While I was doing my taxes, I was playing with Quicken and decided to see what living in my house cost me. I “bought” that house in 2007 for $236,000. Two and a half years later, it was worth only $96,000 and I declared bankruptcy to get that albatross from around my neck. When all was said and done, it came out in court that no one could tell me who owned the mortgage on that house, and so I won a “free” house in court.

Out of the five years since I bought it, I have not paid a dime in mortgage payments since September, 2009. Even so, that house has cost me $44,254 in mortgage payments over the last 5 years. Other expenses for the last five years:
Homeowner’s Association: $1,591
Electric bills: $15,471
A new air conditioner/ heat pump: $4,219
Household maintenance, landscaping, and lawn care: $11,152
New appliances on moving in: $5,408
Insurance: $5160
Property taxes: $6341
That is a total of $93,596 for 58 months. That works out to $1,613 a month. Now keep in mind, I haven’t made payments on that house for half of the time I have been there. If I had been, the monthly cost would increase to about $2,300 a month.

Now, to be truthful, I would have to pay utilities in an apartment, but I included them above because I have never had an apartment with $400 electric bills, which were not all that unusual in this house.

The five previous years in an apartment cost me an average of $1234 a month, including utilities and renter’s insurance. My apartment was nice. It was only 200 square feet smaller than the house I bought, and it had a garage. Does anyone think that the tax advantage of owning a home saves you $14,000 a year in taxes? Not even mentioning that the house is worth $142,000 less than I borrowed on it. Had I not filed bankruptcy and gotten that house, I would still be upside down on it. I am not repeating that mistake. I will rent from now on, thank you very much.

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1 Comment

SiGraybeard · February 24, 2012 at 3:28 am

This is one reason Robert Kiyosaki ("Rich Dad/Poor Dad" franchise and lots of books) has made many millions of dollars preaching the message, "your home is not an asset".

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