pierrec45 said...
I would add on top of some possible long-term monetary gain, there is an associated change in lifestyle - not for the best.
Buying a house makes you stale. You start cocooning, you stop doing sport and going out. Can't go with the old mates: gotta mow the lawn. You start renovating (and much, much worse: you watch renovation programs on TV). When after 5 years you're done going around the house renovating each room, you start all over again. Unlike what you see on TV, most of the renovation adds little to the value of the house: the next buyer won't like the colours and walls anyways. You will also build a nice deck with pretty flowers all over the yard, where you will spend more and more time, with ever less going out. However you will visit other friends that have decks, so you can compare your respective abodes. This becomes your new social life.
If you're with a missus, and she watches more TV than you or gets clucky, then multiply the cocooning effect by 2 or 3. Set aside also a fair chunk of add'l $$ for furniture: it's a lot more expensive for garnish your own home than a rented condo - curtains, everything.
After 15-20 years of fixing and refixing, you start relaxing a bit. You start living again. Seems to happen when people reach 45-50 or so.
Don't get me wrong, I'm a homeowner myself, but I look around my street and a large % of their time is not spent living. Yes they will most likely have more equity when they're older - I know I will.
You guessed it, I haven't painted the walls in 12 years. It's been a long fight with the missus, but she don't windsurf - I do.
Sort-of agree, but because my wife (then girlfriend) & I bought our 1st place at age 19, we don't know any different. You could use the same analogy for having kids. We've renovated (put 15sqs on top), and had 3 kids in the past 8 years, and only now getting back to having what you call an easy lifestyle (although with a 1yr old - not so easy). W/surfing, suping, camping, fishing etc. every weekend.
I don't think we're in the 'beige' category - but we both work (me full-time, my wife 3 days a week), 2 kids at school and a toddler at daycare 2 days a week. By purchasing our house pre-2000, our house is worth over 3 times what we bought it for and spent on renos, which has given us equity (mate) to allow us to invest in more property, most of which is tenanted, so basically pays for itself. We regularly get letters from our RE agent to increase the tenant's rent, but choose not to, as it keeps the places full, and although it might prop up our bank balance...that's not what we're about.
My wife (who is a home finance manager, which saves me from trying to get my head around it) has set up the loans so that (in theory) by the time we're ready to retire, the mortgages will be paid off, and we can retire comfortably on either the rental income, or sell. In the meantime, we're scratching coins together to afford little luxuries (2nd-hand w/surfing gear etc.) like everyone else?!
There's positives & negatives for owning your own home, but I'm glad we bought young (1st home in '94 = $60k)...I feel for young people trying to get money together to buy the same home now for $200k (local market value of same house), I couldn't even imagine trying to buy in the city at urban prices ($400k+).
My father also told me to "buy young", and I always remember what an old property developer told me, "if you buy a block of land, and things go pear-shaped...you can always pitch a tent on that block of land and live there, you can't pitch a tent on a share portfolio".
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