Throwing Money Away (Buying vs Renting)

* leaky roofs

* broken appliances: clotheswashers, water heaters, etc

* maintenance of a/c, heat, etc.

* maintenance of water pipes, electricity, etc., etc.

* upkeep of lawn, sidewalks, driveways (except in rare cases)

* building safety compliance

* fixing damage from floods, storms, earthquakes, etc.

* worry about termites, the foundation, the well, property line disputes from faulty surveys (the latter occur ALL THE TIME in the US)

* building insurance (renter's insurance always a good idea tho)

* personal liability for visitors hurting themselves on the lawn, sidewalks, driveway, inside stairs (anywhere outside your actual unit)

I could go on and on... if you own a condo, you are subject to surprise "assessments" to care for the building/property amenities, but there's insurance for it. If you own a house, it comes out of your pocket. And if you make claims against accidents (tree falling, storm ripping off siding, etc.) on your homeowners insurance policy for damages, their habit of late is that they will drop you. (Lots of scandals about this.)

Renting means very little exposure to this kind of risk, or surprise housing costs, in addition to flexibility to leave.

Homeownership pr0n is really out of control.

Just like 'working for yourself' is something a lot of people would like to achieve, 'owning your own home' features on the list.

It's also good for society, giving people more of an incentive to look after their home, their surroundings and to take an active part in society. As well as removing some of the separation of society - land owners, and renters.

Being less likely to move around has its good points as well as bad.

My plans over the next year? Move to Kerala, learn Kalaripayattu and work on my startup. Several renters had similarly interesting plans.

Every single homeowner (or homeborrower) had plans to remodel some room of their house.

I'm firmly convinced that a home is nothing more than a ball and chain.

[edit: changed 'similar plans' to 'similarly interesting plans'. A reply to this post made me realize it was unclear.]

    "Whether stability is such a good thing in a downturn,
    though, is a different matter. A decade ago Andrew Oswald
    of Warwick University argued that owning your own home
    makes you more reluctant to move, so labour markets tend
    to become more rigid as home ownership increases. He
    claimed that increases in the level of home ownership
    (though not necessarily the level itself) are associated
    with rises in unemployment. Ireland, Greece and Spain all
    saw large increases in home ownership in the 1980s and
    1990s, and had relatively high unemployment. America and
    Switzerland had stable ownership rates, and escaped the
    long-term rise in joblessness."

It most certainly does.

Suppose you bought a 500K house now that you could rent for $3K per month. Paying $5000 in taxes (about what you'd pay in MA) means you should buy.

A year from now, don't you think whether that house is worth $600K or $400K has a big driving factor on whether you should have bought or rented?

To use HELOC, you need to have equity in your house. In current market where house prices are down significantly, most of the folks have either no equity or they are upside down on their mortgage. These folks can't get HELOC.

Even if you could get HELOC, it may not be worth it. HELOC is amortized interest only like a credit card. That means you will keep paying towards interest for first few years before you even touch the principal. Also, HELOC rate is tied to Prime rate and if it changes your payment will change. Federal Reserve has kept the Prime rate too low since 2001 and I think it's bound to go up.

Please be very careful (I can't stress this enough) if you are considering HELOC.

For a single person it could be a big difference (some are up, some are down). But over the whole US it's a wash - the number of people who are upside down is exactly balanced by the number of people who made a lot by selling.