OKC Real Estate Market

[bison34]

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

[Pete]

You can get a very low-interest loan against your equity at any time.

In fact, you can take out almost all the down payment you put in.

You can also use your house as collateral for other loans. It's a true asset and you absolutely do not need to sell it to access the equity.

[Teo9969]

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Outside of the earliest years of ownership, it's almost surely not a liability.

Almost all assets have a liability factor. Assets don't have to produce cash to not be a liability...but even taking up that argument:

If rent in your area is around $1,500 for a property equivalent to your home and the interest, taxes, and insurance only totals to $1,350 (even though your mortgage payment is $1,600), you are effectively improving your balance sheet by $150.

Opportunity cost is an actual cost. People talk about the cost of raising kids from a money out the door equation but I can assure you I have left 3x more money on the table than I've spent on my child because I don't have the time or energy to go make that money. Same can be said of delaying home ownership in all but a few markets in this country.

And ditto on the equity tapping. I've done that so many times and it has allowed me to do so many things from consolidating debt to buying vehicles outright, purchase other property and even invest the stock market (still kicking myself for not immediately plowing all of my cash out refinance proceeds into the S&P in 2020)

[gjl]

The only time I ever rented was before the age of 22. Home ownership from then is allowing me to now live in a $350-$400k house on a 1 acre property that has been paid for since 2011 for only the cost of taxes and insurance. Maintenance and repairs is not very much and what ever is needed I can usually do myself. Been that way my whole life. No one can do things like I can do them or want done. Some major things I've paid for over the years like a new sewer line, new HVAC, both baths remodeled, kitchen remodeled. Even some of the remodeling I've done parts of. All major repairs don't even come close the the appreciation in value the house has gone up since 1996 when I bought it. Things like minor plumbing and painting I can do. At age 69 it is nice to have that equity in my retirement years should I need it and the cost to live here is easily affordable in retirement.

[OKCRealtor]

Outside of the earliest years of ownership, it's almost surely not a liability.

Almost all assets have a liability factor. Assets don't have to produce cash to not be a liability...but even taking up that argument:

If rent in your area is around $1,500 for a property equivalent to your home and the interest, taxes, and insurance only totals to $1,350 (even though your mortgage payment is $1,600), you are effectively improving your balance sheet by $150.

Opportunity cost is an actual cost. People talk about the cost of raising kids from a money out the door equation but I can assure you I have left 3x more money on the table than I've spent on my child because I don't have the time or energy to go make that money. Same can be said of delaying home ownership in all but a few markets in this country.

And ditto on the equity tapping. I've done that so many times and it has allowed me to do so many things from consolidating debt to buying vehicles outright, purchase other property and even invest the stock market (still kicking myself for not immediately plowing all of my cash out refinance proceeds into the S&P in 2020)

I stress this all the time, it's the most expensive cost of all when it comes to not owning. I also stress at a minimum everyone max roth IRA contributions early as well. I'm not a financial advisor but simply just buying property at a young age + maxing roth IRA yearly will set you up big time later on. These are just what I'd consider basic & fundamentals to get you way ahead years down the road. The opportunity cost of not doing either of them is detrimental, lots of six - eventually 7 figures.

[bamarsha]

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Do you consider a 401k a liability also? I mean, the stocks could go down, right?

[bamarsha]

I stress this all the time, it's the most expensive cost of all when it comes to not owning. I also stress at a minimum everyone max roth IRA contributions early as well. I'm not a financial advisor but simply just buying property at a young age + maxing roth IRA yearly will set you up big time later on. These are just what I'd consider basic & fundamentals to get you way ahead years down the road. The opportunity cost of not doing either of them is detrimental, lots of six - eventually 7 figures.

Two steps often deemed more important that the Roth (though not available for all)... First, get the employer match on the 401k. Second max out the HSA contribution on a high deductible plan (can invest over $3k, with tax benefits). But I am not a financial advisor either.

[jn1780]

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Have to live somewhere though. Hopefully if you played your cards right that house will pay your assisted living bill in the final decade of your life or a less depressing viewpoint of downsizing to a smaller home.

[OKCRealtor]

Two steps often deemed more important that the Roth (though not available for all)... First, get the employer match on the 401k. Second max out the HSA contribution on a high deductible plan (can invest over $3k, with tax benefits). But I am not a financial advisor either.

Sure if you have access to a 401k then you've got another consideration but many don't. I never did, personally. I invest in SEP IRA's in addition since I'm self employed now but I still max out our Roth's even though it's a smaller amount because tax free investment > all and I started those many years before I could take advantage of a SEP.

If you just buy a house young & take advantage of Roth's if you do nothing else you will still be totally set if you stay the course. Even doing it for a decade starting in your 20's gets you multiple 6 figures ahead of peers who didn't by time your in 30's. I consider these foundation pieces for majority of scenarios and of course there's a lot of other opportunities to be had depending on your situation.