I Hate Being a Homeowner

//I Hate Being a Homeowner

I Hate Being a Homeowner

No one really talks about it, but I hate being a homeowner.  Nope, I hate it.  I hate it so much that I used a color font for probably the second time in the 8 years of running this site.  Since purchasing my home I have had to:

  • Do masonry work on my fireplace since starting a fire made my house reek of smoke
  • Convert from oil to gas after calculating the exact amount I’d save converting from oil to gas heat
  • Replace boards in my deck from rotting
  • Redo my whole upstairs insulation
  • When the foundation allowed seepage during a ridiculously heavy rain storm coupled with a loose gutter I had to replace carpeting I installed when we moved in 18 months earlier
  • Replace my Air Conditioning Condenser
  • Fix a whole in the drainage pipe that ushers all the water out of my house

That’s just the stuff that was out of the ordinary and I remembered when writing this post.  See those last two? The AC happened 4 days ago at a price of $2,700 (cash of course) and then the pipe happened yesterday – obviously they were the muse for the post.

I will say right off the bat, I am not going to do anything about my hatred.  Zero.  Instead I get to just bitch about it anonymously on the internet (along with anyone else that asks).

The Only Two Benefits of Home Ownership I can Come up With

There are literally two benefits I can come up with for owning a home, the first is, and probably the reason homeowners likely have a higher net worth is that paying your mortgage is a forced savings mechanism.  Since I am not going into foreclosure anytime soon the equity in my home keeps going up.   Is it s a fast process? Nope, but it is something.

Effective DateReversalPayment TotalUnpaid BalancePaid Through DatePrincipalInterestEscrowLate ChargeUnapplied FundsOther Amount
06/15/2015$64.09$369,592.9406/01/2015$64.090.00$0.00$0.00$0.00$0.00
06/15/2015$2,935.91$369,657.0306/01/2015$673.771041.56$1,220.58$0.00$0.00$0.00
05/15/2015$2,935.91$370,330.8005/01/2015$671.881043.45$1,220.58$0.00$0.00$0.00
04/13/2015$26.65$371,002.6804/01/2015$26.650.00$0.00$0.00$0.00$0.00
04/13/2015$2,873.35$371,029.3304/01/2015$669.931045.40$1,158.02$0.00$0.00$0.00
03/13/2015$26.65$371,699.2603/01/2015$26.650.00$0.00$0.00$0.00$0.00
03/13/2015$2,873.35$371,725.9103/01/2015$667.971047.36$1,158.02$0.00$0.00$0.00
02/13/2015$26.65$372,393.8802/01/2015$26.650.00$0.00$0.00$0.00$0.00
02/13/2015$2,873.35$372,420.5302/01/2015$666.021049.31$1,158.02$0.00$0.00$0.00
01/13/2015$2,873.35$373,086.5501/01/2015$664.161051.17$1,158.02$0.00$0.00$0.00
12/15/2014$2,873.35$373,750.7112/01/2014$662.291053.04$1,158.02$0.00$0.00$0.00
11/14/2014$2,873.35$374,413.0011/01/2014$660.441054.89$1,158.02$0.00$0.00$0.00
10/15/2014$2,873.35$375,073.4410/01/2014$658.581056.75$1,158.02$0.00$0.00$0.00
09/08/2014$2,873.35$375,732.0209/01/2014$656.741058.59$1,158.02$0.00$0.00$0.00
08/13/2014$2,873.35$376,388.7608/01/2014$654.891060.44$1,158.02$0.00$0.00$0.00
07/15/2014$2,873.35$377,043.6507/01/2014$653.061062.27$1,158.02$0.00$0.00$0.00
06/16/2014$2,873.35$377,696.7106/01/2014$651.231064.10$1,158.02$0.00$0.00$0.00
05/13/2014$2,873.35$378,347.9405/01/2014$649.401065.93$1,158.02$0.00$0.00$0.00
04/15/2014$2,873.35$378,997.3404/01/2014$647.581067.75$1,158.02$0.00$0.00$0.00
03/11/2014$2,924.61$379,644.9203/01/2014$645.761069.57$1,209.28$0.00$0.00$0.00
02/18/2014$2,924.61$380,290.6802/01/2014$643.951071.38$1,209.28$0.00$0.00$0.00
01/14/2014$2,924.61$380,934.6301/01/2014$642.151073.18$1,209.28$0.00$0.00$0.00
12/16/2013$2,924.61$381,576.7812/01/2013$640.341074.99$1,209.28$0.00$0.00$0.00
11/15/2013$2,924.61$382,217.1211/01/2013$638.551076.78$1,209.28$0.00$0.00$0.00

 

The second benefit I can think of is stability.  I am not minimizing the aspect of stability, especially for children, I just don’t know to quantify it.  But, if I had to be honest with myself this is likely the reason I will be doing nothing about this rant.   The Wife and the 2 children deserve a place that they feel comfortable in that is theirs.

The Cons of Home Ownership are Numerous

I am obviously pretty heated about the topic, but imagine I offered you an “investment” that:

  • Is highly illiquid
  • If you do sell there are tremendous surrender charge like fees
  • At any time I can ask you to put more money into it that may or may not raise your principal investment, but if you don’t put that money your principal investment will go down QUICKLY (go check out that list up at the top again)
  • On going interest charges for 30 or so years
  • You will be taxed on the value of the investment every year
  • Will literally never throw off income
  • Every month/year you will have to give me more money and if you don’t you almost everything you put in
  • Taking everything into account above it is very likely you’ll have a negative internal rate of return for 10 or so years

What would you say to me? Go F’ myself? Probably.  But for some reason, society deems home ownership to be “different.”  This is the same society that says we should work our asses off from age 22 to 67 so we can REALLY enjoy 67 to 90.

Another problem the cons listed above about whether it is an “asset” can be applied to the non-investment nature of the home.

For one, you are absolutely stuck as your home isn’t going anywhere (maybe this a pro for some people) – I like to believe I am someone who can pick up and go, but I haven’t left Long Island to live…ever.  For another you are in constant hamster wheel of disrepair.  Inevitably things break, and you must fix them otherwise shit hits the fan.  Who lives in a home without furniture besides Steve Jobs, so that means you are forced to fill up that home with more material stuff.  If you live in the suburbs, like I do, you are expected to keep your lawn as nice as the inside of your house.

*breath*

I think this rant made me feel a little better! So thank you all for listening.

By | 2015-08-10T23:09:27+00:00 June 17th, 2015|Rant|12 Comments

About the Author:

Evan is the owner of My Journey to Millions which was started to track his journey from a broke debt ridden law school graduate to building a positive balance. Need more Evan? Follow him on Twitter, Contact him or get new posts directly to your email

12 Comments

  1. Lazy Man and Money June 17, 2015 at 10:16 am - Reply

    Miranda Marquit has written about her happiness of not owning a home anymore.

    Over time the payments toward principle grow. In my 15 year mortgages, it grows a lot faster each month and it is noticeable.

    That last part about the bad investment of a home reminds me of this list: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/.

    I look at it this way. Financial freedom means eliminating expenses and growing cash flow. Owning a home is the best way to reduce the housing expense. You’ll always have maintenance and taxes, but not rent or mortgage, the two biggest costs.

    If you rent forever, you are going to be subject to raising rates that may surpass inflation. You’ll need an awful lot of dividend income to eliminate that rent expense.

    • Evan July 5, 2015 at 9:35 pm - Reply

      nancial freedom means eliminating expenses and growing cash flow. Owning a home is the best way to reduce the housing expense. You’ll always have maintenance and taxes, but not rent or mortgage, the two biggest costs.

      If you rent forever, you are going to be subject to raising rates that may surpass inflation. You’ll need an awful lot of dividend income to eliminate that rent expense.

      Guess it comes down to how many people never get out from under the mortgage game. If the average person never unloads that 30 year monster then there cash flow never improves.

  2. Retire29 June 17, 2015 at 1:52 pm - Reply

    Man, You’re crazy! But a very entertaining rant. The only thing worse than homeownership is the alternative to homeownership–renting. Renting is just an expense every month, no opportunity for principal increases, no equity, the rent goes up every month, little to no say on what your place looks like. Homeownership can be hard at times, but some of that hardship assists in making one care about the place that is theirs.

    Eric

    • Evan July 5, 2015 at 9:27 pm - Reply

      The question really comes down to whether that increased equity is actually any real return vs the alternative of renting.

  3. TheMoneyMine June 29, 2015 at 9:17 pm - Reply

    Hi Evan –

    I must say that this is a pretty unusual rant!
    Most of the articles on the subject are praising the benefits of homeownership over renting, except maybe jlcollinsh, mentioned in a comment above.

    But you are showing the other side of the story: homeownership also comes at a ‘cost’.

    Look at the bright side of things: even though it can be unpleasant, you are also getting a few new skills at masonry, carpentry, insulation, AC,… 🙂

    Have a great day man!
    Nick

    • Evan July 5, 2015 at 9:21 pm - Reply

      Nick,

      Thanks for the attempt to make me feel better lol! It just seems like one of those things that society just accepts without really thinking about it.

  4. A June 30, 2015 at 6:32 pm - Reply

    I’d argue that the home is throwing off implied income. You have to live somewhere – so maybe count whatever rent you would have paid instead (maybe less than the rent for this house, as you may choose to rent a smaller/cheaper place) as the income the house is throwing off.

    • Evan July 5, 2015 at 8:57 pm - Reply

      The implied income is an interesting thought on the subject. Although the implied income amount would be reduced by the market rate for rent.

  5. Rebecca February 15, 2017 at 11:24 am - Reply

    I don’t know if I hated being a home owner, but I can say, I am over it. No more upkeep, no more dealing with leak roof, plumbing leaks, termites, etc. Now, we have no yard, to building to maintain, but we have a beautiful ocean view. We can up and walk away any time we want to.

  6. Evan February 15, 2017 at 1:27 pm - Reply

    Those are HUGE benefits not often discussed

  7. Diane November 5, 2017 at 1:57 am - Reply

    Home ownership can be a serious drag.

    But 15 years later I have a free and clear home that I paid 175k for and it’s worth 800k today.
    Granted I have fixed and cried numerous times over but at the end of the day I don’t think I could have made that in the stock market. So trust me at you will be happy you held onto that home. It’s the cheapest rent in town!

    • Evan November 14, 2017 at 4:39 pm - Reply

      Wow! But did you pay $175k? Or did you pay closer to $350k with debt, and then what about the renovations that you did during that time?

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