The Generation of No Homeownership

1 Comment 🕔12:40, 23.Sep 2013

Generation Y may be the first generation to shun the social norm and social pressures of homeownership. Face it, it has been drilled into us from day one that the American dream is built around the family and the family is built around the white picket fence, which surrounds the home the family owns. Now, there are pros and cons to owning and not owning a home and voicing opinion in favor of one or the other will most certainly ensure a shitstorm of comments from people explaining how stupid you must be to think such things…

So, coming from a real estate back ground and being raised in a family of both residential and commercial real estate developers and landowners/landlords, I think I’m somewhat qualified to speak intelligently about the pros and cons of homeownership and real estate as a whole. Am I an expert? No. Am I an investor? No. Can I voice my opinion on the matter? Fuck yes.

Since it is the social norm to think you need to own a home and since I hate social norms, I’m going to break the mold and explain why I think it is idiotic to own a home and why many Millennials are catching to this concept. Now, full disclaimer, I own real estate and of course a home, so bad example here, but that doesn’t make my argument any less valid. It doesn’t mean I don’t envy that lifestyle…and yes, I just called myself idiotic. Hey, I can be self-depreciating and many said I’m a walking contradiction so it fits I guess.

I break down homeownership into four categories; Financial, Maintenance, Taxes and Freedom. This is in no particular order since it’s different for each person. For instance, Freedom would be number one for me, followed by Maintenance, Taxes and then finally Finance. There are many subsets of each, which we’ll get to along the way, but these are the biggies. Let’s dive in, shall we?

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Finance

No matter you cut it, the cash is gone. A little or a lot, but it’s gone. BTW, the home you live is NEVER an INVESTMENT. NEVER. Also, Just a little a stat for you, Housing returned 0.4% per year from 1890 to 2004 and that’s just housing prices. Wait. I hear it now. Equity. All that equity I got from my home. Oh yeah? What are going to do with it when you sell the home you live in? Gee, I don’t know, downpayment on another home to live in… I’m speaking in generalities here. Most are like this. Not all, just most. As with all things, there are outliers.

Wait, investment mantra I hear again? Crap. Look, where’s the liquidity? A house worth $500K on paper, but in reality it’s only worth how much someone is willing to pay for it. So, it’s not liquid assets, it’s something you think is worth X and hoping someone else thinks the same and is willing to give you X in a relatively short period of time. Here’s to hope!

Oh, you don’t have $500K for that home? That’s unfortunate. I have an idea; you can borrow it from someone else and pay him or her more over time. Or if you do have it, give them a huge chunk of money that could be used on better “investments.”

Why do I need an agent? What a waste of money. What about these closing costs? All these little things add up, again, money lost and out the door, never to return.

Maintenance

The mother fucking death of first time homebuyers. This single handedly has killed more neighborhoods and drowned more people or put them upside down in homes than anything else. Why? They never planned for keeping up the home. They wanted to get the absolute biggest fucking house they couldn’t afford and some slimy mortgage broker squeezed every penny out of their paycheck to qualify them for a loan they never should have got so they could live there. Then, they realize they need to keep the place up and play bills, etc… guess what? The house goes to shit, they tap the equity and then they go underwater. You’re responsible for EVERYTHING. Roof, easily $15,000 and up depending on size and type. This is every 15 to 20 years IF you keep it maintained properly. Siding, painting, landscaping, water/sewer, gas, electric, garbage, HOA, appliances, anything indoors…you get the idea. They all break, all the time. Always something to do. If it’s not the house, it’s the car.

Taxes

Taxes. Everyone hates to pay them, but taxes on the land you own? Taxes each and every year on property you rightly purchased and paid taxes on initially? You pay taxes on the income you make to purchase the home. Now you want me to pay taxes every year for the pleasure of having my own property? The Founding Fathers actually opposed property taxes, yet here we are.

Depending which county in Oregon one’s living in you can be paying as much as a 75% more for living in the exact same home, but just living on the wrong side of the street. These don’t go away and they only increase each and every year. Every time someone brags about how much their home increases in value, ask them how much their taxes increased and when they plan on selling since obviously they see their home as an investment…

Freedom

This is the most important one for me. The no strings, not trapped and can leave and go anywhere I want whenever I want…yeah right. I’d be a shitty Dad and husband if I did that. However, the illusion and notion of freedom is the allure to me, to us all I guess. For the most part, I really think that it is within grasp, as I would simply take them along. Anyway, back to the story at hand.

First and foremost, homeownership was initially being push on the American people by corporations like drug dealers peddling pot to high school kids as the corporations wanted more control over their work staff. Call me cynical.

Can’t exactly pick up and go. Everything is tied to your credit now days…ever see what happens when someone defaults on a mortgage? Well, I highly advise against experimenting. You’re better off not paying your credit card bills and car payments before missing mortgage payments. So, tethered again. Need to sell in this economy? Housing market booming they say? For some, maybe. Then again, I know many that can’t sell for over six months now and that’s with three price adjustments and in some of the nicest areas in the city…

From a psychological standpoint I like to know that if I want to pack up shop and relocate for a new job a new life or whatever, I can do so with ease and with a little disruption. No WAY with a house. I want the choice. As crazy as the choices are and how I may never exercise these choices, I still need them to be a possibility.

Time. I value my time and I don’t really like using my brain power fixing a faucet and I don’t really like spending money on fixing a roof or watching a guy fix my roof because I can’t trust that they’ll get it done right.

Stress. This is a biggie as well. Homeownership is stressful as hell. It will change everything for you. You will remain at a job you hate just because you can’t lose your job or you’ll lose your home. You will take shit from people you hate just because you have to keep your home.

There is no real king anymore. Cash used to be, but that’s debatable now. Gold, possibly. Silver, maybe. Who knows. You can live by Mark Twain–whom I love and admire–and think “buy property, God isn’t making any more of it,” or you can let someone else adhere to that philosophy and simply rent.

My two cents.

R

About Author

Ryan

Ryan

Entrepreneur, Technologist, Computing Strategist, Designer, Writer

1 Comments

  1. 🕔 12:20, 25.Oct 2016

    Gentlewatch

    Thanks for the post, Ryan! I am in agreement. I explore in my blog: http://www.adonmoss.com/single-post/2016/10/24/Should-I-Buy-My-Dream-Home-Or-Rent-It that renting is a more advantageous approach.

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