Tag Archives: HGTV

Don’t buy a house if you can’t afford it

I see the advice all the time not to buy a house if you can’t afford it, but rarely do I see a good explanation of what that means.

It’s really easy. Let me explain it, as someone who paid off a 30-year mortgage in five years and now co-manages rental property and has to determine if someone can afford to rent from usĀ or will be over their head. And no, just because I’m a landlord doesn’t mean I think everyone should rent. There are definitely times when buying makes sense. Continue reading Don’t buy a house if you can’t afford it

9 things your landlord won’t tell you: A rebuttal

My wife found an unflattering piece about landlords in the Huffington Post titled 9 things your landlord won’t tell you. This sorry excuse for an expose just makes accusations, without backing any of it up.

I’m a landlord. Here’s what I have to say about those nine things.

Continue reading 9 things your landlord won’t tell you: A rebuttal

Buy or rent? Here’s a datapoint

I looked at a house this week that spoke loudly to the question of whether to buy or rent. The asking price is about $100,000. It last sold in the late 1980s for $79,000.

Selling for $100K now isn’t a profit. That is why I couldn’t get a house I don’t want out of my head. Continue reading Buy or rent? Here’s a datapoint

How to go bankrupt and/or lose your house

I have a Saturday ritual. On Saturday mornings, about 49 times a year, I go to estate sales. On numerous occasions, I’ve been to estate sales of millionaires who, for one reason or another, were downsizing.

And on Saturday afternoons, I’ve been known to go look at foreclosure houses. Or, now that my wife and I have bought one, working on the foreclosure house.

I see a pattern.It’s unusual for the last owner of a foreclosure house to be in the house for very long. And almost invariably, I see a lot of home improvement projects. Often there’s at least one unfinished project still sitting there.

Often the projects are pointless–tearing out plaster walls to put in drywall, only because that’s what the stupid shows on HGTV say you should do.

But it’s always pretty clear from looking at the house and the information available in public records what happened. They bought the house, they made some payments, the house increased in value during the real estate boom, they took out a home equity loan and started changing things, then eventually they got in over their head.

Often the changes weren’t worth it. They’d start out with a $60,000 house in a questionable neighborhood, sink tens of thousands into modernizing the kitchen and bathroom and finishing the basement, and if everything had gone well, they would have a modernized house, still in a questionable neighborhood, and contrary to the promises they saw on TV, the house didn’t increase in value at all. Someone ends up buying what’s left of it for $35,000 or $40,000, fixing whatever is wrong or unfinished, and renting it out to someone for $700 a month. A rather inglorious end to those TV-inspired dreams.

I see another pattern on Saturday mornings at estate sales.

More often than not, the family stayed in the same house for decades. The kitchen appliances are usually dated. Sometimes they’re from the 1990s, sometimes the 1970s, and on rare occasions, you even see a range from the 1940s or 1950s. And generally most everything about the house gives the impression of age. Sometimes you see kitschy trends that have come and gone, like shag carpets and dark wood paneling. Sometimes you see timeless craftsmanship. The latter is particularly common in the homes of the wealthy–when they did buy things, they bought things that wouldn’t go out of style, so they’d only have to buy once in a lifetime.

None of these houses will show up on HGTV or any other TV, and for good reason: Houses like that don’t make you run out to Lowe’s or Home Depot and buy their crap.

But at the end of the career or life, there’s something to show for it. A paid-off house with things in it that have to be liquidated, which then goes into the estate. The money from all of it then helps pay for retirement, end-of-life expenses, or goes to the heirs.

The foreclosed houses look a lot more like what you see on TV, even if you have to wipe some grime away to see it. The appliances are certainly newer, the kitchen cabinets are usually newer, and somewhere there’s at least one TV-inspired project, maybe still brewing.

But what’s left to show for it? Years of payments, lost. A wrecked credit score. Possibly some other maladies. Nothing anyone would want.

Clearly it’s much better to just live within one’s means, even if it means sacrificing coolness points in the short term.

In the long term, I’m pretty sure the people who chased the newest trends, overextended themselves and ultimately lost their houses ended up with about the same number of coolness points. Maybe a little less.