Metaphysx.com

I’ve been a homeowner for about 4 years now. Prior to this, I had always rented apartments.

I can remember back to apartment living. It wasn’t so bad, especially my last one down at Latimer Woods in Bloomington. It was a simple 1-BR with a den, a garage and a wood fireplace.

The three main reasons I moved: 1. I was tired of living in Bloomington, 2. as I planned to return to consulting/working-for-myself in a few years, I wanted to live somewhere easily accessible to Bloomington, Columbus and Indianapolis (the three largest cities in the area), and 3. I was at a stage in my life where I wanted a lot of privacy and therefore wanted to live in the country. Oh, and I suppose a fourth reason was that I had been convinced by everyone that, since I had the means, I should stop throwing away my money and instead pursue the American Dream of buying a house.

Lately I’ve been thinking about moving again, and just assumed that I would again buy. But last night I read Renting Makes More Financial Sense Than Homeownership.

I’m going to have to crunch some numbers, but it makes sense.

I mean, ‘owning’ a home doesn’t mean you don’t have payments to make unless you truly ‘own’ it. Otherwise, you have mortgage payments. The difference between those mortgage payments and rent is basically that buy making mortgage payments you are building equity. While some may live in their house long enough to actually pay it off, I gather most will instead get enough equity such that they can sell it and buy something bigger/nicer. In that sense, you’re making payments every month just as a renter does.

The other difference is to look at buying a home as an investment with the intention of turning a profit. The thing as, according the linked article, despite the housing boom which is now slowing, home selling prices have barely kept up with inflation. So if you buy a house then sell it 5 years later for say $30k more than you paid, on paper it looks like you made a substantial profit. But if you subtract from that the costs of maintenance, repairs, insurance and property taxes, then account for inflation, it seems to me that you barely break even.

And then to look at ‘value’ beyond financial returns, I look around this house and see that it’s way too big. I don’t even have enough furniture to fill it, and two rooms I don’t even use. Further, I have acres of lawn that I never set foot on except to mow the grass.

Anyway, like I said, I’ve got to do some serious number crunching, but some of those lofts up on the canal in Indy look really nice!