money and it was a pain in the ass. Housing is a long term investment and the world is unpredictable. Not sure I’ll buy another one, I’m spooked. Hats off to those with a knack for making money in real estate; it ain’t me brother.

51. I own my own house outright at the age of 35. I am thinking of borrowing a small amount to renovate, but i like that i can just rent out a room when occasionally strapped for cash. It is a small house but it is comfortable. I treat it like a spacious apartment. I have rented it out and lived elsewhere though, so owning does have its benefits.
    The gold digger comment is true, especially given the global housing crisis. Tell a girl here–Australia– that you own your own house and it increases the chance of her latching onto you. Fuck that. I worked damn hard to pay it off and won’t allow some broke opportunistic bitch to move in with me.

52. I’m 38 and after quite a lot of sacrifice, I now own my house.
    But whilst paying it off, I still travelled overseas for a couple of months a year. I no longer have a wife and I don’t have any kids. This is the clincher. A man in a decent job without a wife and kids can own a house quickly, if he puts his mind to it.
    I don’t have to worry about being kicked out or having the rent jacked up. If I lose my job or there’s a great opportunity elsewhere, I’ll rent the place out and pay rent. I can always come back to where I live and I’ll never end up sleeping in a gutter (unless by choice, of course).
    Whilst living in my house, I don’t have to pay rent and having no debt to speak of, I can spend money like a drunken sailor and still have enough left over for savings.
    It’s not possible for many of the young guys now, though. Jobs are scarce and it will only get worse. Mortgages in Australia are ridiculous. People are starting to take out 40 year loans, paying nearly as much interest as the value of the property itself.
    Crazy world we live in now.

53. This is not applicable to everyone, at every location, at all times in their life. For example, where I live my house would rent for about $1700-1800/mo. My 15yr mortgage with taxes and insurance is $1300/mo. Of that $1300/mo, $600 is principle, so my effective cost of renting from a bank is $700/mo instead of $1700-1800 by renting from a landlord. I also don’t have to live under anyone’s rules and I can do almost anything I want to it.
    Hell, a shitty 2 bedroom duplex or apartment rents for $1300/mo around here. I get to live in a nice, quiet, private house,
    If I want to move, fine. I’ll rent it out and have someone else pay my mortgage. I’ve never used a realt-whore to sell a house. You’re a sucker if you do, unless you’re out of state.
    Yes, there’s some occasional repairs that need to be made, but amortized over a space of years, it’s really not that much if you do it right.
    It saves me almost nothing on income taxes, despite popular opinion.
    There’s no reason to horde shit either and craigslist and ebay have made it easy for anyone to offload their crap.
    Sure, there’s going to be people that get hurt when interest rates rise. But if your mortgage payment is affordable and cheaper than rent, there’s not much of a downside.

54. I’ve read a few posts above and can definitely relate. I think moving can be hectic and a lot of trouble at times. However, with A-1 Moving & Storage, my move was fast and easy. I moved from Jupiter to West Palm Beach earlier this year, and I contacted A-1. They were prompt and very professional with their services. My stuff was picked up on time and none of my items got damaged during the transit. I do recommend you check these guys out if you are planning a move. Give them a call today (561) 625-0600 or check out their website at http://www.a1moving.com/

55. I went to a party some guy (friend of a friend) had when he bought a newly-built house. Suburbs. All White and Asian neighborhood. Very expensive. Multiple bedrooms and bathrooms. Huge garden.
    He lived with his girlfriend. He is White, she is Indian (dots, not feathers).
    He bought the house. He was an engineer. She was a Womens Studies major who worked part time in a grocery.
    Do I even need to continue with this? Is there anyone who can’t predict the ending?
    Well…
    I only met them the night of the house-warming party, and am relating what was told to me about what happened later.
    However, I could easily tell that he was a decent, easy-going, sincere guy; and she was a beady-eyed, devious, sarcastic, manipulative bitch, who looked like she could never be happy. Based on her conversation, it was obvious that she wanted a White “partner” (not a husband, and no kids) but despised Whites, and she was a disappointment to her parents, who she despised for being “traditional”, while she also defended “Indian traditions”, etc. And he seemed very smart, but dumb-down beyond all hope about reality. He surely hoped to have a family, an easy life, a pleasant family-life in the suburbs, with no hassles.
    After a few months they were constantly arguing. She would scream that he was “controlling”, and that he was acting like he owned her, just because he paid for everything (house, car, furniture…everything). The idiot pleaded with her, trying to convince her that he never thought about such things, he just wanted her to be happy and finish university and do well in life.
    She called to cops, said he had threatened her. He was ordered out of the house or threatened with arrest. He stayed with a friend and then went home the next day. They argued. She called the cops. He was put on a peace-bond and ordered to stay away from her. He went to the house when she wasn’t there, to get some clothes. A female neighbour who had been alerted to the “danger” he posed called the cops. He was arrested.
    Long story short: She filed for divorce as his “common law spouse”. He couldn’t afford a divorce lawyer because he was renting a room and paying for the house and had criminal defence lawyer fees. She had all sorts of formal and informal support from government agencies and tax-payer-funded “NGO”s. She got the house, he had to keep up payments until she graduated with a Masters Degree. She sold the house and got most of the income from it. I last heard about them about six years or so ago.
    Hopefully he is now more wise than self-destructively bitter.

    1. I would literally kill that bitch no matter what.

56. Climate Change is The New Hitler oy vey!

57. Also, what if you buy a house in a good neighborhood, but then after a few years it’s worthless because packs of Negroes have moved in (or have been moved in by ZOG)?

58. In my country the government jacked up the rent for houses. They gave the housing associations a green light to do that. The only reason: to push people to invest their savings into mortgages. Housing Salestaxes = money for the government. Dirty bastards.

59. This guy took 1 economics class in highschool. He doesn’t know what he’s talking about. This is not rocket surgery. Equity, period.

60. I used to hear that it was the best investment I could possibly make. Not if you can do 5th grade math. There are good reasons for owning a house, but none of them are financial. A house is not an investment. A house is a stop loss.

61. First off you ignore the case in which you pay it with money and not a loan and ignore building a house again with cash. Depending of the area it may work. But never ever buy one while being with a woman because the law will give it to her if you break up and if you do not she will control you.

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