What It Cost Us to “Own” Our Home Last Year + A Question I Ask Myself Every Morning

We’re only three weeks into January so far, and we’ve already received a notice from our property managers* that our dishwasher is on the fritz again. Depending on what course of action we take (replace the circuit board @ $390 or replace the entire thing @ $650 (both costs include parts and labor)) we’ll be dumping even more money into a home we could care less about.

This is just one of the joys of home ownership. And yet another reminder of the stupidest decision we ever made with our money 8 years ago!! Even though it completely changed my life and this blog and all my money and best friends/partners/colleagues and everything else in my world for the good, haha… So I can’t bitch too much, even though yes – it’s no secret I’m not a fan of home ownership ;)

Or should I say, I’m not a fan of home ownership if you’re not mentally and financially prepared for it. Yes it’s smart for maybe 90% of the population and in the end saves you lots of money blah blah blah, but make no mistake about it – home ownership is not an investment. It’s a place to live, and a major responsibility at that. If you don’t believe me, check out this article from JL Collins who articulates it much more eloquently than I can: Why your house is a terrible investment.

That being said, it is what it is and all we can do now is learn from our mistake and wait until that glorious day comes to off load it ;) In the meantime, we have one foot out the door already by having renters in the place and automatically becoming landlords by default. Something else not for the faint of heart, btw, but fortunately there’s property managers to help!

Here’s how much it cost us to own this house of ours in 2014:

  • Repairs and maintenance: $618.80
  • Homeowner Association fees: $1,620.00
  • Property management and license fees: $1,948.75
  • Taxes paid: $2,420.70
  • Principal paid: $6,405.84
  • Mortgage interest paid: $14,985.37

Total costs to “own” our home: $27,999.46

That’s $28,000 out the door in one year – ouch. And I put quotations around “own” because we all know that the banks own our home and not us until it’s all paid off. And look at what they charge us for the pleasure! $15,000 in interest fees compared to the $6,500 in principal pay off, ugh. That’s with me rounding up and throwing in an extra $150 or so every month too to help speed up the process!

On the plus side, this is $20,000 less than we paid last year for our house – hah. (That means we’ve paid over $75,000 in two years btw, even though we did do massive renovations getting it ready to be rented out). We also collected rent on our house to the tune of $20,100.00 for 2014, so the total out of pocket was “only” $7,899.46. And of course our equity went up by $6,500 (no longer underwater – woo!) and there’s tons of tax write offs to snatch up as well. It being a rental property and all.

What would it have cost us had we been renting instead? I’m glad you asked. Because I can tell you with 100% certainty that it would have cost $20,100.00 because that’s exactly what it did cost for us to rent a place last year! We’re living in someone else’s house coincidentally for the same amount we’re renting our old house out :) Only one is far from a city and the other is almost inside it – the reason for the move. But do you know what’s even better than the lower costs? The fact we don’t have to worry about the repairs on this home or the maintenance or homeowners fees, property management, licenses, taxes, principal payments, and all those damn interest payments like we do on ours! It’s all someone else’s problem because we rent! Huzzah!

So don’t let anyone tell you it costs more to rent than it does to own a home… That may be the case in some/many circumstances, especially when a lot more time has been factored in (if we fast forwarded 10 years from now we’d not only be MAKING money off our rental property, but the rent we’d be paying ourselves would have skyrocketed as well!), but you always have to factor in your goals and priorities too. And even more so, your personality. If you don’t like feeling tied down or caught up in tons of responsibility like myself, the freedom can more than make up for the savings in the end.

And I’ll be the first to admit I focus on the personality/emotional part of the puzzle more so than others. Almost everything I do with my money is based on how it makes me feel vs the “correct” smarter way. There’s a reason I flip flop between paying off debts hardcore (mortgages), going on saving binges like my current Challenge Everything series, and even making less money with my businesses to focus on stuff that makes me more excited in the end. This doesn’t work well if you have a penchant for shopping and hate managing your finances (if this is you click away now!!! :)), but it’s amazing how much more enjoyable life is when you structure it around one simple question:

“What would make me happy today?”

Sounds kinda cheezy/lame, I know, but what a powerful question to answer. Imagine if you did whatever it was that brought you joy every day? Do you think it would matter whether you paid the largest interest credit card off first vs the smaller one, or made .05% less money off your investments than another way, or were “being bad” for renting vs owning? Of course not. You’d be happier in the end and what’s better than your own happiness??

I recognize this is incredibly oversimplified here – there’s no way you can do whatever you want every day because of LIFE – but it’s still a great question to ask yourself every day. I recommend even throwing it on a sticky note and putting it somewhere you’ll see every morning as you wake up! Even if you do have to slosh through an unavoidable $hitty day, at least you’d know it’s temporary and can get back to scheming up “happy action items” again once it’s over! It’s all about being conscious with our decisions, whether financial or not. And the question takes you 2.3 seconds to answer! :)

Anyways, I meant for this to be a warning to all those thinking about buying their first house out there, or even those looking to pick up a rental property, but I managed to somehow make it more about feelings – woops. But hopefully it still helps! And to be fair, going into a house for the sole purpose of renting it out vs living in it yourself are two completely different things. You don’t typically buy a house with the purpose of losing money every month as an investment, haha… So my landlording stories should definitely be an example of what *not* to do.

At any rate, have a great day! And a *happy* one at that ;)

PS: What would your answer have been if you asked yourself this question in the morning?

*It does cost more using a property manager than doing stuff yourself. But when you live far away AND hate maintenance stuff it can be well worth the premium… There’s nothing worse than getting a call in the middle of the night from your tenants – blech.

[Painting up top by OXLAEY.com]

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  1. Jeremy January 21, 2015 at 6:19 AM

    I’ve “owned” 2 different houses in my day, and the day I sold the last one was the happiest day of my life (don’t tell my wife, haha)

    I love not having those time and dollar suck holes

    We will be renters for life

    1. J. Money January 21, 2015 at 1:15 PM

      Now that’s hardcore! Haha..

      I’d like to think we’d be renting forever too, but sometime tells me my wife/kids will say otherwise at some point :)

  2. May @ Messy Money January 21, 2015 at 6:47 AM

    Homeowner here. Yep. Last year $22,100 and I am sure there are a few bits and bobs that did not get included. Our roof is starting to fall apart so we will have a huge expense coming that we wouldn’t have if we were renting. VERY difficult to make the mind shift from the idea that homeownership is the end all be all.

    1. J. Money January 21, 2015 at 1:15 PM

      Ouch – sorry to hear :(

  3. Emma Healey | Money Can Buy Me Happiness January 21, 2015 at 7:46 AM

    I think the sweet spot is owning property (or multiples) in a cash flow positive situation whilst renting elsewhere. I love the freedom of renting but I also enjoy the security of knowing I am on the property ladder.

    We moved into one of the rentals we own last year simply because rent in my city is crazy at the moment due to earthquake rebuilds so renting was around $200 per week more than our mortgage cost. I had to re-carpet due to dog pee (belonging to the previous tenant) – I still heave when I think of the smell – and as we were living in the property at the time the expense was not a tax deduction. That really sucked!

    We own four properties as rentals and all of them pay for themselves and have so far had good capital growth. While we were buying the properties we lived in a high COL city and rented. Trying to purchase in that city would have been a sure fire route to working ’til 65.

    I think if New Zealand had experienced a downturn in property values after the GFC I would be singing a different tune, but thankfully sub-prime mortgages and 100% loans weren’t available so that cushioned the country. And 2008 was a great year to buy real estate at discounted prices.

    1. J. Money January 21, 2015 at 1:19 PM

      Nice on that empire building!

      I believe that’s a smart route to go too for wealth building – as long as it fits your lifestyle/personality. I WISH it did mine, but so far not enjoying it, haha…

      1. Emma Healey | Money Can Buy Me Happiness January 23, 2015 at 7:31 AM

        With time it’ll get easier (esp with a good property manager – I hate dealing with tenants personally) and maybe you won’t want to sell. Interesting times ahead with possible deflation occuring, I mean if property usually keeps pace with inflation (at a minimum) I’m going to see some stagnant or negative growth. Still, not planning on selling so for now I’ll be stoked with paying less for petrol (gas).

  4. Mr zombie January 21, 2015 at 7:55 AM

    “Yes it’s smart for maybe 90% of the population and in the end saves you lots of money blah blah blah” Haha this made me laugh a lot.

    What would make me happy today? Hopefully not crashing my motorbike in the minus 2 degree weather and saving 100% of my pay rise. BOOYA

    Mr Z

    1. J. Money January 21, 2015 at 1:21 PM


  5. jestjack January 21, 2015 at 7:57 AM

    Long time LL…Been my observation that the dynamics of housing have changed over time. It used to be home ownership was the “foundation” of a financially secure household…now …not so much. What I’m struck by is the alternatives to RE investing and the returns. I have money invested in mutual funds that in 2013 returned over 30% and in 2014 right around 12%. To get this kind of “yield” I didn’t have to get out of my pajamas. On the other hand as an active landlord I get to “work with my hands” a little more than I would like, answer complaint calls, file for evictions and interview new clients who seem to get crazier and crazier by the day. And when one does decide to sell there is …”capital gains”…every investor’s “boogey-man”. It is simply breath-taking to see what happens when the capital gains tax is imposed. I would advise you to talk to your tax professional before you do sell to get a clearer picture of what your scenario would provide….

    1. J. Money January 21, 2015 at 1:24 PM

      Yes indeed… PLENTY of ways to grow your wealth depending on what you’re interested/comfortable with. So far I’ve been loving my Vanguard index funds and if all I had to do was continue plowing money into there every year without getting my hands dirty, I’m all for it ;)

      We’ll def. be talking with our accountant before pulling any triggers too. I know there was a sweet period of when is best to sell tax-wise, it’s just a matter of whether that matches economy and personal-wise. I just keep telling myself “it’s only money” at the end of the day though, so that helps me to sleep a tiny bit better every night – hah.

  6. Anne @ Money Propeller January 21, 2015 at 8:12 AM

    I like the happiness question :) Our place cost us a lot a lot last year.. But now it’s paid off :)
    Today… Let’s see. I think getting two posts written and a work presentation I’ve been dragging my feet on finished would make me happy. Here’s to staying focused!

    1. J. Money January 21, 2015 at 1:25 PM

      Way to go on paying it off!! Let’s change places!!! :)

  7. Stefanie @ The Broke and Beautiful Life January 21, 2015 at 8:35 AM

    Honestly, finishing a post that’s been weighing on me all week would make me happy today. I know it’s work, but the relief would make me happy. Otherwise, I honestly do what I love just about every day so I really can’t complain.

  8. Laurie @thefrugalfarmer January 21, 2015 at 8:44 AM

    Ha! I just wrote a similar post on Debt Roundup today! I hear you on the home repairs too. Our oven is on the fritz: $300+ to repair it, or double that to replace it – who knows???

    1. J. Money January 21, 2015 at 1:31 PM

      I think we’re gonna just suck it up and replace the dang thing and be done with it… I’m gonna kick myself if something else breaks which would have equaled a new one altogether!

      good luck with your decision :)

  9. Brian @ Debt Discipline January 21, 2015 at 8:48 AM

    I’ll have to run my numbers on home ownership to see what my house is costing me. I think the biggest mistake people make is buying to much house or refinancing or borrowing more money to do home improvements, inflating their monthly payments along the way. I know we fell into this trap and I could have had my original mortgage paid off already.

    1. J. Money January 21, 2015 at 1:35 PM

      Yes, agreed. The constant upgrading of your lifestyle – not good for your wallet! (Or stress)

  10. Rebecca@TheFamilyFinder January 21, 2015 at 8:50 AM

    This morning I long for the days when we rented. As I sit calmly watching this new electrical disturbance in the house that causes half of our lights and appliances to flicker on and off. I continue to remain calm as the tank alarm goes on as well. CRAP! Deep breaths. More coffee. Renting again would make me happy.

    1. J. Money January 21, 2015 at 1:36 PM


      I hope it all gets cleared up soon! No fun!

  11. Chris @ Flipping A Dollar January 21, 2015 at 8:52 AM

    I’ll bite. Here’s our numbers – We bought in June 2014 and they rented from us for a month.

    Repairs and maintenance: $425.78
    New Carpet in upstairs and basement: $2635.09
    Homeowner Association fees: $482.50
    Taxes paid: $1627.38
    Regular Principal paid: $1,892.48
    Extra Principal Paid: $4,969.77
    Mortgage interest paid: $491.04
    Money saved towards future replacements (hot water heater, furnace, and HVAC are original 1989 with routine repairs throughout that time): $2,227.91 – **This is fully funded from my eBay side business.**
    Total costs to “own” our home: $14751.95

    And I’m not even including any furniture like my daughter’s bed (craigslist), dining room set (craigslist), or couch (estate sale) because I think of those as non-recurring purchases.

    The worst part, we only bought it in June, so this is going to continue to be high.

    When we paid rent, we had ~14k for the whole year! At least once we’re paid off, our property tax and HOA will only be 3,500 combined. That’s manageable!

    1. J. Money January 21, 2015 at 1:38 PM


      perfect example right there, man!

      and very true – the best thing about owning your own home is that one day it’ll be fully paid off and then no “rent” ever again! :) I wouldn’t be mad about that, haha…

  12. Holly@ClubThrifty January 21, 2015 at 9:03 AM

    We own two single family rental properties, and you’re totally right that it is not for the faint of heart. I manage them myself, but that’s mainly because they are only 30 minutes away. I have regretted becoming a landlord before, but my regrets have diminished right along with the mortgages on those properties. They should both be paid off in around 11-12 years- when we are 46 or 47 years old. I cannot wait for that day!

    1. J. Money January 21, 2015 at 1:39 PM

      Beers on me when that day comes! :)

  13. Cedes January 21, 2015 at 9:07 AM

    I’m one of the situations where owning is more cost effective than renting. Out of curiosity I checked out rentals in my area last week and for the cost of my monthly payment (which includes my insurance, HOA fees, taxes, and repairs I made last year) for my 3 bed/2 bath house I could only rent a 1 bedroom apartment. Of course this doesn’t include the utility costs to heat/cool my (probably larger than an apartment) house or my water costs but those together average about $60 a month, so I think I’m coming out ahead in the grand scheme!

    As a side note, OMG, Northern VA, and MoCo in MD are flipping EXPENSIVE! My commute takes me through those areas and I was thinking maybe I could find a rental closer to work that also saved me money, but nope, the best I could find was a tiny room in someones basement (I’d have to share bathroom, kitchen, laundry with their family) that would save me ~ $350 a month (plus probably an additional $100 in gas), great savings, but uh, no thanks!

    As far as what would make me happy today? SNOW!!! (but not all the stupid drivers!) I would love to have a snow day to get some much needed cleaning done around my house! (I know that doesn’t really answer the question, but I have no huge “what would bring me joy” every day type thing that I can think of. Probably because I’m happy with my life right now. I’m a pretty optimistic person too, so it’d take a lot to remove all the joy from my life!)

    BTW, Happy Hump Day!

    1. J. Money January 21, 2015 at 1:46 PM

      Haha…. yes, DC area is NO JOKE. I once looked at a 1 bedroom (in Bethesda – far from downtown DC!) and it was literally $400,000. You can get a mansion for that two hours away, haha…

      I’m glad owning is working out for you vs renting though – that’s certainly ideal if it matches up with your lifestyle as well :)

      Will put in a good word for snow for you! I love seeing it too – esp now that my boys are getting old enough to appreciate as well!

      happy hump day.

  14. jennydecki January 21, 2015 at 9:29 AM

    I’m so happy to read this! I don’t deny anyone the joy of ownership but for me it was never a joy. We moved about two months ago and since we’ve been in our three bedroom apartment (that’s really the expanded first floor of a house with half the basement for our washer/dryer and storage space) I am in love with renting.

    I am going to do what’s on my list for making me happy today. Get myself a library card here in my new state and taking the kids to a game night at their elementary school.

    Life has been SO SO SO much better as a renter!

    1. J. Money January 21, 2015 at 1:50 PM


      what a great way to spend time w/ the kids too! I like that.

  15. C@thesingledollar January 21, 2015 at 9:31 AM

    As a non-homeowner I find these posts so soothing :)

  16. Amy January 21, 2015 at 9:31 AM

    While I’m generally happy to be a home owner, this is put to the test every time we receive a costly propane delivery.

  17. Jon @ Money Smart Guides January 21, 2015 at 9:37 AM

    Housing is one of those hot button personal finance issues that everyone has a different opinion on. At the end of the day, you have to do what makes the most sense for you. Sure you can read the studies that say homeowners come out ahead in the long run and most millionaires are owners and not renters, but that shouldn’t be the deciding factor in buying vs renting. You need to answer the more important questions, like freedom and if you like making repairs, etc. as you have pointed out. Once you figure this out, you can make the decision that is right for you. It may not be right for me, but that doesn’t matter. You have to do what makes you happy.

    1. J. Money January 21, 2015 at 1:51 PM


  18. jlcollinsnh January 21, 2015 at 9:47 AM

    Hey J$…

    Great post, and thanks for the link!

    Like Jeremy above, selling our last house was one of the best days of my life. Going on three years now as a renter and we’ve never looked back. Well, actually we have. With great relief and fondness!

    This past weekend we were out to lunch with some new friends who have moved into our building. They, too, just unloaded a house after many years of ownership. Guess what we talked about? With great relief and fondness all around. :)

    1. J. Money January 21, 2015 at 1:52 PM

      Now all I have to do is retire early and we’ll be tied for awesomeness! :)

    2. jlcollinsnh January 22, 2015 at 5:34 PM


      I can only dream of having an awesomeness level even close to yours. Once you are fully FI, I’ll no longer even be able to keep it in sight. ;)

  19. SavvyFinancialLatina January 21, 2015 at 9:55 AM

    Sometimes I wonder if home ownership was the right path to take. Expenses do add up, but then again rents have been rising a lot in Dallas. I think our mortgage, principal, and taxes are comparable to rent. But our house insurance ($130/month) plus home improvements/maintenance add like $300/month extra.

  20. Emily @ Simple Cheap Mom January 21, 2015 at 10:01 AM

    I’ve fixed up and sold a couple of houses and I think that housing, financially, has been a great choice. Now we’re in a house in the suburbs that we’re not planning to improve. It’s kind of boring and with a toddler the house feels like a lot of work. So, you might catch me looking at rentals in more exciting neighbourhoods. But I just can’t swallow the rent!

    1. J. Money January 21, 2015 at 1:54 PM

      Kids def. change things for sure. My wife has lived in one spot her whole live and I’ve lived in over 20 (no exaggeration) so it’ll be interested to see what we decide on for future living arrangements. I’d love to say “let’s travel forever!” but now kids come first so gotta make sure it all works with them too… Though i don’t think I turned out *too* messed up from moving my entire childhood? ;)

  21. Zee @ Work To Not Work January 21, 2015 at 10:43 AM

    For me the thing about owning a home is that it’s the longest decision I’ve made in my life. I bought a home based mostly on the fact that I always heard “property always goes up” and that it’s one of those life milestones that you are “supposed” to do as you get older. Well, in 2007 (like you) property was about to go steeply DOWN. But besides for that point, I seem to be struggling with the roots of it all. I’ve lived in my house for almost 8 years and I think it’s one of the longest decisions I’ve ever made. Going to college wasn’t that long, I’ve never had a job that lasted me 8 years, I’m not married or in a long term relationship that has lasted that long…. Owning a home is the longest decision I’ve made in my life I think. My dog is 5 years old and that’s the second closest it comes to committing to something in my life.

    Making decisions for that length of time is becoming more and more difficult for me. I’m beginning to question if my long term future has home ownership in it or not. Perhaps being a renter offers me the flexibility in life that I feel like I need.

    Now when I think back on it, if someone told me to make a decision as big as “where do you want to live” and then added “for the next decade” I would probably freeze up because I wouldn’t know. But the only arguments I heard were the ones along the lines of “it’s a good investment” so I didn’t consider that as much. Perhaps we should stop pressuring people and assuming that home ownership is a “step in life” that people need to take.

    1. J. Money January 21, 2015 at 1:56 PM

      YES!!! Great point!!!

      Home ownership is best for the LONG TERM. I naively thought “well hell, I can always just sell the place if I get bored in a couple of years, so why not? let’s just do it!” and obviously that is NOT as easy to do, haha… I mean, it could be, but there’s so many fees involved you’d lose tens of thousands of dollars if not timed right!

      So yes – long term is key for this stuff. And oddly enough the 7 or 8 years I lived in our house was the longest ever too. 2 years in one spot was the previous record :)

  22. Adam @ AdamChudy.com January 21, 2015 at 10:54 AM

    Owning your own home is also about having space that you can do what you want with. There’s a lot of personal benefits there that aren’t financial.

    I also think in the right market you can make home ownership much cheaper that renting. Here in Houston rent for a decent apartment has gone through the roof. A decent 1 bedroom is $1200-1600. For that price we bought a 3 bedroom house, with a nice kitchen and a pool. We then added a room mate who pays $800, making our house costs (including the higher utilities) much lower than renting.

    Hopefully on top of that we get decent market appreciation.

    1. J. Money January 21, 2015 at 1:57 PM

      all good points for sure :) I remember loving the idea that I can do whatever I wanted to my house or inside of it. A different kind of freedom, really.

  23. nick January 21, 2015 at 10:55 AM

    it all depends on what kind of property you own. i have a 4 unit. I live in 1, rent out the other 3 and handle almost all the repairs myself. (benefits of growing up in the construction industry)

    here’s 2013 numbers (still finishing 2014’s)

    rent collected from 3 apts – 21,600
    insurance – 2,632
    interest – 8,277
    repairs/improvements -6,343
    taxes 7,217
    utilities – 5,956
    depreciation – 2,000

    net $-10,824

    so it cost me $10,824 to live in my house all year. or just over $900 a month. if i rented my apt i could easily get over 1,000 a month (i live on the 1st floor and basement with access to the backyard)

    someday when i have the mortgage paid off and have moved to a different property i anticipate this property generating a positive income of around 900 a month

    1. J. Money January 21, 2015 at 1:58 PM

      NICE!!! Great way to work it, thanks for passing along the details for us to read.

  24. Lauren January 21, 2015 at 11:19 AM

    We’re saving up to buy a home, but I definitely have those times where I think we should scrap the idea and just find a nice place to rent. Unfortunately, rental prices in our area are as much or more than a monthly mortgage on the kind of home we’re seeking(small!). I get overwhelmed thinking about all those additional costs that come with home ownership, though. Yikes! It’s a tough call.

    1. J. Money January 21, 2015 at 1:59 PM

      I think as long as you take some good amount of time to consider it all, whichever decision you make will be fine :) Just don’t be an idiot like us and decide to own not only out of the blue, but within 48 hours of seeing our place. Probably good to have a budget and put more than 0% down on it too, *hangs head*.

  25. Steve January 21, 2015 at 11:33 AM

    While I would never say look at a home purchase as an investment, except for those who are really good at buying a run down house, have the skills to do at least some of the fixing and then renting it out, I would say that a house can be a way to diversify wealth. In my case, I have a house and a rental. The rental was my wife’s before we got married. Did not want to sell in a bad market so we have held on. Bottom line, we are not people who should own a rental and will seriously consider selling once the current renters lease is up. Now the house we live in, we looked and looked and waited until we found the perfect storm and less than 4 years later it has appreciated close to $300,000, per Zillow, over what we paid. We also put down a decent down payment so we have substantial equity. The key was we did not need to by so we could spend time waiting for the right house at the right price and during that time had educated ourselves as to what houses were worth in the area we were looking.

    This brings me to my main point and something I was thinking about while walking the dog this morning…. almost everytime I have got a great deal, investing, buying a house or maybe just buying something off of eBay, its because I have been patient, I was not in a position where I had to make a buy in a short time frame, I recognized value when I saw it and I was not afraid to pull the trigger when it happened.

    1. J. Money January 21, 2015 at 2:12 PM

      Well said, Steve. Patience is a virtue indeed, and especially with making the largest financial decisions of our lives. Something I need to personally be better with myself!

      Thanks for stopping by today.

    2. Slinky March 6, 2015 at 2:27 PM

      It all depends on what things are more annoying to you – maintenance/repairs/house stuff, or neighbors/landlords/apartment stuff. I’ll take the house stuff any day. I find people in close proximity several magnitudes more annoying than having to get a new dishwasher. No more getting woken up every morning, no more drunken 3am door buzzes, no more waiting a week for the landlord to fix something. No more weird looks if I dare to sit outside in the yard, no more waiting for the laundry machine. No thanks!

      Also, I’d pay WAY more money if I wanted to rent anything even remotely comparable to my 3 bedroom/1 bath house on a 2 acre wooded lot. I know people that pay more for a 2 bedroom/1 bath apartment.

      1. J. Money March 6, 2015 at 10:03 PM

        All good points indeed :) I tend to forget a lot of those since I’ve owned for so long… though you still get a lot of that annoying neighbor stuff if you’re in a condo/townhouse/etc.

  26. Michelle January 21, 2015 at 12:17 PM

    I honestly cannot wait until we sell our home and move into a rental. I’m ready for some “carefree” living! :)

  27. Done by Forty January 21, 2015 at 12:24 PM

    I often long for the days of being a renter. I hate the mowing, the repairing, the ongoing upkeep of a house. Plus, renting is cooler.

    If some landlord offered a complimentary maid service with our rent, I’d move in a heartbeat. :)

    1. J. Money January 21, 2015 at 2:14 PM

      Would probably be worth the cost of providing that too! haha…

      I remember once a colleague didn’t want to quit his job where we worked because he got free Starbucks anytime he wanted :) The job was def. not a good fit for him, but all he could think about was that coffee that cost our company less than $50 a month! haha… too funny.

  28. Crystal January 21, 2015 at 12:34 PM

    In the suburbs of Houston, it may be a little more stressful to “own” a home, but it’s generally cheaper. We were renting a 1000 sq.ft. apartment for $740 but our first mortgage was $730. So we technically paid more thanks to maintenance and property taxes, but we also could sell the place right now for $110,000 in less than 2 days or $125,000 if we were willing to put in a few months. So it ends up being cheaper overall. But home ownership does mean maintenance and that is stressful and is definitely not for everybody.

    Our first home is now a completely paid off rental, but we have a big new home. So we pay $990 a month for our mortgage and put aside another $1100 a month for the two sets of property taxes, insurances, etc. $2100 total for housing. We receive $1850 in rent from the first house and our friends in our house. So our overall cost for housing is $250 a month plus maintenance. Can’t rent for less here.

    Just another side of the coin in a different location…

    1. J. Money January 21, 2015 at 2:30 PM

      I’m glad you stopped in to share with us too – that’s what I love about blogging, we all have different views and can then see which is best for each of us!

      So thanks friend, always appreciate it :)

  29. Winn January 21, 2015 at 12:36 PM

    Your advice to focus on feelings and to ask “what would make me happy today” is probably your best yet! As you said, life is so much better when we follow our feelings. I am a homeowner and landlord because it feels great to me. Love to hear of those who rent because that feels good for them.

    1. J. Money January 21, 2015 at 2:41 PM

      I’m glad you agree! I know there are tons of people reading this and also probably unsubscribing since money is factual to them. So I’m glad you’re not one of them ;)

  30. Merrin January 21, 2015 at 12:38 PM

    We own a small 2 bedroom low maintenance home – we worked out that it was going to cost us less each fortnight including rates(property tax) and maintenance to buy than to rent. Is it our dream home – no. but we think of it as renting money rather than renting property. It gives us forced savings in the form of principle.(we are better at paying of debt than saving). And as the price goes down so does the interest (money rent) that we pay. It works for us. I don’t think that you can take emotion out of finances. Me personally I love being able to change the paint colour and I enjoy owning a home. it isn’t for everyone and it’s not always the cheapest option, but I just wanted to give another view point.
    PS I’d get the new dishwasher if you have problems the warranty will cover them for the next year.

    1. J. Money January 21, 2015 at 2:43 PM

      Thanks Merrin! I think we’re going to pull the trigger on that new dishwasher. Glad your home is working out as planned :)

  31. Joe January 21, 2015 at 1:19 PM

    We spend about $2,100/month on housing so about $25,000 for the joy of owning a home. You gotta live somewhere and we love our condo so that’s the positive. I’d love to spend less on housing at some point. Maybe in 15 years the home will be paid off and we’ll have extra money to invest.

  32. cynthia cummins January 21, 2015 at 1:39 PM

    Terrific post. I will share far and wide. As a longtime Realtor in San Francisco, I often remind would-be buyers to cooly consider WHY they’re hot for homeownership. Don’t get me wrong: I’m happy to help them buy. Yet the American Dream has turned into the American Compulsion. I know lots of contented tenants, and I just happen to be one myself. As I’ve written at RealEstateTherapy.org: “What matters…is the presence and acceptance we bring to every moment of our lives, regardless of where we sleep, where we hang our flat-screen TV, and whether or not we have parking or low HOA dues or directly-accessible outdoor space.” First, home is home. Second, home might be an investment.

  33. Michelle Marcus January 21, 2015 at 2:15 PM

    Annnnnd that’s why I’m getting my condo ready to sell. I cannot wait to be out from under it.

    This is my second condo that has lost money and I’ve had to throw a ton of money in to repair it. Totally not worth it.

    1. J. Money January 21, 2015 at 3:22 PM

      Yuck – sorry to hear!

  34. Stacy January 21, 2015 at 2:27 PM

    Wow! We are really fortunate. Bought our house in 2011 when the prices were almost at the lowest. Our house is now worth $40k more than we paid. And we refinanced to get a 15 year mortgage with a lower interest rate. So no PMI and we are paying it off quickly. Also our homeowners fees are $25/year and our neighborhood is right next to a ton of nice new development. Next year we are going to have a Whole Foods across the street! Anyway, we are happy with our house and love to do projects to fix it up for us and to up the value. I’m sorry you’re plowing through so much with your place but I’m really glad we bought when and where we did.

    1. J. Money January 21, 2015 at 3:53 PM

      You’re much smarter than I – and now it’s paying off :)

  35. Even Steven January 21, 2015 at 2:34 PM

    I like to think of home ownership as sacrificing today for tomorrow. I’m a landlord who lives in the property so my little sacrifices are paving the way towards our financial independence. Don’t get down on the home ownership it will come around.

  36. David January 21, 2015 at 3:04 PM

    Total: ~$6,000
    Mortgage: – (paid off last year, ~150K home value)
    Property Tax: $4016 (Texas = no state income tax, higher property tax)
    Insurance: $1000
    Home maintenance : $450? – No major issues this past year. Had the carpets cleaned twice (kids are 6 and 2; many messes). Washing machine was temporarily out of service, but YouTube taught me to fix it in 20 minutes and under $20.
    Lawn Maintenance : $800
    We spray for weeds and have other people mow the lawn. It’s “expensive” but I’m MUCH happier not mowing in 100 degree weather; I’m also ginger, so avoiding the sun will likely lead to a longer life. With the kids playing in the yard most days, this is a well worth it, in my opinion. If you disagree, give me a quote for what you’ll do it for ;-)

    1. J. Money January 21, 2015 at 3:57 PM

      “I’m also ginger, so avoiding the sun will likely lead to a longer life. ”

      Hahaha… almost spit out my coffee on that one.

  37. Kim January 21, 2015 at 3:37 PM

    It would make me really happy today if we owned 10 rental properties. I am 100% for home ownership if you buy a home that doesn’t keep you poor. Rentals are stressful and can be expensive, but ours will be paid off in about 8 years and then they are going to let me walk away from my day job if I want. As far as the house we live in, I wish it was a bit smaller, but I don’t regret it at all.

    1. J. Money January 21, 2015 at 3:58 PM

      You know, if all my job was to maintain a plethora of income properties I could get down with that. It’s doing that PLUS a main job and hustles where it starts to get overwhelming, at least for me. Maybe I’m just an All In or nothing type guy?

  38. Kayla @ Everything Finance January 21, 2015 at 3:59 PM

    I “bought” a house after college and sometimes I still regret it. There’s just not many choices here in my rural hometown. If I could’ve rented a while longer I probably would’ve.

  39. Syed January 21, 2015 at 4:05 PM

    Home ownership is definitely a challenge compared to renting, but thank God for Youtube tutorials I was able to do a bunch of things myself around the house because of them. I guess making you a well rounded person is another benefit?

    What would make me happy today is having a great day at work, spending quality time with my family and seeing my son laugh. Seriously just seeing him laugh is all it takes nowadays.

    1. J. Money January 21, 2015 at 4:49 PM

      Awwww, that’s awesome.

      Kids similes are the best – maybe after their hugs :)

  40. Tanya January 21, 2015 at 5:24 PM

    This post could not have been more timely! My husband and I are in the process of selling and closing on our house, and we’re going back to renting, for awhile at least. I am SO EXCITED at the idea of not having to give a hoot about things breaking down, maintenance, lawn care, HOA fees, if a hurricane destroyed our house (we live in FL), etc.!!!

    Some of our friends and family think we’re crazy, but we’re selling our house and using our profits to pay off my $38,000 student loans! Also, our new monthly living expenses will be around $650 less than they are now owning the house.

    I agree that both renting and owning can be appropriate and it just depends on your situation financially, personally, and emotionally. Thanks for a great post.

    1. J. Money January 25, 2015 at 9:34 PM

      Oooh la la congrats! And SMART about knocking off those loans once and for all – exciting indeed!

  41. Shannon @ Financially Blonde January 21, 2015 at 5:56 PM

    I am with you and hate home ownership. The only reason we “own” our home now is because we want to live in a good school district for my son and living in a good school district (at least around here) means not many rentals available. The second he graduates high school, though, this house is going up for sale and I am all about renting something and letting the “joys” of home ownership cost someone else money.

  42. Courtney January 21, 2015 at 6:03 PM

    I owned a house for four years, and constantly resented the time that went into general upkeep (not to mention all of the $$). I sold the house in October and moved to a rental in the city, and I haven’t regretted my decision for a single second. The thrill that I experience during my 12-minute WALK to work every morning is well worth the money I lost by walking away from home ownership.

    1. J. Money January 25, 2015 at 9:36 PM

      You make a good point about the *time* suck too outside the financial woes. It can def. suck up a lot of energy!

  43. Martin January 22, 2015 at 12:00 AM

    What makes me happy is challenging myself. I try to attend a BJJ class, do some weights, or maybe write about something new every single day.

  44. Jacques January 22, 2015 at 8:48 AM

    If you had asked me that question on my two previous homes, I would’ve whole heartedly agreed with you.

    Matter of fact, our second home was hands down the worst thing we ever got ourselves into.
    We bought it in late 2005 and by 2011 our homes value dropped nearly 65%. Couple that with an 80/20 loan and a dash of slightly high interest rates between those two loans to qualify, and we were sitting on close to a $1700 payment per month with HOA on a $185k home. Couple that with our annual maintenance and taxes, we were averaging around roughly $22k a year.

    Like you, we were seriously underwater and wanted a break (cause we didn’t get much of one from our first house either.

    Thankfully, I finally decided enough was enough and did a strategic foreclosure. We bought in to our 3rd home with some savings, but here’s where things finally went our way.. we bought in at the ‘right’ time.. 2011.. right in the middle of that lovely downturn in the economy.

    We bought when the markets had bottomed out, when interest was low, and we were fortunate to scrounge up enough to get a required down payment that would get us approval while still in our 2nd home. We then went through some legal hurdles to say we tried to find renters for our second home (but suprisingly no one else wanted to pay roughly what we did on that place per month.. go figure). We floated for about 2 months then finally gave our lender notice that we were no longer going to pay the mortgage on the place and to start foreclosure procedures.

    Here’s how our timing/scenario worked in our favor..
    Interest rates at a record low.
    House bought as a bank owned property.
    No HOA’s
    Low Annual Taxes

    All of that equated to getting in to a house that gave us a $585 a month mortgage, less than $1k in annual taxation and getting a good chunk of the ‘fix its’ knocked out a part of the negotiation on the purchase price with the bank.

    We now average less than $9k a year for the whole shibang (minus utilities).

    The old adage about ‘location, location, location’ may be true. But much like the stock market, timing can make all the difference in the world with regards to investments (I know, you don’t consider home ownership an investment, but here’s the sitch.. our homes estimated value has risen by close to 35% in the last 4 years.. granted we leveled off since the market has snapped back to a more normal state, but that’s interest in our pockets when we decide to sell down the road, on top of the equity we put in to the home, which should keep abreast of inflation and maybe a point or two on top of that).

    Enough of my blathering.. just a counterpoint. Homes can be a benefit.. just gotta know when to hold’m and when to fold’m ;)

    Big fan by the way! :)

    1. J. Money January 25, 2015 at 9:40 PM

      Indeed my friend, indeed . Plenty of perks to owning if it’s a right fit outside of the financial ones. Thanks for sharing (and reading! :)).

  45. Chris January 22, 2015 at 10:11 AM

    About $3k. It’s great to have no mortgage. This is taxes, insurance, maintenance.

    1. J. Money January 25, 2015 at 9:42 PM

      Holy hot dogs! Can I move in???

  46. Alicia January 22, 2015 at 12:32 PM

    Ha, your numbers sound pretty much like mine. I haven’t dumped $75k into it over the last two years, but the renting isn’t “making” me money. Yes it’s giving me equity, but I can’t pay my tax bill with equity! I’m so over the renting a home as part of my financial picture. It’s just frustrating, and also a dumb mistake on my part as well. Ah well, it led to other things.

    1. J. Money January 25, 2015 at 9:41 PM

      “I can’t pay the bills with equity” – hah! I’m totally stealing that.

  47. andrea January 22, 2015 at 1:44 PM

    It’s hard to focus on the future financial benefits of owning a rental/income property when you’re facing issues that cost you big bucks to fix NOW. For instance, last summer I had septic tank issues (the toilets were backing up into the bath rub–eek!) at my vacation rental with weekly guests checking in every Saturday for their SUMMER VACATION and I had no choice but to get it pumped each time they backed up. I spent over $1,200 to pump the tank for a short term fix even though I knew ultimately it needed to be replaced. Unfortunately, I had to wait until the final guest booking for the summer before replacing the entire system for $4,500– ouch! Plus, I need to re-landscape the front yard since trees were removed and the lawn was dug up, and who knows how much that’s going to cost. Sometimes, I just don’t know if the stress and short term costs are worth it!

    1. J. Money January 25, 2015 at 9:42 PM

      Ouch indeed, boy… sorry to hear that. Hopefully it’s your long term plan to keep it around and then you’ll be more than making up for it when it’s paid off and just a nice influx of cash :)

  48. Mr Ikonz @ ProjectIkonz.com January 22, 2015 at 5:02 PM

    There’s no doubt J. Money that renting in today’s environment can be cheaper than owning (especially depending on when you bought your home), but you don’t have the advantages that ownership brings with it (such as the ability to paint the walls any colour you want!!).

    I still think rent money is dead money. You are building up equity in your home every year!

    1. J. Money January 25, 2015 at 9:44 PM

      I’ve realized long ago I can live a nice and happy life despite the color of my walls :) Which definitely wasn’t the case 5+ years ago.

  49. Kim @ Money Under the Cushions January 22, 2015 at 7:27 PM

    I “own” with the hubby. I do go back and forth about it. Especially last year when we replaced the roof and had three trees cut down. This year the deck needs to be painted … it’s always something. But I guess ultimately I’m one of the 90% because I don’t know that I feel like I could ever really be settled in a rental. It’s not “mine.” Although this whole idea of really owning it is a farce in a way. I wouldn’t mind being like the woman who lives on a cruise ship. Now THAT I could do. :)

    1. J. Money January 25, 2015 at 9:44 PM

      Yeah! haha… that woman is blowing through some money too, jeez… what was it, $160,000 a year to live on that cruise ship? does sound dreamy despite that :)

  50. Dividend Mantra January 23, 2015 at 12:26 AM


    Couldn’t agree more, bud. I’ve rented all my life and plan to continue doing so. I’ll rent my way to financial independence and stay a renter once FI. Those who think you need to own your own home to become financially successful are just plain wrong.

    Home ownership is great for some people. Others, not so much. Best if you find which side of the line you stand on and act accordingly.

    Best regards!

    1. J. Money January 25, 2015 at 9:46 PM

      Interesting, didn’t know that about you good sir. I do know quite a few people who have retired early and don’t own though, so maybe it’s more popular among that crowd? Falls inline with all that freedom?

  51. Jim January 23, 2015 at 9:58 AM

    While I’m seeing the math clearly, the wording is causing me a little confusion.

    Are you talking about a rental house which is an investment, or a home in which you live?

    Talking about a rental, I personally wouldn’t want to own a house. While there’s potential for long term money from investing in it, it is messy and emotional and more work that I think it worth the returns.

    But if we’re talking about a home in which you live, the calculus changes. Remove the property management fees, and you’re down to $26,050.71. Include the principal paid, and you’re below the $20,100 rental cost at $19644.87. I’m not including the mortgage interest deduction, as standard deduction might be better for most.

    For me, I want to be a home owner to get away from the parental nature of landlords. I don’t want to have quarterly inspections, I don’t want to be harassed for my balcony being out of regulations (the plants were dead, yes I was bat at watering them, but don’t threaten eviction over it). I want to have a home and a garage where I can be less worried about my car being broken into (which has happened to me, and others in the apartment complex). After 5 years in the Army, and 7 more in apartments, I’m sick of it.

    What would make me happy is the ability to change the space that I live in, to be more frugal, more relaxing, and just a better fit to the way that I want to live. If I want to paint, or use LED light bulbs, or knock out a wall. So even if it is a poor monetary investment, it is an investment in the quality of life that I want to have.

    1. J. Money January 26, 2015 at 12:05 AM

      It sounds like you know yourself well and home ownership is the right solutions for you :)

  52. Angie January 23, 2015 at 12:45 PM

    I love this post and appreciate the alternate perspective! I bought my first home 6 years ago in a low-cost of living area and near a major university. It is a single family home with 3 bedrooms and 2 1/2 baths, and while living in the home I was able to rent out the two additional bedrooms to cover the mortgage ($700) and other utilities. After that decision I went in over my head and purchased a fixer-upper that ended up needing more work than I expected. That was four years ago, and that property never generated income for me and only recently have I found a buyer who is only willing to pay me enough where I will end up breaking even on the sale. I have since moved from that area (I am currently renting) and am considering whether it would be a smart move to purchase another investment property in a nearby city where housing is dirt cheap and also near universities. My first home is still generating income as a rental, but the second home serves as a cautionary tale of what not to do. And while I like the income potential, the time and effort that landlording can take does not always appeal to me as a single woman with very little construction expertise (though there are property management companies….). I still haven’t decided, but you have given me much food for thought ;)

    1. J. Money January 26, 2015 at 12:08 AM

      I think that’s the most important takeaway to all this – stopping to consciously *think* about major decisions and how it affects our lives irrespective of how others may feel. And often times that’s hard if you’re secretly wishing to go against mainstream thinking :)

  53. Iron Mike Sharpe January 23, 2015 at 1:44 PM

    $10,030 last year for Mortgage + property taxes + insurance + HOA on a 1200 sq ft townhouse. Also, set aside $1200 for future repairs.

    I’m finishing year 2 of a 15-year mortgage. After which $5800 of that disappears.

    1. J. Money January 26, 2015 at 12:09 AM

      Rock it! I hope we’re as smart as you picking up a 15 year if/when we go down that route again!

  54. Gary @ Super Saving Tips January 24, 2015 at 12:57 PM

    Interesting perspective, and certainly homeownership is not right for every person and every situation. For me, I compared the cost of ownership of my 2BR 2BA condo with the updated rent of the 1BR 1BA apartment I used to have (just 2 miles away). I come out ahead with the condo, without even considering the equity, the tax advantage, and the larger space. What would make me happy today is to further accelerate the pace of paying off my mortgage and that’s why it’s one of my goals this year.

    1. J. Money January 26, 2015 at 12:10 AM

      Great goal to have :)

  55. C. Fruity January 27, 2015 at 12:50 PM

    Thank you for this awesome post. I always read things about owning a home being smarter in the long run. We are so young and how do we know where we want to stay? and the taxes and repairs that you pointed out – clearly owning is not the right choice at this time. It’s good to see some numbers out there.

    1. J. Money January 31, 2015 at 3:34 PM

      I’m glad it helps put things in perspective :) Home ownership is, of course, a great path to go down when things align, but it’s not necessarily the *only* path to go down which I think is important to know.

  56. Charissa January 31, 2015 at 6:07 PM

    This post was a brilliant explanation of the pros and cons of renting compared to owning. I am still proudly renting (and getting weird looks every time I tell someone I am not in a position to buy a house). I have had several people pass on a ‘great buy’ on a house for $50,000 or less. I always wonder what is wrong with the house to make it so cheap and how much additional money I would have to sink just to make the house livable. No thanks! I want to become a house owner eventually, but am perfectly happy renting since I would love to save up and purchase a home for cash.

    1. J. Money January 31, 2015 at 8:19 PM

      Sounds like you know yourself well :)

  57. Deborah February 13, 2015 at 12:43 PM

    This is timely. To cash out and rent or to cash-out re-fi and fix? That is the question. We have about 400,000 in equity. The over-priced 1922 “charming” shack needs a new foundation. Cha-ching. The roof is old only leaks sometimes…that we can see. And I could use a little dough for my daughter who is off to college this fall. Oh yeah.

    1. J. Money February 13, 2015 at 4:50 PM

      Well I’d pick the cash out option and rent all day, every day, but obviously I’m pretty skewed here ;) Either way $400k in equity is a nice “problem” to have!

  58. Sue April 4, 2015 at 2:26 AM

    No, the principal paid is your equity, your money. Subtract that and see if you can get the same size, perks (how + property management??) and location of the home by renting. I bet you still win. There are too many articles lately without objective base, yes, a home is an assets with a maintenance, same with owning a car, you don’t want to maintain then “rent” a subway, a taxi, a bus etc. Don’t buy if you don’t have an ownership mentality, counting every pennies spent. Lastly, the interest is the cost of capital, the higher the amount the less you actually can afford buying. It was not the home’s fault.

    1. J. Money April 6, 2015 at 1:54 PM

      “It was not the home’s fault.” – hah! quote of the day right there.

  59. Peter September 15, 2015 at 6:27 PM

    Great article! I used to argue with people on how your home you live in will never be an investment. But then I realized that if that’s the best investment route they know, that’s too bad. As Robert Kiyosaki says, if it takes money out of your pocket each month, it’s an expense not an investment.
    Also, from my own personal experience, owning a home for a longer time is still more expensive than renting. We bought our house over 19 years ago, accelerated our mortgage and paid it off in 12 years, the value is almost double, but if I were to sell it I still wouldn’t recoup all the expenses. And you never truly own your own home. If you don’t believe me and you are one to have no mortgage, stop paying your taxes and see who owns it after a year.
    Buying a home to live in is no more an investment than the ones Bernie Madoff was selling.

    1. J. Money September 22, 2015 at 4:32 PM

      Hah! Preach! :)