Time to Concede Home “Ownership” Is a Fraud | Michael Shedlock | FINANCIAL SENSE.
I’ve been saying this for years. Home ownership is a scam.
Back in 2009, James Altucher wrote an article for the New York Post about this very issue. He lists the additional costs of home ownership that many people fail to consider when purchasing a home, thinking it’s an “investment”:
* Your insurance premium.
* Property taxes (which are usually higher than any tax deduction you get from your mortgage interest).
* Maintenance (pipes break, electricity problems, etc.).
* Utilities (utilities and maintenance for renters is often reflected in the rental price, but it’s not reflected in a mortgage when you own).
* Yard work, pest control, remodeling, etc. (again, rents usually have this built into the price, but mortgages don’t).And let’s not forget those initial costs that always seem to add up to more than you expect:
* A down payment of at least 15 percent, which is $90,000 on a $600,000 home.
* Closing costs, usually 5 percent of loan amount, or another $25,000.
* Initial remodeling costs.
Yes, home prices are down considerably since the crash, despite desperate attempts by the Federal Reserve and the government to prop them up. Still, you must ask yourself if going into this much debt, and paying for all the additional expenses is really worth the effort? My answer is no and that’s why I’ve never owned a home, nor do I ever plan on owning one.
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