Wednesday, September 05, 2007

Homeownership Sucks!



I know a guy who, unfortunately is amidst a divorce and has left his 3,700 square foot, 100 year-old Victorian house and moved into a 3 bedroom rental apartment. He insists that aside from all the other issues implicit in a divorce, he is loving renting now. He has nothing to worry about fixing or renovating. He no longer comes home to annoyances like leaky faucets; he no longer frets about peeling paint or creaky steps. Now he just comes home from work and can finally relax.

My wife and I considered buying a decrepit Victorian house in Waltham and he, coming from the unimpeachable perch of experience, essentially said not to do it. Asked if he went back in time, would he still buy his old Victorian, this guy said he would only buy the house if he were "young and dumb."

This was one of the points I argued with my wife when we were jawboning buying a few places earlier this year. Every little repair job in a house is a burden on the MAN. He's the one that has to diagnose and research every little issue. He's the one who has to manage plumbers and contractors as they try to ravage his wallet. I told my wife that renting allows me to sleep at night - a luxury of almost unquantifiable value.

So I am here in my new place four weeks now. The rails on the staircase are falling off, the window sills outside need paint, the glass door on the shower is hanging by a thread, both the seal and the lock on the back door are in disrepair, the pump in the air conditioner has been broken and fixed twice recently, and there's probably some more stuff I can't remember at this instant. Again, this is only over the past four weeks!

Then this week my landlord got hit with two more little disasters. The blower on the septic tank went - cost $770. And, in the course of trying to convert the heating system from oil to gas he not only obviously needed to buy a new boiler - costing a few grand, it turns out the chimney that houses the exhaust also has all sorts of problems. It has a crumbling interior of asbestos, terra cotta, or some other junk; it had to be swept/vacuumed out and now needs a new steel liner. This will run around $1,800 - so they say. It might even make sense to completely rebuild the chimney, given the total cost.



So yes, I truly believe that Homeownership Sucks. It is completely overrated AND it makes no economic sense given that rental costs are roughly 70% of purchase costs nationwide. In Florida, they are down to 60%.

How many times have you recently heard Morons say they bought a condo because they didn't want to deal with yard work and upkeep?

Notwithstanding the premium of buying over renting a place, it makes perfect sense that an abode with outsourced upkeep should cost more than a place where dwellers are responsible for every little maintenance problem.

Devil's Advocate - No, those condos pool their upkeep costs, spread them over more people, so they'd be cheaper to maintain than individual units.

Now that's a great little theory, but have you ever seen low condo fees out in the real world? I haven't.

Added to that is the bickering amongst condo owners over management decisions. How often should the grass be watered? How much to spend on flowers for the common roadway? I know a new tony condo development in Port Washington, NY that is already awash in management strife. There was a big brouhaha about how long the parking lot lights would be left on at night. The cheap old folk wanted to save money on electricity. Remember, that's what fossils do whether they are rich or not - they run around turning lights off.

As I sit here typing this, my landlord is outside trying to remove a sliding glass door and re-glue the insulation. It's a little complicated to extricate such a door but he's hoping to avoid calling a carpenter.

I gave my wife last night the litany of things that have gone wrong in our first month. I chuckled that I love having a landlord because it's like having a handyman, on call, for free!

What could possibly be more ideal?

In this hectic age where consumers highly value their free time, don't y'all think that free maintenance and outsourced upkeep should demand a premium?

In other words, it should be cheaper to buy than to rent a given house that's replete with the on-call handyman.

Sometimes the market prices of our world really are upside down.

UPDATE - Door couldn't be fixed by owner. Carpenter has been called.

28 comments:

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Taylor Conant said...

Well aren't the "market prices" obviously topsy-turvy because of Fed intervention in the market? If you expand credit to bad risks in the home ownership sector while not doing the same in rentals, won't that create excess demand in owned homes and therefore drive the price up past its normal equilibrium?

I guess part of the problem you're describing mostly pertains to old homes, as well. If you could scrape together the dough for a new build, you might not have as many problems, at least not for ten years or so.

Definitely see what you're saying, and maybe you're right given the realities of today's market, but it sure is weird to think that you're right and that renting is superior to owning. After all, it's always poor folk who receive criticism for renting everything in their homes rather than saving up and buying it.

CaptiousNut said...

taylor,

Most everyone is "renting".

Just because they do not realize it, it doesn't mean that mortgagers aren't simply renting money.

Taylor Conant said...

Well I realize that, actually. I was going to ask again if one benefit of ownership might be that in the event of an economic downturn you will still have a place to live for sure, but since most people mortgage most people would probably lose their homes anyway, as they are merely renting from the bank.

Isn't it closer to leasing, however? Renting connotes you're definitely giving back at the end, whereas with a lease you MIGHT give it back or you might buy out at the end.

Mr. Dart said...

I don't know about that "Homeownership Sucks!" title Cap. My wife and I have owned a succession of 5 homes. Seven years after retiring at the age of 45 we let the 4th house buy the 5th one for us. No mortgage; so we don't "rent" or "lease" the house we "own." When we downsize in another 5-10 years this house will buy our next one. Home ownership for us has been a crucial component of the realization of the American Dream-- we started married life with ZERO money in the bank and a willingness to work our asses off.
However, crabgrass sucks.

CaptiousNut said...

Monkeydarts,

Do the math, you would have made a bunch more if you borrowed and put that money in the stock market.

For sure, if you buy your first home at the bottom of a cycle, you can create some real wealth. But for everyone who buys at the bottom, there are probably two people who buy at the top.

LiveWorkDream said...

I completely agree!

Anonymous said...

nice blog. Homeownership does suck. Paying over 1/4 a mil on a sucky old condo in DC area, now 4 years later, and 40k worth of upgrades, i'm going to closing, for 1/4 a mil, and paying for my buyers closing costs and down payment (not to mention the 14k in commissions). Had to borrow from my retirement fund just to sell this place.

Never buying a home again.

Anonymous said...

I've linked to this on my own site. Excellent work.

Anonymous said...

Ha -- I just googled 'home ownership sucks' and your post popped up immediately...

I totally agree. These needy, insatiable monsters end up owing you, sucking the life out of you, bleeding you dry.

Never again.

Thank God for corporate relocation packages -- we're happy with the buy out estimate, we're taking the money, putting it in the bank, and renting in the city again. No leaks, breakdowns, 'surprises', squirrels, termites, crappy neighbors, lawns, trees, acorns, or any of the other nightmares that come along with the great American myth of home ownership.

Good riddance.

Anonymous said...

Thank God for Corporate Relo's I'll second that! 150k loss tada gone along with a new home that had a basement flooding twice, windows with seals broke, supposed maintenance-free deck that after one year looked oh, 20 years old, and on and on... now in a beautiful apartment with granite, stainless appliances, two car attached garage, washer-dryer hookups, a pool outside the back porch, for oh, a grand a month!

You couldn't pay me to buy a house again.

biometric time clock said...

Owning a home is expensive. Something is always breaking and needing maintenance.

Sentry Safe said...

I was watching HGTV and even now years into this mess, people are cashing out what little savings they have to buy an 'investment'.

Didn't these fools learn anything from the last bubble? Owning property is a liability, not an investment!

CaptiousNut said...

Sentry Safe,

For everyone who has *learned something* I submit there's another out there who is *bottom picking* the housing market these days.

Everyone buying foreclosures in Florida is a cash investor. It may take some time, but they will all end up disappointed, and poorer. For sure, half of all fortunes have been made in real estate....but none of them when interest rates were low.

And I always wondered how HGTV was going to handle the post-bubble. I rarely watch it these days, but I am sure they've buried the euphoric shows.

CaptiousNut said...

There is a house in my town that was featured in *My House is Worth What?*. It was highly appraised by an expert a year or two ago.

Right now it's for sale. We'll see what it fetches in the more dispassionate free market.

Anonymous said...

Agree completely. I was a first time home buyer May 2009. Repairs, upkeep, and time dedicated to the yard and housekeeping are not what I expected and way more expensive than I ever imagined. Wish I still had access to the "free" repairs that came with renting.

Anonymous said...

Yep, I'm stuck in a house. It sucks. I bough 8yrs. ago and recently needed to put in a new boiler ($15,000!!) and replace the roof ($9985.00) new carpet ($4000) always fixing stuff and pulling weeds-- yard overgrown, foundation has cracks (yikes!). Paid $267,500 and might be worth 299-315 but I doubt it. I'm single and havent been on a date in years... all my spare time goes into the home. Now people moved in behind me with Rottweilers that bark all the time... such joy. I worked hard an paid the mortgage off so I have no monthly payment and I STILL hate it. Yep, all you folks out there listen up--I say only buy if you have kids and want a permanent home--if you're a sigle or newleyweds just rent, there's too much uncertainty in life.

Anonymous said...

If I wanted to buy a house, it would have to be a crack house for $100,000 in a "hazardous" neighborhood. That is, a neighborhood where you need a bulletproof snowsuit with bulletproof helmet like a space suit. And a car with the "Gauntlet package" (and with "Lindbergh package" for good measure). You could imagine a morning where you see on the Dan Ryan a used cop car with steel cowcatcher and an astronaut behind the yoke.

Housing prices are WAY too high for the average person. And the real estate agents are wondering why nobody is buying.

CaptiousNut said...

Anon,

Yeah, but it's only you and me who think/realize that home prices are still outrageous!

Stationary Explorer said...

I'm in my third year as a homeowner and have nothing but tears and regret to show for it. Every time I turn around something's going wrong. My wife and I fight and scream at each other more than ever. We've got mice in the attic, a furnace that won't stay lit, a central air system that sucks, an arctic finished basement, a hotter-than-Hell upstairs loft bedroom, a yard riddled with weeds and mole damage, drafty windows....on and on. I'm not handy and I can't handle stress. I lose sleep at night counting all the troubles piling up and watch as my hard earned money is handed over to repairment and con-artists. Apartment life wasn't perfect; neighbors were noisy dirtbags and I couldn't play my records as loud as I wanted to, but at least I didn't walk around each day waiting for Death to appear and release me from this sick crap-shoot they call a life.

CaptiousNut said...

Explorer,

Is there any realistic way you can get out of this money pit?

And where in NY are you?

We had a rodent problem, a furnace problem, and all sorts of other issues in our last rental. I'm not handy either and have always been scared to death of the 30-year prison sentence that is euphemistically referred to as *home ownership*.

Now we are squatting at my MIL's house in Nassau County. Taxes are 15k per year (and rising) and the place needs work on every front. THANK GOD I don't own it! I can always escape to Florida...

Never, EVER buy a house - that's my advice to almost everyone.

Stationary Explorer said...

I'm upstate, a little north of Albany.

We just refinanced last summer, so I think we have to stay here for a little while longer.

I'm not sure what to do. It's hard to think about going back to apartment life after investing so much time, effort and money into furnishing the house.

I hated the rude neighbors at the old apartment complex. I'm not a people person. But it might be worth the annoyance to escape the burdon of owning this house.

After getting married I, like most people, thought buying a home was the logical next step. Now I see the error of my ways. This is not the life I envisioned having. This is torture and slavery. I echo your sentiments... HOMEOWNERSHIP SUCKS!

Anonymous said...

Down here in South Florida on the beachfront, condos can be rented from private owners for 20-25% more than their monthly carrying costs (taxes, condo fees, insurance). That's assuming there's no repairs needed to the unit nor no special assessments from the condo board. That's a very liberal assumption. Forget about a mortgage on a South FL condo--this is a cash-only market. Lenders won't touch this place. So, why would I?

CaptiousNut said...

Anon,

They might get a premium over the carrying costs in the winter....but over the course of 12 months they most certainly will not.

And the banks are all sitting on tons of empty condos there. Miami has to be the most overbuilt city.

Lizzy said...

rich people problems - i would love to own a home - hard to respect your complaints - and when I rented an apartment with my the husband years ago, I did all of the fixing and painting - your choice to marry a woman who had no interest in fixing things or creating a beautiful home (or maybe she did create beautiful home that you just couldn't appreciate)

CaptiousNut said...

Lizzy,

What is "rich"?

If you have a roof over your head....you are wealthier than something like 80% of the planet.

Unknown said...

I wish my husband want to buy a house because renting is wasting.throwing a.money.and.know.that you.will.never.own this place.

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