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HOT TOPIC Convince me to Not Buy a Home

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I'm sorry you live in California. I lived there for 12 years and will never go back now that it's a haven for everything indecent and unAmerican in the Universe. Did I mention how much I detest the coastal Cali culture?

:)
Just out of pure curiosity: What exactly is the coastal Cali culture you're refering to? To me California always has been as american as it gets. We went there on our honeymoon and to me it's one of the nicest places on earth with all the nature, great Canyon roads, beach, all that Tech and StartUp in Silicon Valley, .... I always considered living there and sometimes still dream about it. Is my Picture completely wrong? Is it actually nothing like I imagine it to be? What makes living there so horrible in your opinion, that you're even afraid of getting discriminated? As a German I really have not idea. Asking both of you @HelpAndProsper @LaraJF
 

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W0rkb3nch

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If you cant pay cash you cant afford it. My one rule I live by. I'm 35 and own my house outright. That frees up my money to work for me and not pay for a mortgage or interest. Buy a cheap piece of crap and fix it up. save some money and flip it into your next house. Always pay cash.
I don't think it's as black and white as that. You can leverage low interest mortgage loans to benefit from increasing house prices. When you have solid equity, if you really wanted to sell up and downsize to buy your home outright then you can, hand the difference back to the bank.
 

JScott

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Just out of pure curiosity: What exactly is the coastal Cali culture you're refering to? To me California always has been as american as it gets. We went there on our honeymoon and to me it's one of the nicest places on earth with all the nature, great Canyon roads, beach, all that Tech and StartUp in Silicon Valley, .... I always considered living there and sometimes still dream about it. Is my Picture completely wrong? Is it actually nothing like I imagine it to be? What makes living there so horrible in your opinion, that you're even afraid of getting discriminated? As a German I really have not idea. Asking both of you @HelpAndProsper @LaraJF
I lived there for about 10 years. It was the most entrepreneurial place I've ever been, the people are super smart, the scenery is beautiful, the weather is great and the access to new technology is unmatchable anywhere else. There are certainly downsides, but I don't really understand the "indecent and unAmerican" comment either...
 

LaraJF

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Silicon Valley, California
I could tell you about potholes, about the incredible closed-minded people (agree with me or else), the actual costs of sanctuary cities and "undocumented workers." The people who vote for Bond Issues thinking they're making things wonderful when they're raising taxes. Then they move because it's too expensive to live here and leave us holding the tax burden.

But, this thread isn't about that. So I won't. I could write a book about the reality of this "paradise." I've lived in Silicon Valley since 1976. I've seen the changes, good and bad.
 

MTEE1985

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If I were to comment on a location standpoint alone and having grown up 10 minutes away from the OP (in Durham, NH) Portsmouth is a beautiful town and becoming a nice little hotspot for companies not wanting to set up shop in Boston so any top of the market fears would be of little concern to me, especially if you plan on being there long term.
 
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HelpAndProsper

HelpAndProsper

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I could tell you about potholes, about the incredible closed-minded people (agree with me or else), the actual costs of sanctuary cities and "undocumented workers." The people who vote for Bond Issues thinking they're making things wonderful when they're raising taxes. Then they move because it's too expensive to live here and leave us holding the tax burden.

But, this thread isn't about that. So I won't. I could write a book about the reality of this "paradise." I've lived in Silicon Valley since 1976. I've seen the changes, good and bad.
Thank You. The state has the most violent, anti-American hateful population I've ever seen. If you like burning American flags, spitting on American veterans, high taxes, elitist Hollywood idiots with gates around their houses telling you to not own a gun, shouting down and violently attacking any speaker on a Cali college campus that doesn't believe in socialism then it's a great state for you....

In addition, compared to the rest of America, people in general are flaky in Cali. They act nice to your face, but are not dependable. The East Coast, Midwest, etc. in USA have much more solid, dependable people IMO.

The whole state should split off from the USA. The rest of the country mostly despises the state. The weather there is fabulous and San Francisco is a gorgeous city if you can step over the mound of heroin needles and homeless bums. The culture and people are awful for the most part...

That's my opinion and I'm sticking to it.

I lived there for 12 years. I feel I have a solid basis for my opinion.
 

Thoelt53

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Thank You. The state has the most violent, anti-American hateful population I've ever seen. If you like burning American flags, spitting on American veterans, high taxes, elitist Hollywood idiots with gates around their houses telling you to not own a gun, shouting down and violently attacking any speaker on a Cali college campus that doesn't believe in socialism then it's a great state for you....

In addition, compared to the rest of America, people in general are flaky in Cali. They act nice to your face, but are not dependable. The East Coast, Midwest, etc. in USA have much more solid, dependable people IMO.

The whole state should split off from the USA. The rest of the country mostly despises the state. The weather there is fabulous and San Francisco is a gorgeous city if you can step over the mound of heroin needles and homeless bums. The culture and people are awful for the most part...

That's my opinion and I'm sticking to it.

I lived there for 12 years. I feel I have a solid basis for my opinion.
Going from Cali to Boston must have been a culture shock...

The politics aren't much different, however.
 

DustinH

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We have a huge influx of people moving from California into Nashville. Every time I talk to them I ask them why. They say the same reasons: taxes too high, cost of living is ridiculous, real estate unaffordable, the politics are out of touch, the infrastructure is in disrepair, too much traffic, etc. etc.

The Nashville area’s claim to increase in population by 100 people per day took a hit with the release this week of new population estimates from the U.S. Census Bureau.

800,000 people are about to flee New York and California because of taxes

Movement Out of California Was the Most Influential Driver of U.S. Migration Patterns

Leaving California? After slowing, the trend intensifies
 

Elif

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Jun 25, 2018
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How does your cashflow situation change from renting to buying? If its the same I would buy, keep in mind maintenance, taxes, water bill, heat bills, etc...
 

Tourmaline

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I am curious to why you are against a mortgage. You're paying the government for the right to "own" the property (property taxes). You're paying an insurance company for replacing anything that gets damaged (homeowners insurance). You pay the neighborhood for god-knows-what (homeowners association fees). That probably adds up to $500-$700 a month, anyways. So, is a mortgage really that bad?

The tax advantages for a mortgage are there (FYI I'm not a mortgage broker).
Mortgage Principal - not deductible
Mortgage Interest - Tax Deductible
Property Taxes - Tax Deductible (up to $10,000/yr)

Insurance - not deductible
HOA fees - not deductible
Rent - not tax deductible

On a 30-yr fixed mortgage you will pay more in interest in the first 15 years than principal. So, the tax advantage is there. Especially in the first few years.

Also, calculate how much money you have to make to pay your rent vs paying a mortgage.

Let's say your effective tax rate is 25%. So, when you make $100, $25 go to taxes and you keep $75.

Rent = $2,000 then you have to make $2,667 to pay your rent.

Mortgage = $2,000 (principal = $500, interest = $1,500 in the beginning with 30yr fixed)
then you have to make $667 to pa your principal and $1,500 to pay your interest
So, you have to make $2,167 to pay your $2,000 mortgage

The $2,167 you need to make to pay your mortgage compared to the $2,667 to pay your rent sounds like a better deal to me.

Then, if you add in the fact that the $500 principal goes into your equity, which is money you will get back if you sell it. Rent is money you will never get back.

A mortgage loan is setup as an advantageous tool. The tax advantages and the incredibly long financing term are impossible to find anywhere else. You can't borrow money to buy stocks or a business and have 30 years to pay it back at the lowest interest rate available amongst the entire consumer debt spectrum.
I never considered the tax advantages. That's not insignificant at all. It's even more significant if you have a higher tax rate too!

The only major downside to me is tying up so much capital instead of pumping it into business instead.

$50k down but 25% savings in living costs

vs

$50k making money but 25% increased living costs
 

elusive97

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I never considered the tax advantages. That's not insignificant at all. It's even more significant if you have a higher tax rate too!

The only major downside to me is tying up so much capital instead of pumping it into business instead.

$50k down but 25% savings in living costs

vs

$50k making money but 25% increased living costs
Don't do it! At least not until you're like 1000% sure your finances are tip-top. I tied up tonnes of money into a house that's ended up being a money pit and almost 3 years later I'm still not on track - such a big regret. You can always invest more of that money into business when you're confident it will increase the amount. Making and investing money is always easier when you have cash in the bank and aren't at a low amount
 

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