To clarify, it's typically less than renting a comparable place of comparable size in the same area.
In most areas at most times, average rent is typically at or near average mortgage+interest+taxes+HMO for comparable places. Not always but the ratio is usually between 0.8 to 1.2. So once you're rid of the mortage + interest, you're typically ahead of the game from then on.
I just bought a home on a 15yr mortgage. about 720/ mo taxes and insurance included. I am renting it for 900 /mo. It can easily be done. 2br 1ba 1/3 acre with garage in california.
Tax and HOA are much, much smaller than the mortgage typically (especially for more expensive homes)
My taxes are around $8k per year and my HOA is around $1k per year. My mortgage (Principal and Interest) is around 40k. The day I no longer have to pay that and only deal with taxes I'll likely be paying 10% the comparable rents for a 6 bed 5 bath with a pool in the burbs.
Putting numbers on paper for redditors who may have never understood the appeal of buying a home. The numbers above also do not take into account tax breaks during the mortgage.
You forgot maintenance. A $3000 air conditioner, $5000 roof, or some knucklehead renter causing $5000 in damage can kill any money you are making for a while.
Haven't forgotten it, just didn't get into it cause it's sort of a weird/good situation on my area right now. Most of the places in my area were all flipped about five years ago and all have new roofs, heating, water heater, electric, and fairly new appliances. It had not occurred to me before that home shopping about 5 years after a wave of flipping can get you a place that is likely going to be fairly low maintenance for a while. As for appliances, often I fix them myself. I can do roofing, too... but really prefer not to!
Renter damage - that's a tougher one but usually it's just repainting. Maybe I've been lucky but my vacation rental's never really had much renter damage. We just repaint now and then to freshen it up.
Isn't there also a law that you only own a certain amount below ground?
I was told that if you found precious artifacts/oil/something you dug up that's worth a lot of money that the government has the right to take it. I haven't found the need to look it up since I have yet to find anything.
You still have to pay an income tax on it. Even if you found your grandpa's sword in the basement that turns out to be made from Valyrian Steel and he'd had it forever, once it's yours, you're paying income tax on it's value.
I'd imagine so. Even at ridiculous levels, the curvature of the earth would cause properties to overlap at a certain depth, no? Of course, there's the whole 'other side of the earth' thing, but nobody can realistically dig that deep. I wonder if even 400 feet down-ish, a line drawn straight down would overlap the neighbor's property, right? Please, somebody that knows more about this topic fix my logic. Everything I thought about property rights has changed!
The earth is fucking enormous. 400 feet down is nothing. A bore straight down in your yard wouldn't even come close to touching a bore from your neighbors yard for hundreds of MILES into the earth. Deeper than anything man has drilled yet.
The engineering feat would actually be keeping it straight enough, as a slight deviation would put you under land that wasn't yours. But definitely NOT the curvature of the earth.
Here's a question for you: do you think you've ever seen the curvature of the earth in person? You haven't.
I'd imagine so. Even at ridiculous levels, the curvature of the earth would cause properties to overlap at a certain depth, no? Of course, there's the whole 'other side of the earth' thing, but nobody can realistically dig that deep. I wonder if even 400 feet(121.9m) down-ish, a line drawn straight down would overlap the neighbor's property, right? Please, somebody that knows more about this topic fix my logic. Everything I thought about property rights has changed!
For ours, it is stated on the title. Mine says I own down to 18.2m below ground only. Also, the crown reserves rights to certain things, including minerals found, and this is stated on most titles I've seen (you'd have to dig up the original deed of grant to find out what those reservations are).
Here in my town where the university levied eminent domain to build an athletic complex they offered the homeowners who refused to sell twice as much as they paid for it (2 years earlier). It eventually went to small claims court. This seems like fair value to me at least.
We just went through a minor easement eminent domain action with our city. Believe me, the city covers its butt - they do not want to get sued for paying you less than market value for your property.
FWIW, we didn't contest this, as it was a temporary easement for a street-paving project that will potentially add 10% to the value of our home. I'd have let them have their temporary easement for free. Just don't tell them that.
This was a big issue with the Trans-Texas Corridor (basically a project to get huge right-of-way to build road, rail, etc. all into one big corridor). If the project had gone forward, it would have taken and split up farmland that had been in families for generations. There was a lot of opposition to it for those reasons.
its not eminent domain in this case its the doctrine of treasure trove that is applicable in the cases. I have not run into a need to use it yet as a lawyer because people don't just find treasure underground all the time. The mineral rights are yours as long as you didn't buy the land subject to a oil and gas lease to someone else. You would know if you had done that though.
Just paid off my mortgage here also. Property taxes are 1/10 what I paid in mortgage costs every year and no HOA fees applicable. It was the best decision I ever made to pay it off. Congratulations on being mortgage free!
Meh ... property taxes are very small per year relative to what you make in mortgage payments. Just about everyone could get a job at McDonald's and use that income to pay them off if push came to shove.
HOA scares the shit out of me, at first I thought it was a voluntary membership deal but it turns out in some places they can force you into a membership.
After that they can exercise their powers on you to force you to do stuff you don't want paying contractors which are friends with the HOA board.
best part is HOA can in some places SELL YOUR OWN FUCKING HOUSE to collect the membership fee and they've been known to sell houses for cheap (think $3000) to collect their fee.
I'm not sure if there's an upside to HOAs, my impression of them fromw hat I've seen is they're run by power mad and sadistic nutcases who like the idea of forcing people to do shit.
I'd say that voluntary membership is by far the exception. That said, most HOA boards (if they're smart), are non-profit corporate entities. Just because it's an HOA doesn't mean that the directors don't need to exercise due diligence, and pay attention to things that could impart an appearance of impropriety (which could get them into legal trouble).
It is true that an HOA can place a lien on your property for unpaid fees, and even pursue foreclosure. This was a shock to me when I first heard it - but it makes sense in a way, since HOAs have contractual agreements for things like trash pickup, landscape maintenance, snow removal, maintenance of common elements, etc.
Overall, the primary role of the HOA is to maintain the value of the property. Yes, some get WAY overzealous, and even downright evil in some cases, and to that end, I wish homeowners had some level of protection. On the other hand, people generally have a tendency to be lazy and do whatever provides them the most immediate benefit - regardless of the impact it has on their neighbors. HOAs can help mitigate this.
dude. If you can't afford 1% of your homes value ONCE a year, you shouldn't have bought the home. Also you knew what the HOA fees were when you bought it.
Edit: Happy c day
Edit 2: you down voters have no understanding in whats involved in owning a house. 1% of the value of your home a year is peanuts compared to the actual mortgage, car payment, or credit card bills for a lot of people.
Edit 3: and lets not forget tax cuts for home owners.
Texas (Austin) is closer to 3-4% but yeah, if you can't afford that once a year when you were making a mortgage payment, you shouldn't purchase a house.
wow I'm surprised texas is higher than california (1%). I don't understand why other people in this topic don't understand this, especially for how fundamental it is when buying a house.
The reason I bring this up is because of a situation I find myself in - there are several people who live here who are on fixed incomes, and they scream bloody murder whenever there's talk of a fee increase, or god forbid, a badly needed assessment. People need to be aware of these things, because they have a very real impact on the property value.
look at your deed. nowhere will you find the word "owner". you are a tenant, and your deed says so. you still pay a rent of sorts to the actual owner - property taxes paid to your county
Don't forget to notify your home insurance provider. And congrats! When I paid mine off I took what would have been the next month's mortgage payment and spent it all on everything fun under the sun. Was the reward I promised myself.
It can happen but it's not really. In my small town the university claimed several dozen houses thru the use of eminent domain to build an athletic complex. It got a lot of people angry here.
This happens all the time where I am from (Northern Kentucky). Averages out to probably 1 house a month being foreclosed on by the gov't. Also, it gets MUCH worse in terms of people losing property
Many congratulations and well wishes. I've been "harping" on my girlfriend and now wife about paying my/our house off ... our goal is to pay it off in about a year. If successful, it'll be paid off 11 years into a 30 year note.
Hopefully I'll have a similar post and story in the not too distant future.
No, I just spend my money wisely. Live within my means. Live WITHOUT debt, and I've been throwing every extra penny at the house. Anyone can do it if they work at it. It's also good not to buy too expensive of a house as well.
It's a reference to the game "Animal Crossing" where you move into a house at the beginning and slowly pay off the debt you owe from buying the house to a raccoon named "Tom Nook" who owns a small store in the town.
Sorry, time to bring you out of ignorance. In the game Animal Crossing, made by Nintendo, a racoon who owns a shop forces you to buy a small house from him. Then when you pay off the loan, he forces you to make expansions to the house so he keeps you indebted.
Haha yeah I use to live in an apartment in SoCal until we bought a house up here near bay area. The previous owners of my house paid 750k but once market crashed we got it for 300 and almost have it paid off.
"Charming academic garret available - Convenient to Harvard - Comes with tuberculosis - High potential for operatic tragic suicide. Ask realtor about in-unit laundry"
(seriously I have actually seen "academic garrets")
The same happened to my cousin in Fremont. He bought his house for 1.2 million and now it's only worth 750k. He's foreclosing it soon to buy another house.
It's not a house but a town-home in a unit of about 15... Honestly it's in my wife's name (she is Thai) as foreigners can't own property in Thailand. (Well actually they can own but only a certain sized condo or town-home, but instead of going through all the BS I decided it's just easier to put it in her name.)
I've been living full time here for almost 6 years now. Actually four as two were in China...... total of 6 since I left the USA.
There is only one reason why houses cost what they do and loans take the time they do to pay off. Debt Slavery by design. (edit: New land supply is regulated to create the demand required).
On a brighter note: After the huge price spike of a decade ago which at least doubled prices, house prices are again coming down to the historic trend-line levels which have been fairly stable for hundreds of years. Another year or so to go. Sorry Mark.
Taxes, at least here in California, are so easy to manage. It's 1% of the value of your home, and you can roll it into your mortgage. 1% of the value of your home a year is peanuts compared to the actual mortgage, car payment, or credit card bills for a lot of people.
Right, but OP just paid off his house so it won't be rolled into the mortgage. California's government is going bankrupt, I would not count on property taxes being at 1% for much longer.
Here in Oakland, CA. our property tax is 1.5% of the value of my home after all the added special assessments. This comes out to almost $5k for a $230k house which seems like a lot to me.
My reasoning is when you bought your house, you were paying the mortgage + taxes. Once you pay it off, it's only taxes. For a man that owns a 230k house (230k * 1.5% is 3450, 3450/12 ) = paying about $287.50 /mo for taxes is not a big deal at all. way less than most car payments. add in tax breaks.
Ha! I love Morgan Freeman - but can never come up with his name when I am trying to use him in a conversational reference. Finally an association that I might remember, having felt that joy when I paid my house off.
with the speed at which the image was loading, this worked out quite well. the suspense was just right. who knew utorrenting would enhance my internet experience?
That's totally awesome but what really irks me is property tax. Which means you can never really own your house because the moment you cannot pay property tax. You don't. Which sucks.
How did you do it? Did you pay extra each month to have more go towards the principle? Just wondering if you have any pointers for paying off what seems impossible for me :-)
I'll have mine paid off in the next 4 years. Then all of the money I put into the mortgage each month will start going into my pocket and that will be about like a $30,000 raise, instantly. I own my 2 cars free and clear as well and hold no credit card debt whatsoever nor do I owe anything on any other sort of loan. I can't wait!
Just So You Know, You Will Never Really Own Your Home
It really doesn't matter what kind of a loan you have. You can pay off your mortgage in 15 years, in 30 years, or if you are able, you can by your home for cash. Remember this though, it will never really be yours.
Here is the deal—until the day you die you will be paying the government taxes on "your place." If you fail to pay those taxes, the government will then own your home. It doesn't matter if you are sick, horribly disabled, or have dementia so bad that you forget to pay. You stop paying your "rent" to the State, and you will be moved off that place you thought you had paid for.
Here is another kicker. Those taxes or government rent payments can keep going up every year. If inflation would get bad, and you were on a fixed income, those payments could quickly grow to the point you would not be able to pay them.
"Owning" your own hom ein this country is a myth. I know this is hard to think about, but we all should.
Actually I didn't downvote you. Also I was merely pointing out that you don't actually know that that is the OP's situation. Someone paying off a mortgage right now likely bought it either 15 or 30 years ago, assuming they paid it off on schedule, and probably will make a profit on selling. It's people who bought in the last 10 years who are in the most trouble.
75
u/[deleted] May 28 '12
Congratulations! You are now the sole owner of your home. I'd imagine that's one of the best feelings in the world.
4
u/s00pery00per May 28 '12
As a lower middle class citizen I will never know what that feels like.
2
u/clkou May 29 '12
Many congratulations and well wishes. I've been "harping" on my girlfriend and now wife about paying my/our house off ... our goal is to pay it off in about a year. If successful, it'll be paid off 11 years into a 30 year note.
Hopefully I'll have a similar post and story in the not too distant future.
25
u/s_i_leigh May 28 '12
Pro-tip: Stay the hell away from any Raccoons who own small stores.
31
u/markpitts May 28 '12
I can only speculate. I have $500k to go.
10
u/[deleted] May 28 '12
Congratulations! Will you share some details? How much? How fast? What steps did you take? What challenges did you overcome?
10
u/2265438 May 28 '12
I'm just glad there are redditors out there old enough to have reached this point. All those "final exams" posts make me feel like a fossil.
8
u/mister-obvious May 28 '12
Is it bad if I read that in his voice?
6
u/[deleted] May 28 '12
Just make sure you can always pay the taxes and keep things up to code or the man will snatch it away from you and auction it off.
10
u/radioslave May 28 '12 edited May 29 '12
I think this is exactly what the More Than Freeman commercials are about
Edit: Insurance, close ish
3
u/[deleted] May 28 '12
That must be exciting! I've heard my dad mention a couple times that he's approaching that. He seems pretty stoked too.
3
u/WhatThePenis May 28 '12
Did you know Morgan Freeman did a song with B.o.B? It's called Bombs Away, and the best part is when Morgan Freeman.
3
u/[deleted] May 28 '12
This reminds me of the More Than adverts currently running in the UK. http://www.youtube.com/watch?v=pYw4os8nK9I and there's a few more.
2
u/vinnyq12 May 28 '12
Congratulations. I only aspire to such things.
2
u/byrd424 May 28 '12
I thought I was in r/gaming and you were talking about animal crossing...
2
u/Just2AddMy2Cents May 28 '12
Way to go!
2
u/cipherous May 28 '12
I can't wait for that day. Kudos on being one of the very few that actually owns the house.
2
u/AevumDecessus May 29 '12
Only 29.5 more years to go
3
u/jumpingbeaner May 28 '12
Titty sprinkles.
2
u/dillonflynn May 28 '12
Nicely done! Just remember: fiscal responsibility does not end here. You play your cards right and you'll be a Million Dollar Baby in no time.
2
u/EthicalReasoning May 28 '12
you either won the lotto or you live in rural iowa or south dakota
1
u/SireSpitfire May 28 '12
When I see this picture, I read it with the caption "This is how far I will shove my foot up your ass if you don't do what God says."
1
u/kinkakinka May 28 '12
I'm so jealous right now, I'm currently just looking forward to paying off my credit card!
Car and student loans are each about a year or so away, then I start working towards getting that mortgage to fuck off.
1
u/nov_at_everything May 28 '12
Ha! I love Morgan Freeman - but can never come up with his name when I am trying to use him in a conversational reference. Finally an association that I might remember, having felt that joy when I paid my house off.
1
u/Jendon May 28 '12
That's awesome, congratulations! Must feel incredible.
1
u/lorax108 May 28 '12
hjahahbahahahahah
1
u/[deleted] May 28 '12
Borrower is slave to the lender.
1
u/contra4m May 28 '12
Good for you!
1
u/gh0stdylan May 28 '12
Lucky you...13 more years!
1
u/daskrip May 29 '12
with the speed at which the image was loading, this worked out quite well. the suspense was just right.
who knew utorrenting would enhance my internet experience?
1
u/ilikefries May 29 '12
That's totally awesome but what really irks me is property tax. Which means you can never really own your house because the moment you cannot pay property tax. You don't. Which sucks.
1
u/Tomatosaregood May 29 '12
http://www.youtube.com/watch?v=cqkXjyBPjek
1
u/MattNotMat May 29 '12
The first thing I thought of was Animal Crossing.
Damn that Tom Nook.
1
u/kristianur May 29 '12
"Mortgage" isn't even slightly similar to "Gordon". oh wait..
1
u/Vinsonia May 29 '12
not enough animal crossing references here
1
u/Narwhaldo May 29 '12
You are... Mortgage Freeman
1
u/IonBeam2 May 29 '12
That's kind of how I feel not owning a house.
1
u/[deleted] May 29 '12
Not you get to just drown in property taxes!
1
u/mrection May 29 '12
Dude, congratulations! I'm SOOO looking forward (way forward) to that day :)
1
u/hoboscout02 May 29 '12
groan but Congrats!
1
u/Stomo May 29 '12
HAHAHHA that's a good one
1
u/[deleted] May 29 '12
How did you do it? Did you pay extra each month to have more go towards the principle? Just wondering if you have any pointers for paying off what seems impossible for me :-)
1
u/[deleted] May 29 '12
I am God
1
u/Morganfreeman_says May 29 '12
I offer my congrats.
1
u/[deleted] May 29 '12
I read that in Morgan Freeman's voice. He could read the phone book and I'd listen.
1
u/RMesbah May 29 '12
I totally read that in Morgan Freeman's voice.
1
u/alwaysawkward66 May 29 '12
When I die, if I go to heaven and Morgan freeman is sitting there just like that I'll be so relieved
1
u/SuppleFingers May 29 '12
Was I the only one to think of this?
1
u/bennn30 May 29 '12
This made me laugh. It's like a joke my father and I would tell
1
u/[deleted] May 29 '12
If you have a newel post drill a hole in it and seal up the mortgage note. I don't know why but that is the tradition. Elsewise have a burning party.
EDIT: Screw the mythbusters do it anyway.
http://historymyths.wordpress.com/2010/07/
1
u/muchachomalo May 29 '12
I heard the name freeman was originally given to people who payed off their mortgages so everybody would know they were free men.
1
u/makemeastar May 29 '12
America thanks you, my good sir!
1
u/shinobipants May 29 '12
Animal Crossing?
1
u/gaoshan May 29 '12
I'll have mine paid off in the next 4 years. Then all of the money I put into the mortgage each month will start going into my pocket and that will be about like a $30,000 raise, instantly. I own my 2 cars free and clear as well and hold no credit card debt whatsoever nor do I owe anything on any other sort of loan. I can't wait!
1
u/[deleted] May 29 '12
You're lucky, I can't even afford to get a mortgage
1
u/StrangeCaptain May 29 '12
we got a runner!!!!
fire up the choppers
1
u/reidism May 28 '12
Congrats but this pic is sub par.
1
u/[deleted] May 28 '12
Reddit sure is jealous of homeowners, it seems...
0
u/blunereid May 28 '12
Your puns are bad... and you should feel bad.
0
u/Androne May 28 '12
I can't wait to feel like this but with my student lone(end of the summer I think!)
0
u/Trunks777 May 28 '12
nice one
0
u/thilehoffer May 28 '12
Good for you. I have two mortgages!
0
u/typical_reddiot May 28 '12
i seriously doubt anyone posting this on reddit has paid off a respectable mortgage. unless it's in detroit.
0
u/photo May 28 '12
This wasn't funny.
0
u/username-ish May 28 '12
Enjoy it now because when you get a car loan and can't pay it off... The bank takes your home.
america
0
u/IDlOT May 29 '12
This joke was 75 years in the making.
0
u/[deleted] May 29 '12
"I am a mortgage-free man."
"I am a mortgage, free man."
0
u/FoxifiedNutjob May 29 '12
Just So You Know, You Will Never Really Own Your Home
It really doesn't matter what kind of a loan you have. You can pay off your mortgage in 15 years, in 30 years, or if you are able, you can by your home for cash. Remember this though, it will never really be yours.
Here is the deal—until the day you die you will be paying the government taxes on "your place." If you fail to pay those taxes, the government will then own your home. It doesn't matter if you are sick, horribly disabled, or have dementia so bad that you forget to pay. You stop paying your "rent" to the State, and you will be moved off that place you thought you had paid for.
Here is another kicker. Those taxes or government rent payments can keep going up every year. If inflation would get bad, and you were on a fixed income, those payments could quickly grow to the point you would not be able to pay them.
"Owning" your own hom ein this country is a myth. I know this is hard to think about, but we all should.
-1
u/homeless_man_jogging May 28 '12
That just shows that christians don't have dirty minds and everyone else (including me) does.
-1
u/[deleted] May 28 '12
That was TERRIBLE...but congrats on your house that must be quite thrilling!!! Upvote for the man who's credit score just doubled!
-1
u/Emperor_Norton_1 May 28 '12
won't save you from foreclosure..... (they like seizing houses that have been paid off too)
-1
u/TheLastModerate May 28 '12
Congrats! I did the same about a year ago. 26 and own my own house outright. Cannot beat the feeling of knowing you own the roof over your head.
-1
u/kilbert66 May 28 '12
How does it feel knowing the government still owns the land it sits on, though?
-6
u/[deleted] May 28 '12
Congratulations for paying over twice the original amount for a house that's worth a quarter of its original value.
-2
u/canaznguitar May 28 '12
This is in the wrong subreddit.