# Housing. It's an expense. **URL:** \ **Category:** NYSpeed Off Topic\ **Created:** [December 14, 2009, 7:57am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218 "2009-12-14T07:57:06Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Fry](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/fry/32/7284_2.png) [@Fry](https://forums.speedlife.net/u/Fry)\ **Post date:** [December 14, 2009, 7:57am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/1 "2009-12-14T07:57:06Z")
[quote=“boardjnky4"”] completely disagree, please start a new thread…it will give us something to do [/quote] Not an investment. For example, here’s a typical scenario: Finance $100,000 for a house. $1000/month escrow payment (principle, interest, homeowners insurance.) x 12 months x 5 years =$60,000 dollars Unlikely that the house has appreciated $60k in 5 years, don’t you think? Probably a net loss, although maybe it’s less of a net loss than renting. If it appreciated $30k, then you only spent $30k or $500/month. A lot of rentals will cost you over $500/month. …And, discuss! ---
**Author:** ![Blue\_Eyed\_Devil](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/blue_eyed_devil/32/7292_2.png) [@Blue\_Eyed\_Devil](https://forums.speedlife.net/u/Blue_Eyed_Devil)\ **Post date:** [December 14, 2009, 7:59am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/2 "2009-12-14T07:59:06Z")
You left out a bunch of factors like tax deductions. If I had to live in an apartment I would need psycho therapy which is expensive. WNY has been the worst place a s far as “investment” goes but… ---
**Author:** ![boardjnky4](https://avatars.discourse-cdn.com/v4/letter/b/96bed5/32.png) [@boardjnky4](https://forums.speedlife.net/u/boardjnky4)\ **Post date:** [December 14, 2009, 8:00am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/3 "2009-12-14T08:00:23Z")
Damnit, I am trying to think of my arguement, and I cannot remember how long the previous owner of my house lived there. I think it was around the 5-7 year mark. The house appreciated almost $60k in that time. Also, investement properties can be a money maker. As well as handy-man specials. ---
**Author:** ![Joe](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/joe/32/7219_2.png) [@Joe](https://forums.speedlife.net/u/Joe)\ **Post date:** [December 14, 2009, 8:01am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/4 "2009-12-14T08:01:22Z")
Yep. The best you can expect to do with housing is to be cash-neutral, unless you have a double, and then you’re stuck living in a duplex. That’s like buying a used car. Or unless you hold it for 30 years, in which case investing would have given you better returns. The difference is that since property does appreciate, unlike cars you can hold rental property as an investment. But housing for you = expense. Housing for others = investment. ---
**Author:** ![Geehee](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/geehee/32/7238_2.png) [@Geehee](https://forums.speedlife.net/u/Geehee)\ **Post date:** [December 14, 2009, 8:02am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/5 "2009-12-14T08:02:51Z")
If I stayed at my current place for 5 years it would be less than 1/4 of that expense, and i’m renting. And I live in a pretty nice spot. \<3 Drew. ---
**Author:** ![Joe](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/joe/32/7219_2.png) [@Joe](https://forums.speedlife.net/u/Joe)\ **Post date:** [December 14, 2009, 8:04am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/6 "2009-12-14T08:04:31Z")
You have a special case. Those non-cash considerations you’re giving up to him wouldnt be an option for most people. Especially girls. :gay: ---
**Author:** ![TORQDSS](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/torqdss/32/5125_2.png) [@TORQDSS](https://forums.speedlife.net/u/TORQDSS)\ **Post date:** [December 14, 2009, 8:04am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/7 "2009-12-14T08:04:32Z")
You make your money when you buy it, not when you sell it. factor in the deductions and appreciation and it’s still a net loss more than likely. One major issue is the property tax. here in Cattaraugus county the taxes on that house would be around 5500 or 6000 a year. it’s practically legal theft. ---
**Author:** ![Willybeen](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/willybeen/32/7351_2.png) [@Willybeen](https://forums.speedlife.net/u/Willybeen)\ **Post date:** [December 14, 2009, 8:05am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/8 "2009-12-14T08:05:18Z")
Ok… my argument. Pay cash for a house, 50k, taxes for 5 years are 1200 a year or 6000ish… rent a room out of the house for 500 a month… or 6k a year. Investment = (55000) Income = 6000 a year for 5 years = $30,000 Sell house in 5 years for 75,000 Gross = 75+30-55= 50… or 10% a year… not bad if you asked me… not to mention, you basically lived for free for 4 years… now those numbers are what ifs, but still… more compelling than your argument. ---
**Author:** ![Blue\_Eyed\_Devil](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/blue_eyed_devil/32/7292_2.png) [@Blue\_Eyed\_Devil](https://forums.speedlife.net/u/Blue_Eyed_Devil)\ **Post date:** [December 14, 2009, 8:07am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/9 "2009-12-14T08:07:22Z")
Cash neutral = profit When I sold my last house I made a small “profit” but if you factor in 10 years of rent with no tax deductions I made huuuuge money. I got a $12,000 tax return last year because of my house. That is an extra $1000/ month for those of you that can’t do simple math. How much did you guys get back? 😃 I know this about money but how do you quantify “quality of life”? My 401K gave me no joy and never has. My home is a big part of my retirement but, people say, “What if your home isn’t worth much more than it is now?” To that I say, “If my home decreases your 401K has already shit the bed.” ---
**Author:** ![Geehee](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/geehee/32/7238_2.png) [@Geehee](https://forums.speedlife.net/u/Geehee)\ **Post date:** [December 14, 2009, 8:07am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/10 "2009-12-14T08:07:52Z")
> [@Joe](#): > > You have a special case. Those non-cash considerations you’re giving up to him wouldnt be an option for most people. Especially girls. :gay: I cant help it that I’m good at what I do. ---
**Author:** ![Joe](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/joe/32/7219_2.png) [@Joe](https://forums.speedlife.net/u/Joe)\ **Post date:** [December 14, 2009, 8:12am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/11 "2009-12-14T08:12:23Z")
> [@Blue Eyed Devil](#): > > Cash neutral = profit > > When I sold my last house I made a small “profit” but if you factor in 10 years of rent with no tax deductions I made huuuuge money. > > I got a $12,000 tax return last year because of my house. That is an extra $1000/ month for those of you that can’t do simple math. How much did you guys get back? 😃 > > I know this about money but how do you quantify “quality of life”? My 401K gave me no joy and never has. That’s a lotta mortgage interest :eek: ---
**Author:** ![Blue\_Eyed\_Devil](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/blue_eyed_devil/32/7292_2.png) [@Blue\_Eyed\_Devil](https://forums.speedlife.net/u/Blue_Eyed_Devil)\ **Post date:** [December 14, 2009, 8:13am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/12 "2009-12-14T08:13:40Z")
^And taxes. I just refinanced so next year won’t be the same but I am paying almost $800 less per month on my mortgage now.🙂 Another hard to quantify factor is “sweat equity”. I am lucky to have a killer set of tools and some knowledge which is valuable. If you have to call someone everytime something needs attention or you want to improve something you are screwed basically. ---
**Author:** ![Paulo](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/paulo/32/7328_2.png) [@Paulo](https://forums.speedlife.net/u/Paulo)\ **Post date:** [December 14, 2009, 8:31am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/13 "2009-12-14T08:31:26Z")
> [@Blue Eyed Devil](#): > > I know this about money but how do you quantify “ **quality of life** ”? My 401K gave me no joy and never has. Boom. That and if you rent, you won’t be building equity. So 10-15 years down the road when you want to upgrade and use your equity, you won’t have it and you’ll be paying that much more to try and live in a nicer place. This “investment” goes way beyond 5 years. ---
**Author:** ![TurboTSi](https://avatars.discourse-cdn.com/v4/letter/t/22d042/32.png) [@TurboTSi](https://forums.speedlife.net/u/TurboTSi)\ **Post date:** [December 14, 2009, 8:56am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/14 "2009-12-14T08:56:10Z")
> [@Joe](#): > > Yep. The best you can expect to do with housing is to be cash-neutral, unless you have a double, and then you’re stuck living in a duplex. That’s like buying a used car. > Or unless you hold it for 30 years, in which case investing would have given you better returns. > The difference is that since property does appreciate, unlike cars you can hold rental property as an investment. But housing for you = expense. Housing for others = investment. Sure investing would net you higher returns (my mortgage payment over 30 years at 8% would net me over a million dollars), but that only holds true if you are funding the mortgage and escrow yourself. In a duplex the money comes from the tenants, so you are cash neutral or gain every month. I own two duplex’s and they pay for themselves, I actually bring in $100/mo. above my mortgage and escrow. I could move to a single family home, and plan to do so in 3 years, and when I do, I will be netting $750/mo. EDIT: and I have 15 year mortgages also. ---
**Author:** ![Blue\_Eyed\_Devil](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/blue_eyed_devil/32/7292_2.png) [@Blue\_Eyed\_Devil](https://forums.speedlife.net/u/Blue_Eyed_Devil)\ **Post date:** [December 14, 2009, 9:16am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/15 "2009-12-14T09:16:04Z")
^“Income” property is totally different that is why it is called “income” property. If you don’t make money you are doing it wrong. Another factor is location, location, location. If you buy in Cheektavegas the increase in value is going to be limited. Buying the cheapest house in the best neighborhood is the best thing you can do for return. In some cases you can pretty much demo the entire house then rebuild and you are still better off. ---
**Author:** ![TurboTSi](https://avatars.discourse-cdn.com/v4/letter/t/22d042/32.png) [@TurboTSi](https://forums.speedlife.net/u/TurboTSi)\ **Post date:** [December 14, 2009, 9:26am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/16 "2009-12-14T09:26:39Z")
^ I know, I was just pointing out that Joe’s comment on investing over the 30 years instead of putting the money into the duplex would return more, and how he didn’t take into account the tenants money. ---
**Author:** ![boardjnky4](https://avatars.discourse-cdn.com/v4/letter/b/96bed5/32.png) [@boardjnky4](https://forums.speedlife.net/u/boardjnky4)\ **Post date:** [December 14, 2009, 9:30am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/17 "2009-12-14T09:30:04Z")
Oh, also, you have to remember that taxes are REALLY cheap in a lot of other places. I bet I probably pay ~1/3 the taxes than a comparable home in buffalo. ---
**Author:** ![Blue\_Eyed\_Devil](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/blue_eyed_devil/32/7292_2.png) [@Blue\_Eyed\_Devil](https://forums.speedlife.net/u/Blue_Eyed_Devil)\ **Post date:** [December 14, 2009, 9:33am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/18 "2009-12-14T09:33:35Z")
Another thing about renting is, you are paying taxes(believe me it is included in your rent) you just don’t get the deduction. ---
**Author:** ![Joe](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/joe/32/7219_2.png) [@Joe](https://forums.speedlife.net/u/Joe)\ **Post date:** [December 14, 2009, 9:36am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/19 "2009-12-14T09:36:57Z")
I like to own my appreciating assets and lease my depreciating assets :gotme: TurboTSI i agree, i just worded my other post badly. Owning a double is definitely a solid cashflow position if you don’t have a problem living in it. It’s nice because you can move out and turn it into an income property at your leisure. ---
**Author:** ![JayS](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/jays/32/15375_2.png) [@JayS](https://forums.speedlife.net/u/JayS)\ **Post date:** [December 14, 2009, 9:53am UTC](https://forums.speedlife.net/t/housing-its-an-expense/77218/20 "2009-12-14T09:53:52Z")
> [@Fry"](#): > > Not an investment. > > For example, here’s a typical scenario: > > Finance $100,000 for a house. > $1000/month escrow payment (principle, interest, homeowners insurance.) > x 12 months > x 5 years > =$60,000 dollars > > Unlikely that the house has appreciated $60k in 5 years, don’t you think? > > Probably a net loss, although maybe it’s less of a net loss than renting. If it appreciated $30k, then you only spent $30k or $500/month. A lot of rentals will cost you over $500/month. > > …And, discuss! I see one major item you left off your simple calculations… the fact that your 1000 a month is building equity. Yeah, the part of that $1000 a month you paid toward insurance and taxes is pretty much pissed away (which is a major reason why NYS is fucking you real hard here), but the larger part of it is actually going toward the house. You make it sound like if the house doesn’t appreciate 60k in 5 years that 60k is lost. That formula would only work if the house you were paying on had zero value. [Next page](https://forums.speedlife.net/t/housing-its-an-expense/77218.md?page=2)