How I lost my home, 3 stories

[celeb_2006]

http://realestate.msn.com/buying/Art...04117&GT1=9005

Man, this is some depressing reading....

[BoogsBun]

Man, I REALLY shouldn't have read that. Seeing as how we are in the middle of buying a house, and have a sick kid on top of that. Off to find my Xanax..lol

[IceQueen]

This isn't depressing at all - it just pissed me off how stupid people are.

Story 1) Moral - get a prenup and don't ever put all the debt in your name only. He was a fool.

Story 2) Sorry - she couldn't afford the house in the first place, so her best strategy was instead to pop out more kids? Then she lies to her husband about not paying bills. She's been in foreclosure numerous times, and she wants a 'final FINAL' warning before the bank puts the house up for auction? I don't think so. To top it off, she expects that she should be able to stay in the house she no longer owns, and is trying to convince the current owner that the house isn't worth what he bought it for and he should sell it to her for a loss in profit. Whatta maroon!

Story 3) I felt sorry for her a little bit - until I got to this line: "Only one offer came in after about two months, and it had lots of demands attached, such as leaving all the big appliances and the lawn mower" Bitch please. Your house is in foreclosure, you can't feed your kids, and you are concerned about a damn lawn mower and the appliances? You won't need a lawn mower or the appliances in an apartment.

[A*O]

Sigh. There are still a lot of people out there who cannot be trusted with a simple bank account, let alone a mortgage. It's a DEBT when all's said and done and if you can't or won't repay it there will be consequences.

[pacific breeze]

I guess I've never understood why having a house is such a huge deal. If it came to a choice of being financially solvent, or owning a house, it would be a very easy decision for me. The only advantages I can think of are never having to put up with cheap landlords and bad downstairs neighbours, but investing your money properly and owning a house for a long period of time come out about equal money wise.

I know lots of people who are house poor, and if even one of them lost their job, or even part of their job, they would be totally screwed. I couldn't live with that kind of pressure and uncertainty, especially not in this boom/bust province. Plus, I really hate socializing with people who complain about having no money all the time yet they have a huge house with every amenity, brand new cars and take big trips, yet they expect me to subsidize their meals etc.

I did a story on debt collectors when I was a reporter and I've never forgotten what one of them told me: It's not the high cost of living, it's the cost of living high." If you can't afford, don't buy it!

[IceQueen]

A*O - so very true. If you can't afford it, don't buy it. And if you have it already and can't afford it, you need to sell.

PB: I think it is because you can draw a real or an imaginary line on the ground and say 'This is mine'. Like you said, everyone has their own reasons for wanting to own or rent - I like owning because it is mine, but I hate it for the same reason (no maintenance to come fix my toilets!) Renting you have to put up with landlords, a**hole neighbors, and so on. Pluses and minuses for both.

I'm not so sure about the investing part though. We sold a house for $50,000 profit over the course of 2 years (with no money down) - there is no way we could have invested the money and received that kind of return. I'm sure over the long run it works out, but I guess that I focus on short-term ownership if the market is good (and it had been at the time). Even though the market isn't that great now - we are still buying (the owners moved to California and are selling WAY low), but whether or not I sell in a couple years or hold onto it longer depends on the market.

[Lobelia]

IceQueen, I agree completely with your review of the 3 stories.

I think a big part of the lure of home ownership is that no one dictates to you about your home. After owning my own home for years, I cringe at the thought of going back to renting because of the bad memories... poor upkeep, thin walls, noisy neighbors, apartment complexes full of undesirables, not knowing if/when the rent will be raised, and the knowledge that my home is not "mine." Plus, now that I've learned about landscaping & gardening, it's a big part of my life.

I know that my current home is not truly mine until it's paid for, but with a rental, it would never, ever be mine. It's a double-edged sword, though. When you buy a home, you put your heart & soul into it, along with your money, effort & time. But there is always the frightening knowledge that your heart & soul will be deeply hurt if you lose your home. I guess it's like having kids, in that respect.

[pacific breeze]

I agree with everything that's been said about renting and then some because I've thought the same thing thousands of times, but considering that the cost of a home where I live is over a million dollars, and that is generally a "tear down," owning my own home is a pipe dream.

Flipping property can be very lucrative, but it can also go terribly wrong as a lot of people around here have found out. I personally know three people in bankruptcy because of speculating on real estate they couldn't afford to carry, and couldn't rent for a price that could pay their mortgages.

I think it is a very dangerous way to invest unless you have more than enough money to carry all your properties for a minimum of six months if you lose your job, or they don't sell. And even then, I doubt that I would be comfortable with the risk.

There are no sure things in investing, but generally, my investments have performed very well over the years.

[A*O]

It's great if you can make a profit of, say, $50,000 on selling a house you own outright BUT you then have to buy something else and in a rising market that money is quickly absorbed by having to pay a higher price for whatever you buy. $50K is a lot of money, but it's small change in real estate. Look at house prices in your area and compare houses that sell for, say, $300,000 and $350,000 and there probably won't be much difference at all if you compare one house with the other.

Our 'business' is letting out rental properties and we also manage them. Our tenants can phone us any time, day or night, if a problem arises and we will get it fixed within 24 hours if at all possible, no arguments. As a result our tenants are very happy to pay well over the odds in rent because they know their landlord won't quibble about a $50 lightswitch, and will replace a 10yr old dishwasher that starts to leak instead of calling in an engineer to patch it up 10 days later. The tenant is actually paying for all this via his rent anyway so we get a house with a nice new dishwasher when he moves out and the new one moves in. Ditto decorating, etc. The tenants are indirectly paying for it, not the landlord so what they want, they get. Sweet.

[IceQueen]

Exactly - it all comes down to what you are comfortable with (owning or renting), and accepting that with each, you are going to have drawbacks. I must say I would hate to be in a market where I had no hope of owning if I really wanted to own, and if that were the case, like you PB, I'd find other avenues to invest in.

Having houses as an investment is risky, and it does come down to how much of a gamble are you willing to take, and how much homework you have done. I would never suggest going over what you can afford (budgeting is so instrumental, as is including money set aside for emergencies). There are always the unknown variables (market crashes, job loss), and if your risk-tolerance is low, and you don't feel comfortable if you need to ruin your credit and walk away, then I definitely wouldn't advise doing it!

It took me a few years to learn how to watch my local market and determine the best time to sell, and what prices/locations were worth it. I do know some people who tried to flip, but didn't do research in their markets and their homes ended up becoming money pits. They are trying to sell now, but not getting the money they initially hoped for.

Edited to add: AO - but you don't have to buy anything else, we went into a rental and invested our profit. Plus renting allows me to wait out the lows

I wish I had you all as property managers. Mine don't come over for clogged toilets (thanks to my neighbors' kids), and don't do anything about the pests scrambling about. I pay them too much money for a place that 'looks' nice, but really is just a facade.

[pacific breeze]

Originally Posted by A*O

It's great if you can make a profit of, say, $50,000 on selling a house you own outright BUT you then have to buy something else and in a rising market that money is quickly absorbed by having to pay a higher price for whatever you buy. $50K is a lot of money, but it's small change in real estate. Look at house prices in your area and compare houses that sell for, say, $300,000 and $350,000 and there probably won't be much difference at all if you compare one house with the other.

Our 'business' is letting out rental properties and we also manage them. Our tenants can phone us any time, day or night, if a problem arises and we will get it fixed within 24 hours if at all possible, no arguments. As a result our tenants are very happy to pay well over the odds in rent because they know their landlord won't quibble about a $50 lightswitch, and will replace a 10yr old dishwasher that starts to leak instead of calling in an engineer to patch it up 10 days later. The tenant is actually paying for all this via his rent anyway so we get a house with a nice new dishwasher when he moves out and the new one moves in. Ditto decorating, etc. The tenants are indirectly paying for it, not the landlord so what they want, they get. Sweet.

Although the tenant in me shudders at the thought that I am subsidizing somebody else's lifestyle by being gouged on rent, I'd almost prefer it to the situation in Vancouver where rentals are scarce and landlords NEVER feel compelled to do even basic maintenance even on properties they have no intention of selling. For example, the landlords we have now are better than our last ones, but they don't clean gutters, haven't painted the house inside or out in over 15 years, the balcony is basically falling apart and an complete eyesore, the driveway is cracked and full of potholes, and the trees that weren't killed or irreperably damaged by this winter's savage windstorms, haven't been pruned in a long, long time and are diseased and dying. All our applicance are the cheapest possible -- the new washer and dryer started malfunctioning within weeks of installation, the stove doesn't work properly even tho it is only 2 years old, and the dishwasher is barely functional.

The furnace is so old, the repairman actually said he'd never seen one like it in the 25 years!!! he'd been in business. And of course, they won't service it at all and dust circulates through the house aggravating both of us despite the ionizers.

Although they advertised the house as having two working fireplaces, they are in such dire need of cleaning that we can't use them. Both bathrooms need a complete overhaul -- the sink doesn't drain properly in one, and the toilet doesn't flush properly in the other, plus the wallpaper is peeling off in both of them.

When asked about doing any or all of these repairs they literally laughed in our faces. They were forced to fix the gutter that had blown off, but the others remain completely clogged. Did I mention that we live in a rainforest?

They know they can rent it in half an hour when we give our notice -- the market is that tight here -- without spending a dime now or ever. Even though they are an educated Polish couple who travel widely and are quite wealthy, they have absolutely no shame in treating their tenants and property so shabbily. Pride of ownership simply doesn't exist.

They make me sick, but what can we do? This place is still better than the one we left.

[pacific breeze]

And you're right about people selling their homes for a big profit, but then finding out what they can buy with it doesn't go that far. It's especially true where I live as people downsize to retire and then discover that decent condos in nice neighbourhoods start at $6-700,000. Doesn't leave a lot for living that nice retirement lifestyle they had planned.

[IceQueen]

Originally Posted by pacific breeze

And you're right about people selling their homes for a big profit, but then finding out what they can buy with it doesn't go that far. It's especially true where I live as people downsize to retire and then discover that decent condos in nice neighbourhoods start at $6-700,000. Doesn't leave a lot for living that nice retirement lifestyle they had planned.

LOL - I'm cheap. My plan is to retire when I'm 55 in a 55+ mobile home community, or live in an RV. I think that I'll be able to afford that!

[A*O]

Generally speaking, investing in rental property IS a good plan but you have to pick very carefully and be patient. Even in a red hot market you won't get a quick net profit (don't forget capital gains tax) within a couple of years. If you are prepared to wait even 5 years, preferably 10, you should walk away with a tidy sum after tax.

I don't think we 'gouge' our tenants. They are mostly corporate lets anyway so the company pays the rent, not the tenant but even so we try to treat them the way we would wish to be treated when we first came here and rented for 18 months while looking for somehwhere to buy. In any event we charge the 'going rate' but try to give our tenants value for money in terms of prompt and reliable assistance if problems arise. I cannot understand why landlords buy places and then basically let them fall into rack and ruin through laziness, neglect or greed because if the place does become a complete wreck (a) the current tenant will just move out and (b) the only new tenants who will be interested will be a bunch of stoner students who WILL finish the job of trashing the place.

[UndercoverGator]

Uhhh, exactly about waiting. Example; 17 years ago we had our house built for what was then a princely sum of 100K. Now houses in my neighbor sell for three and four times that and turn within a week of being on the market. We bought our house just so that we'd have a solid investment, figuring at least it would hold it's value but hopefully it would increase. To sell and move elsewhere in this area would cost everything we'd get so we've agreed that we're selling only upon retirement and relocated to a much lower cost of living area and pocketing the difference between the two towards retirement costs. It's not just our nest but it's a part of our nest egg as well.