I wrote earlier about how I find mortgage debt to be a bad thing. Since then, I have been thinking about whether or not the whole concept of home ownership is equally as flawed as the idea of mortgaging a home. Even though I expect to make a decent profit on the sale of your house this year, and we will likely be moving out of this market and into a significantly less expensive one, it may not make sense to spend that gain on another house. Here’s why.
Even if we were to buy as modestly as possible, so that our profit on our current house were to cover 80% or more of the purchase price, owning a house is still an expensive proposition. A fixed-fee rent beats owning when you consider the added cost of property taxes, new roofs, major appliances, homeowners association dues, etc.
Also, I have very little confidence that we could buy our way into another situation where we could sell another house for the same kind of profit we will realize on this one, particularly since we are conciously avoiding stupidly overpriced markets in our search for somewhere new to live.
Finally, I don’t think we are ready to settle down in one place yet, and the hassle and inconvenience of prepping, selling, looking for and buying another house every time we moved would be a barrier to doing so. Right now in our lives, that is a pretty serious drawback.
Tags: debt, finances, housing
These are the ramblings of 
I agree that many markets are highly inflated, and that if you tend to move around on a fairly regular basis buying a house is probably not the right option for you.
However, renting isn’t such a great deal either. We just bought a house in an area with inflated prices, however our rent (for a much smaller apartment with no land) was the same as our mortgage payment. Sure you don’t have to pay for your own repairs, but you also have no control over how those repairs are made - more energy efficient appliances for example. Also, since our apartment was built in the 50’s-70’s individual units don’t have their own water or electric meters. They use some formula that supposedly refelects your usage, but basically if you conserve you just end up paying your neighbor’s utility bills. Furthermore, almost all apartments are icky to live in. No matter what you do to it you always are aware that you basically live in a ‘filing cabinet’.
The other issues with renting include having to deal with customer ’service’ for everything (from people who generally don’t live in an apartment themselves), including minor repairs, and the effect of common property syndrome - since it doesn’t belong to me I can treat it like crap, as well as living right next to, underneath people who are f*#@ing insane and have no concept of common decency or consideration for other people.
And after dealing with all that, your money isn’t going anywhere. At least with a house, when you sell it you get something back.
And I’m not talking about inner-city or college-town crappy apartments, all of the places I’ve lived in have been (as far as apartments go) very nice.
All good points, and you got me thinking about this even more. First, I should note that when I said rent, I did mean rent a house, not an apartment, for all the reasons you listed with apartment buildings.
Additionally we have some lifestyle constraints that we are trying to work within.
1) We have made a promise to never have debt again. We are absolutists about this - mortgage is debt, so we can have no mortgage.
2) We derive no pleasure from spending all of our “free” time chained to a never-ending list of house related TODOs.
3) We have yet to determine what city is the right fit for the ways we want to live.
None of this is set in stone yet. We are simply exploring our options, and I guess it came as a revelation to us that the American McDream wasn’t our only option.