Purchasing a house

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BoogieMonster (October 25, 2011, 09:45:13 AM):
Indeed BUT a property owner does not get yearly increases like a renter does. He pays a flat fee p/m for 20 years (in theory) plus or minus rate adjustments. The first 3 years or so is the real bitch. The trick is one must have enough income to surmount those 1st couple of years. And trust me as someone who bought a property in the last year, that first year is a b****. The transfer fees, lawer fees, rates, levies, utilities... add up to a crapload really quick. As a single person, owning property is a very hard thing to do, and I don't see it getting easier in future. Sadly, I don't live in the time of my parents when these things were much more possible for middle-class families.
Faerie (October 25, 2011, 10:55:34 AM):
Indeed BUT a property owner does not get yearly increases like a renter does. He pays a flat fee p/m for 20 years (in theory) plus or minus rate adjustments. The first 3 years or so is the real bitch. The trick is one must have enough income to surmount those 1st couple of years. And trust me as someone who bought a property in the last year, that first year is a b****. The transfer fees, lawer fees, rates, levies, utilities... add up to a crapload really quick. As a single person, owning property is a very hard thing to do, and I don't see it getting easier in future. Sadly, I don't live in the time of my parents when these things were much more possible for middle-class families.
I agree with Boogie. I bought my first house at age 23, and managed subsequently to upgrade every 7 - 8 years. My last house I paid up within 7 years and I didnt intend to buy again until the S/O waltzed into my life and upset everything. Not that I mind. It was a much more complicated process this time around, and far more expensive than any of my previous homes cost (I'm not referring to the actual purchase price here). It is still, imo, a worthwhile investment, paying rent never did it for me, and the knowledge that "home" will remain so until I decide differently brings a sense of security to my life. Nobody can give me notice and I dont have to abide with anybody else's rules either. If you can afford any type of home at this point of time - regardless of how small - go for it, pay it off as fast as possible and upgrade. The interest rates are the lowest its been for years, and you can fix it for two years which would give you some security initially. If you're a first time buyer, you'll most likely be considered for a 100% loan, and you'll only need to scrape together attorneys/transfer fees. Go have a look at the various bank's sites for "distressed" properties, some good bargains there.
steveweiss (October 25, 2011, 13:14:41 PM):
There are advantages to "homeownership" over time, but one is also exposed to fluctuating interest rates, increasing rates and taxes, changing neigbourhoods, maintenance costs, economic recessions and illiquidity. Being a financial adviser with Discovery I think that one should also include the cost of bond cancellation cover in the event of death and disability as part of the cost picture. Every individual is different and has different priorities, so one must weigh one set of values against others. I personally prefer ownership (shared with the bank which lent me the money) but that is not a one size fits all prescription. One's age, income, family responsibilities, health, job stability and other factors may result in one option being preferable to another.
GCG (October 25, 2011, 13:29:39 PM):
i would love to own a house. what i can afford, is a matchbox. matchboxes dont allow dogs, cats, rats, etc. thus, rental it is for me.
BoogieMonster (October 25, 2011, 14:27:02 PM):
Almost forgot to mention, you get to keep a portion of the money. Yes as you point out, in an illiquid asset. But still. It helps to pay for your dwellings in the future too.

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