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Comment by i_am_proteus | Hacker News Reader

Several thousand more per year doesn't sound too far off: if you own, you're responsible for home repairs: roof, HVAC, electrical, plumbing, appliances, siding, painting, etc.

I budget $2,000 a year for repairs on a modest-sized home; most years it's under $1,000, but HVAC and roof are infrequent and fairly expensive.

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Landlords absolutely incorporate home repair costs into rent. I'm shocked at the number of people who assume that landlords just eat the cost of maintenance. Just because you aren't forking over the money directly to the repairman doesn't mean you aren't paying.

Even if we say that the owner is spending those several thousand dollars on maintenance that just means they're cash flow neutral. They are still making thousands through increased equity and appreciation.

Well, yeah, except 2008 kinda put a dent in that.

Only if you were forced to liquidate before the rebound. Even if you bought at the absolute peak in ~2008 you'd still be way ahead today.

Not if you live in Phoenix[1], Miami[2], Las Vegas[3], Chicago[4] or a host of other US cities.

[1]https://fred.stlouisfed.org/series/PHXRNSA [2]https://fred.stlouisfed.org/series/MIXRNSA [3]https://fred.stlouisfed.org/series/LVXRNSA [4]https://fred.stlouisfed.org/series/CHXRCNSA

You're not accounting for equity changes. Even if you lost 20% of your house value you've paid down more of your mortgage than that.

On a typical 30 year mortgage you haven’t paid much principle in the first 5-10 years. So if you’re still down 10% (as some of those cities are), you could still be in the red.

For a 4% loan you pay off 10% of the mortgage in the first 5 years and 22% after 10 years.

I'm in my first mortgage, 30 years on ~$200k, almost nothing down. Starting to look at selling next year, which will be year 10.

If it sold for the price I bought it, I'd walk with at least $40k of equity after closing costs. But it's also increased in value about $60k.

And I'll have maybe $10k in maintenance and fix up costs over that decade.

It depends on the neighborhood and unfortunately the racial and the economic makeup of the neighborhood.

https://www.forbes.com/sites/forbesleadershipforum/2012/12/1...

Anecdotally speaking, I bought a house in a new minority subdivision in 2003 brand new build. The value went up by about $40K by 2008, crashed to $40K less than I bought it, and today it’s still worth $4K less than I bought it in 2003. It’s still a nice neighborhood so it hasn’t gone “downhill”.

Being the numbers oriented, unemotional person that I am, I did a strategic default in 2012 realizing that I could be eligible for an FHA 3.5% down loan in 3 years after the foreclosure, applied and received a loan exactly three years later and had a house built in a new subdivision in a predominantly White neighborhood. The value of the house has gone up $70K in 3 years and a house with basically the same floor plan is being sold for $70K more than mine was 3 years ago. .

And to hopefully stave off some of the expected replies:

- No the world shouldn’t work like that. But to paraphrase Buffett, “the world can stay racist longer than I can stay solvent”.

- No I’m not racist and it’s not that “I don’t want to be around Black people”. I am Black.

- Yes I know “White Flight” is a real phenomenon. But there is also a well studied “tipping point” when that occurs. I don’t see that tipping point happening.

If you live in your house instead of paying transaction costs to sell, lower property value just means lower property taxes and a more prosocial working class neighbors.

What it put a dent in was the expectation that real estate prices only went in one direction. (Of course, the popping of several previous real estate bubbles should have dented that before 2008, but....)

A townhouse in the western Chicago suburbs I bought in 2006 for $280k and walked away from in 2012 finally sold to the next owner this year for $208k. It will still be another decade or two (if ever, depending on the rate at which property taxes rise to offset Illinois pension obligations) before it appreciates back to what I paid.

The landlord makes the down payment and the landlord takes the risk.

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