Camaro vs House?

[truth411]

Originally Posted by MightyT

As much as I love the Camaro ... House first ...

You get equity (eventually), tax write off (eventually) and joy of fixing things that break (immediately)!

Oh ... and then you'll have a garage to park your Camaro in!!

[truth411]

Originally Posted by CamaroSS_LS3

The #1 priority for anyone should be owning the roof over your head. Sorry but I think anyone who buys a car before a house is a fool. Cars are not investments except for maybe just a few exotic exceptions which if you could afford one of those you would not be asking this question because you would already have a house.

When you rent you pay someone else mortgage. When you buy your paying into your own equity.

Sorry I have to disagree with you here. You are ignoreing that different people are in different stages of life. For an example, I am single, Not married and no children, I don't need 4 bedrooms and 2 bathroom and 3 car garage. Right now I am in an apartment, the benifts is that I don't have $4,000 a year of property taxes to pay. I don't have waste money on interest rates and insurance either and maintenance is much cheaper. Don't get me wrong, I have the money to buy a house at any time. But lets be real here, with ones morgage payment, roughly HALF of it goes to the actual principle depending on what type of loan you get, the other half is just burned away (intrest rates, insurance, property taxes). IMHO people should stop looking at a house as soley finacial investment, but a place one raise there family for the next 20-30 years, you can't put a price tag on that. Looking at from a strictly financial side, Renting an apartment and investing is far more effiecient, when looking at strict numbers.

[Brokinarrow]

Originally Posted by truth411

Sorry I have to disagree with you here. You are ignoreing that different people are in different stages of life. For an example, I am single, Not married and no children, I don't need 4 bedrooms and 2 bathroom and 3 car garage. Right now I am in an apartment, the benifts is that I don't have $4,000 a year of property taxes to pay. I don't have waste money on interest rates and insurance either and maintenance is much cheaper. Don't get me wrong, I have the money to buy a house at any time. But lets be real here, with ones morgage payment, roughly HALF of it goes to the actual principle depending on what type of loan you get, the other half is just burned away (intrest rates, insurance, property taxes). IMHO people should stop looking at a house as soley finacial investment, but a place one raise there family for the next 20-30 years, you can't put a price tag on that. Looking at from a strictly financial side, Renting an apartment and investing is far more effiecient, when looking at strict numbers.

But you're also not making an investment. Paying rent is just throwing away money (unless its a rent to own situation), paying for mortgage is investing it. And you don't have to spring for a huge house right away, get something that fits your needs. Or if you do have extra bedrooms, find a roomie! That way THEY can throw away THEIR money for YOUR mortgage

[Scooter]

House, then Camaro, MisterCamaro69 said it best!!!!

[montej23]

house i vote

[CamaroSS_LS3]

Originally Posted by truth411

Sorry I have to disagree with you here. You are ignoreing that different people are in different stages of life. For an example, I am single, Not married and no children, I don't need 4 bedrooms and 2 bathroom and 3 car garage. Right now I am in an apartment, the benifts is that I don't have $4,000 a year of property taxes to pay. I don't have waste money on interest rates and insurance either and maintenance is much cheaper. Don't get me wrong, I have the money to buy a house at any time. But lets be real here, with ones morgage payment, roughly HALF of it goes to the actual principle depending on what type of loan you get, the other half is just burned away (intrest rates, insurance, property taxes). IMHO people should stop looking at a house as soley finacial investment, but a place one raise there family for the next 20-30 years, you can't put a price tag on that. Looking at from a strictly financial side, Renting an apartment and investing is far more effiecient, when looking at strict numbers.

As a single person you don’t buy a 3000 SQ FT 4 bedroom 3 stall garage house in an expensive tax district. You buy a much less expensive 1800 SQ FT 3 or 2 bedroom house with a one or 2 stall garage in a reasonable tax district such as a city school district, if you don’t have kids there is no need to worry too much about the school district. You itemize your deductions on your taxes including your mortgage interest.

I never had kids although I did get married. I bought my first little house when I was 23. I sold it 4 years later and made $20,000 after realtor fees. I sold my second house again after 4 years and made an additional $20,000. I’m on my 3rd house at 45 worth a little over $250,000 and will have it paid off in 5 years. As long as you keep up your credit score you will always get low interest rates. You should also always try to make extra payments to pay down the principal quicker so you pay less interest in the long run. Granted in this economy at this point in time you can’t expect much if any appreciation for a few years but you will build equity.

I don’t want to debate this much more but my grandmother had the same attitude as you do and she died penny less having always rented and never built any equity. In 5 more years I will own the home I’m in and then my options are wide open, if I get tired of the rat race I can quit my tuff job and work menial jobs to simply pay the utilities and food.

It may make sense to rent for many people but don’t under estimate the value of buying your own home.

[rolnslo]

Originally Posted by Brokinarrow

But you're also not making an investment. Paying rent is just throwing away money (unless its a rent to own situation), paying for mortgage is investing it. And you don't have to spring for a huge house right away, get something that fits your needs. Or if you do have extra bedrooms, find a roomie! That way THEY can throw away THEIR money for YOUR mortgage

This is the funny thing about our society. We consider renting a bad thing because you are throwing away your money every month but how come everyone considers buying a house an investment?

If anyone actually stays in the same house for 30 years and makes regular scheduled monthly payments the entire time, you actually end up paying the amount financed twice, once for principle and again in interest.

On a loan of $150,000.00, with an interest rate of 5.25% for 30 years, your monthly payment is $828.31. At the end of your term, you will have paid $150,000.00 in principal and $148,190.00 in interest for a total payment of $298,190.00.

That does not include all the taxes, insurance, maintenance, HOA dues, closing costs, etc...

Now how is that, as an investment, better than renting? Let me give you $300,000 in exchange for something that is only worth $150,000.


I'm guilty of it, just like most of us here are. Just something to think about....

[P. Ham]

Why am I listening to you guys. Ya'll have a cool car already. It's easy for you to say hold off. No seriously. Thank you for the responses!!! I'm a little teary-eyed. I never thought I would get this advice from a Camaro site. I sort of knew this was the type of responses I would get. I'm not gonna lie. I'm a bit sad. I was hoping you guys and gals would say I can simply do both.

To give you a little more idea of my situation, I've been working for a small architectural firm for over 10 years now doing 3D visualization. I LOVE my job. One thing I know for sure, if you don't like your job find a new one. I'm lucky that I like what I do. But! I'm told I don't really make all that much money. And it's probably true. I don't know. I can't compare to anything else because this is the only job I've had. We don't have 401k so I decided setup an IRA about 6 years ago. And who knows, being a small company we could fold in a year or two.

But here's the thing. I paid off my first car in less than two years so I have never really had to budget. I feel I need to develop those skills first before getting a house, No? Maybe I don't pay the car in full and give myself a monthly payment that'll force me to budget. What concerns me is that if I go the house route it may be a "shock to the system". For example, I'm able to easily put 5k away to my IRA. If I get a house, am I ever going to be able to do that? Most people tell me those days will be long gone. It may be a long time before I'm going to be able to afford a car like this with a house payment? Am I worrying to much?

I'll save you guys time and answer my own question. I need to do my research. I guess what I need to do is find out what the going rate is for a newish small house here. A condo or town home sounds like it might be a good option as well for the convenience factor. What I would like to do is talk to someone to see realistically what I would be paying monthly. I don't know if I could handle anything over $800 - $900 with my income and still make a car payment. Should I start talking to a real estate agent to see my options? Can I trust their advice or are they going to tell me what I want to hear just to sell me a home? Is the goal to put 20% down? I have a lot to think about.

A month ago I was stressing out over the color of the Camaro before I ordered it. Now I may have to make the call to cancel it. Life can be so cruel. :(

[kjd15]

You have to do what's best for you. Only you know what you can manage financially.

[Stewcam]

Originally Posted by rolnslo

So, I'll throw out a few things for you to consider...

1. Property taxes in Texas suck! Depending on where you buy, expect to pay between 2% and 4% of the value of the house every year in taxes. Buying new? Expect to be closer to the middle to upper end of that spectrum. I live near Houston but in a rural area outside of a subdivision. My tax rate is 2.14% or just over $2400 a year ($200/mo) and I live in a modest $115k house on 1.25 acres.

2. Depending on your income level and the amount you finance to buy a house, the income tax advantages of being able to write off mortgage interest are questionable, at best. I'm married and for the last 2 years, I've barely cleared (less than $500 difference) the standard income tax deduction by itemizing my tax return to be able to count the amount of money I spent on mortgage interest and property taxes. I could rent and pay no mortgage interest and come out about the same when paying income taxes.

3. Housing prices in Texas will never reach the levels seen in the rest of the country. San Antonio and Houston are prime examples of urban sprawl. Rather the containing growth, they'll just build more roads that go farther out from the center of town and then fill in the empty space with more subdivisions filled with affordable new homes (built by inexpensive sub-contractors). All those new homes keep existing home prices down. Don't let people try to scare you into buying now because prices are down. Hell, in Texas, they're always down...It's part of why I left the housing bubble in Seattle a little over 4 years ago. I bought nearly the same thing (age, size, land, build quality) my sister did up there but down here in Texas, I paid less than half of what she did.

4. It's a lot easier to sell your car and break an apartment lease if you get into financial trouble (i.e., lose your job) than it is to sell your house. Sure, your car is a depreciating monster but there is always someone (Carmax) that will buy it from you on short notice. Try that with a house and you'll find it difficult to do. To be able to sell your house, you either have to have enough cash or equity to pay off the mortgage plus pay all the closing costs and realtor fees. If you only pay the scheduled mortgage payment, it takes years to build up enough equity to do that. For example, my affordable $115k house that I bought over 3 and 1/2 years ago has only been paid down $4k on the original loan balance despite monthly payments in the range of $1100-$1200.


Just thought I'd throw that out there for something to think about. If you can get an apartment with a garage, you've got 80% of what you'd have in a house. The only thing missing is long term equity building but you could also do that with a savings or investment account instead.

That is the way I see it also (see my earlier post). My tax rate in the Woodlands is about 3.3% and you and I know that the Texas market in the past even in good times barely beats the tax rate (not including all of the maintenance costs here in Texas because all of the rain and humidity). Buy the car and buy a cheap lot on the east or west coast if you want to take advantage of the low housing market and build equity. You won't build any appreciable equity in Texas......

[truth411]

Originally Posted by rolnslo

This is the funny thing about our society. We consider renting a bad thing because you are throwing away your money every month but how come everyone considers buying a house an investment?

If anyone actually stays in the same house for 30 years and makes regular scheduled monthly payments the entire time, you actually end up paying the amount financed twice, once for principle and again in interest.



That does not include all the taxes, insurance, maintenance, HOA dues, closing costs, etc...

Now how is that, as an investment, better than renting? Let me give you $300,000 in exchange for something that is only worth $150,000.


I'm guilty of it, just like most of us here are. Just something to think about....

that is why I said, looking at home ownership as soley a finacial investment is completely flawed.

[Stewcam]

Originally Posted by truth411

that is why I said, looking at home ownership as soley a finacial investment is completely flawed.

Obviously if everyone thought like us we would not be in this financial crisis from the get rich quick "flip this house" craze. Looks like most people don't understand the math and can't determine that all you do is pay interest for the first third of a mortgage and you only get to write off your tax rate of that if you are lucky. Houses are good to live in but historically have been poor "cash on cash" return investments. Plus, as we have all said right now they have almost no liquidity.

[DallasRetro]

Buying a house is the best investment most people will ever make!

If you have a good dependable car, buy a home now, and by the time you need to get another car, your income will probably have increased. Then since your housing cost should be about the same, (rent keeps going up!), and you make more money, buy a new car (or better yet, buy a demo and save some more money!).

A general 'Rule of Thumb' to remember: A home payment usually won't keep you from getting a car loan, but a car loan will often keep you from getting a home loan!

[DallasRetro]

Originally Posted by Brokinarrow

And stay away from HOAs, they are evil!

I second that... JUST SAY NO to HOAs!!