Pondering housing costs

[pinkytoe]

Austin TX. Lion's share are school taxes.

[Oddball]

For rent vs buy as well as what property to rent or buy it all comes down to am I getting the most of what I want at the lowest price. I figure out what I want and then determine the most affordable method to get that.

Kestra, I like your formula. That's what I've been doing for years but never thought out and articulated so clearly.

Awakenedsoul, I owned a cottage about the same size and price as yours. Paid cash 10 years ago, lived there for 7. It was in the boonies, so the taxes were only $300 a year! And it was brand new, so the maintenance was low. Flip side was I had a car and an SUV to feed. Anyway, I figured I'd be there forever, but then my plans changed.

I've thought about buying a condo. Problem is the taxes, insurance, and HOA fees would rival the rent on my downtown studio. Plus the condos here are less conveniently located. I realize I'm missing out on property value appreciation in exchange for more freedom and less hassle. To me this equals simpler living, and it's why Kestra's approach is working well for me now.

With owning, there's the psychological aspect of having your housing expenses over and done with. But of course not necessarily when the taxes and fees get so high.

[awakenedsoul]

Oddball, Yeah, that's true. In California, property taxes can only go up 2% a year. For me, owning a home has been sort of like a forced savings account. Even though my repairs are costly, I still spend far less this way. Rents here have really shot up since so many people have lost their homes. I couldn't afford to rent now. (Well, in this area, anyway.)

I guess as long as you are able to stay in budget whatever works for you is best. How much did you pay for the cottage? (if you don't mind me asking.) It sounds like it was ideal at the time.

[Oddball]

Grand total was about $92K. I bought the land first and added the house a year later (2004). I don't think I'll do that again. Much easier to buy an existing place!

[kib]

I don't compute a purchase price in relation to my income, I compute it in relation to the market value of my current house. Since my current house is around $235,000-ish, I would never go higher than that.

I assume that if I moved in retirement, we would downsize. The perfect house would be 2 br, 1.5 baths on one floor, around 1,000 sq feet with heated outbuildings for DH's stuff /shop/garage. On 1.5 to 3 acres of flat land, no trees. All for $150,000..

OMG, would you like to buy my house? I'm about an acre short but otherwise pretty close.

[iris lilies]

OMG, would you like to buy my house? I'm about an acre short but otherwise pretty close.

Oh, I forgot to say, I don't do desert.

[Seven]

My boyfriend and I share a rented flat of 430 square feet (40 square meters). It is small, but it's all we can afford right now, and it is okay.
It costs 25% of our income.
Buying a home is not feasible at the moment, and wouldn't make sense anyway, because our jobs aren't permanent and we have to move eventually when we have to get new jobs.

[Teacher Terry]

Here your property taxes on based on the age of the home. So our home built in 1950 is only $600.00/year. This was done to prevent old people from losing their homes but what has happened is people are buying huge beautiful homes in old neighborhoods & not paying their fair share of taxes. One idea is floating around is that when a house sells it should go up to it's taxable value so the old owners would not suffer.

[sweetana3]

We had that same type of system, Teacher Terry. The state ended up revamping the whole system and some people's taxes went up 300% or more without any significant period of adjustment. It was a bad time for all the counties trying to sort out a wholesale change. One county took almost 3 years to sort out the tax situation. $2,000 or less to $10,000 per year is a crisis to most and even though the houses were worth a lot, they had to refinance or sell to get the money in many cases.

In addition, I think they changed the mill rate at the same time and snuck it thru thinking that no one would notice in the confusion.

[Teacher Terry]

I think that if they wait for people to sell it should be ok because you would buy the house knowing what the new tax would be. However, if you just raise it that would certainly tax fixed income people right out of their homes which would be terrible.