By Negative Trev
I remember when I bought my first property. It was a one hundred year old house. I was 26 at the time. The thought of owning my first house was super exciting, but honestly, if I could go back in time, perhaps I would have rented instead, and lived alot more easily.
The pressure of owning a home isn’t just about making money and investing. For some people, it’s about quality of life. People assume that if they own a house, life will be better. Sometimes, when I look back on my life, I think I was fooled.
Nowadays a small condo in Miami, U.S. or Toronto Canada can range anywhere from 400k up to a million dollars or more. This sounds like a great deal, right? Well, if you’re crazy it does.
If you have the financial means to pay off a property and have no debt, perfect. Either you worked really hard, paid off the debt or you were born into a wealthy family. I do not see much inbetween.
Let us go back to the experience with my first house that was constructed during the first world war, from the looks of it.
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To make a long story short, I owned it for 9 years. I paid the monthly mortgage payments, property taxes, maintenance, bills. I spent countless hours maintaining the property myself, whether it was in the interior or the exterior.
It is no secret that in life we will hear about people making good money in real estate, but what if to get to that point, it took 10 or 20 years of hard work. With profit comes sacrifice, and instead of talking about the upside of owning real estate, let’s talk about the negatives.
5 Reasons not to own real estate
- You will be a slave to the banks
Being from Toronto, a shoebox of a condo can set you back 650k. Let me repeat, six hundred and fifty thousand dollars. For a small condo! And that might be a bargain.
Imagine this, you put a 5% percent deposit on a condo and you’re left to pay the lender 617,500k in 30 years or less. If the condo is 600 square feet in size, that’s around one thousand dollars per square foot. See anything wrong here? I do. That is crazy.
The monthly payment on a loan this amount would be substantial. If you’re not making 100k a year, I do not really see the point of purchasing a property at this price.
If the mortgage payment plus property taxes is $3500 a month but you can rent the same apartment for $2500 a month, I may think about renting.
I would rather rent and not be poor than own a place just so I can impress some girls that might try to move into my place for free. At least if you rent, you can disappear from their lives at any moment if the relationship is going to “Separation City.”
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- Divorce is a huge possibility
“What? My wife and I will never get divorced. We love each other deeply, “ said by everyone at some point in their relationship, when things were good.
The divorce rate in the United States is around 50 percent and that doesn’t even take into account all the couples who live together unhappily. Let’s say 75 percent of all marriages will fail or will just be horrible to exist in. A Lot of people stay together because of the kids. Hey, hate to break it to you, but humans suck at relationships in the long term.
The idea of marriage was most likely put together by lawyers who will eventually profit when couples divorce. No matter if it is the woman or the man who makes most of the money in the relationship, during a divorce, things can get pretty ugly. You can put your life into paying for your house, and 20 years later, a judge can award to whom they chose. Ouch!
If you are in a great relationship and you are thinking about marriage and buying a house, try to envision the future. Do you honestly think your relationship is going to work? We have all heard the stories: “Man loses everything in the divorce and has to sleep in his car.”
If a man or woman enters into a relationship based on what people are going to purchase for them, that might be a bad sign. Oh, my God. I just had a great thought if you want to keep money for when you’re older and not have to sleep under a bridge in your car – rent.
- Houses kinda suck
What do I mean by that? Well, they suck. The roof gets old, the windows, floors, everything, and you are the lucky human who has to either fix it themselves, but more than likely, you will have to pay a professional to do the work.
This means that you will have to work more to pay these workers to fix your house and that you will now be living less and enjoying your house less because you will need to work more. Wow, those were long sentences. My finger hurts.
Even nowadays, houses aren’t built with the quality from many decades ago. Houses seem to be built with fake wood, and cheap materials so that they are constructed quickly for a cheap amount. It is all for profit. Look at what happens when a hurricane comes through, adios casa.
If you live for your house, I get it. It is a passion. But from my experience, owning a house is like taking care of a senior that you hate. Something annoying keeps happening and you have to pay for it and tolerate it.
I would rather rent an apartment in Thailand by a beach and pay 500 bucks a month than own a home that I must maintain like an old piece of crap car that is from the year 1977.
Society has brainwashed everyone into thinking that we need to own a house and go to college at a young age. That we should leave our parents as early as possible because it doesn’t reflect success.
Hey, if your parents are fine with you living with them, do that. Save your money.
If you are like me, and think that houses also kinda suck, then do this – rent.
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- Taxes and Bills
If you think that just having a mortgage loan to pay is awful, don’t forget about the bills and taxes, and I think you also pay taxes on your bills. Honestly, what type of life is this? The drama.
Yes, all the things we take for granted like lights, water and gas are super expensive over time. Electricity, gas, water, heat, water heater, etc. Holy cow, if you own a house, you may as well just live at work and visit your house on the weekend for a mini vacation.
Property taxes. Where I am from in Toronto, the property taxes are super high, and for what? The garbage man picks up the trash once a week and I need to pay $4000 per year. So basically, if you make a 50k per year salary, one month of earnings is going to property taxes.
Well folks, don’t forget to have your garbage taken every Friday morning. It costs a month of your life.
If someone were to tell me that their electric bill cost 50 dollars a month and that their gas bill was the same, I would say, “That’s not too bad.” But those are not the costs today. Utility bills in today’s world are expensive and it sometimes causes people to live poorly because they have to choose between food and bills. Most people will choose electricity over food, as sad as it seems.
So hey, if you want to potentially lose weight because you can’t afford food due to expensive bills and housing costs, buy a house. I’d rather eat good and rent.
- Buying a house and renting it out
Now aren’t you an intelligent one. You are going to get a mortgage, rent out your property to a trustworthy looking guy named Bob, and Bob is going to pay your house loan while you sit back and collect.
I think you know where this one is going.
A house, the perfect investment. A bank lends you cash, and you get someone else to pay for it, the renter. In a matter of years, you could have positive equity.
If you are living in a landlord friendly state or province, great, but trust me, not every region is looking out for the landlord.
Come on guys, there are television shows about people who haven’t paid their rent in over a year and the homeowner can’t get them out of the house. What an absolute nightmare.
Imagine someone is living in your house rent free, and not only are they not paying the rent, but they are not paying the bills. It should be illegal even though it’s not.
The reason that perhaps it is not illegal is that the government most likely want its citizens to share some of the burden of taking care of the incompetent or abusive citizens. Don’t get me wrong, many people lose their jobs and fall on hard times, but to live in someone else’s house for a year without paying anything, come on. Go live with a family member. How does that Michael Jackson song go, “Just beat it beat it.”
The stress of renting out a property and then having a squatter living in it would cause a type of stress that is hard to describe. You are going broke while someone is hanging out in your house and could be saving that money that should be for the rent.
Hey, a house could be a great investment, and for many people it is.* I am not a financial or investment expert so let this be a disclaimer. Please seek the advice of a professional before making any financial decisions.
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Conclusion
Many things that we went over today are possible realities that people don’t like to imagine. Nobody gets married, thinking about divorce, but it happens. People love to buy property until mortgage rates go up and they can no longer afford life. Sometimes thinking about the negative outcomes can save people not only thousands of dollars, but it could save them their health in the long run.
Be smart, and share if you care, amigos!