There’s been a recent trend, apparently led by James Altucher, to say that home ownership is a mistake and that everyone should rent. Well, in all deference to James, that’s just not true. Home ownership is a money-maker if you’re smart about it.
I just read an article by a guy named James Altucher about why he’s never going to own a house, and why I shouldn’t either. I actually read the article, not just the headline, because if ever there was a time for non-conventional thinking, it is now, and a mind should be open to new ideas.
My advice: close your mind to James Altucher. James Altucher is an idiot. If you live your life like James Altucher, your life is going to pretty much suck.
First of all, James lives in New York City, according to the places that he describes, where he’s rented. Yes, you should not buy a house in New York City. New York City is a really expensive real estate market, it’s heavily regulated and heavily taxed. If the whole country were New York City, then James would be right.
The problem with people in New York City is that they believe that the whole world is New York City, which I can inform you from outside of New York City, it is not.
Which leads us to our second point: this assertion that property taxes are a major reason not to own. Really, James? Being someone with 7 ½ acres paying less than $600/yr in taxes, I kind of find that really, really hard to believe. That bill, which I pay with a really small part of my paycheck, just isn’t killing me. Meanwhile, I have 7 ½ acres. How much will it cost you to rent that in New York City?
Do I need 7 ½ acres? Well, you know what? That’s my freakin’ business. The idea is that I want that much land, and I have a lot of fun on it. So do my horses. Wanna take a look at how much it would cost me to stable five horses? Give you one clue to that: a lot.
Now, when I got out of the Navy in 1994, I wasn’t making a ton of money and certainly didn’t have anything like a trust fund, lotto winnings or similar money source. What I did have, and what was essential to have, and what I think many people who are buying are lacking, is a reasonable expectation of my living situation. In 1994, I moved to Winter Springs, Florida, and I bought my first house, and I paid $72,000 for it. Granted, I didn’t put ANYTHING down, because I got a VA loan, but if I’d had to save for it I could have, and it wouldn’t have been that big of a stretch to buy a modest, 1,100 square foot home on a little less than a quarter acre of land, where there was a good elementary, middle and high school.
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