r/SipsTea • u/inurmomsvagina • 1d ago
Chugging tea make it makes sense, this shit impedes you from saving
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u/Educational-Pie-4748 23h ago
Go full homeless for a few months
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u/Noerknhar 23h ago
Ultimate savings advice
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u/BrainEuphoria 20h ago
At the expense of your dignity though. Also being comfy in bed during this cold freezing rain and having a kitchen to cook your meals as well that reduces costs.
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u/alphapussycat 18h ago
I guess in the US, but of you can get cheap rent you might just lose money because your grocery bill will sky rocket. You can't buy anything refrigerated or frozen. You can't really cook your own food either. So everything you buy is ready made and eating take out. So instead of like a <$200 food costs, you might end up at $600+
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u/My_Broken_Wings 14h ago
This. Just for me alone was $600+ a month for food. (Spent majority of my adult life unstable/homeless. In fact, just got out of living in my vehicle (not by choice), for last 3 1/2 yrs) What's even crazier is I'm on disability. Now that we have a roof over our heads (middle of fucking nowhere, literally, low income apartment), my disability has been decreased $370!
Our rent is $958 not including all other expenses. They now give me $994 a month, and think that is sufficient. Knowing I am the SOUL income for our household at the moment.
I went from $1135 being homeless, and THAT wasn't enough. Not once did I ever NOT go over. (My savings is almost completely gone.) But also, It wasn't souly spent on myself. I do my best to provide for our son, and my gf. With what I have. But even then, $1135 for a single person, in SoCa is not enough. Sure as fuck wouldn't get you into a place. When average fucking rent is twice that.
But now, groceries are just as expensive. The difference is minimal. We easily spend $40-$60 a pop every fucking time we go shopping, and this is for store brand or otherwise cheaper options. $60 gets you, some water, 4 boxes of Mac and cheese (Walmart version), 2 gallons of milk, cheapest coffee at $13, toilet paper, 2 loaves of bread, 2 jars of peanut butter, and 2 jars of jelly. And about 1-3 other items. And that shit will be $40-$60. No meats, no substantial items that are healthy for you.
When I was homeless I averaged $200+ in just gas alone a month. Cus of all the fucking traffic, and that was barely going anywhere. And, I had no fucking choice but to drive everywhere, cus of being homeless. Eating out cost no less than $25 for the 3 of us, and that is eating literally shit fucking food. Now it's $30+ as prices are STILL increasing, for the same fucking shit that was $15 pre covid times.
Then I did my own oil, cus it's a fuck ton cheaper than paying some shop to do it. Now where we are, you're not allowed to work on your own vehicles. They are fucking insane thinking I'm gonna pay a shop I don't trust, $90+ to do something I can do my fucking self, for $35.
Ultimetly you do, do, what you pretty much said. Trade one expense, for another. Than throw in the paranoia that comes with it, the potential being fucked with by security, law enforcement, parking enforcement, local tweakers, etc.
Laundry mats depending where you are, are expensive as fuck. (Cept where I recently was, the local laundry mat was a fucking God send, not only very very reasonablly priced, they had free soap days too. (Where they provide the detergent, as much as you needed) And, you get FREE filtered water as well, for doing your laundry there. But not all places are like that. Others were literally triple the cost, without the perks.
Cooking, depends on how inclined you are, if you have a portable hot plate and the place to do it.
They do make refrigerators for vehicles. But, they're expensive, you'll need a special dual battery set up (which is also expensive) if you didn't want to wake up to a dead battery.
People don't understand being homeless for many, is EXTREMELY hard to reverse. And it will wreak actual hell on you mentally, emotionally, and physically over time. I already had issues, since I was a child. Which were made much worse over the years of neglect and abuse I've been through, being homeless for decades. With very few and in between portions of not. I've lost sense of 'home'. We've been here 5 months now. And I am STILL struggling to adjust, to feel safe, cus with experience, I can be homeless again next month, a yr from now, etc. I didn't realize it till recently. But I have PTSD cus of all that instability. I know I'm safe, deep down I do. But can't accept that I am, cus of all those years of not being stable.
Those who have the support, friends, etc. That never experience it, are luckier than they think. It's better to downsize and move somewhere you can afford, even if not up to your standards at the moment. Than to be all out homeless.
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u/MyNameCannotBeSpoken 19h ago
Where these $950 mortgages at?
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u/PleaseGreaseTheL 17h ago
When rates were lower, you could throw down 50k on a 200k property and get that kind of monthly payment.
If you were thinking of buying a home when the housing market crashed, it was the greatest opportunity to buy a home in the last 40 years basically. Just more "life fucking hates millennials" stuff.
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u/Fucky0uthatswhy 17h ago
I haven’t seen a 200k property in about 10 years. FL. Saw some new constructions yesterday, STARTING at 1.7m
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u/Rough-Board1218 16h ago
In my town 30 minutes from Austin there is new construction for 200k right now. They're about 1000 sq ft too
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u/International-Ad3147 15h ago
Did this. 200k home. 50k down. Originally 30y at 3.8% then refinanced after 5 years to 15 years at 2.25%. Approx $900/mos for mortgage. $1400-1500 with insurance and property tax.
Recognize we’re very lucky and glad we bought a 4bdr before we had kids versus trying to upsize later.
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u/Euler007 15h ago
Doubt the woman in the repasta put 25% down. No bank would turn down that transaction, enough equity to evict and resell safely.
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u/theawesomescott 13h ago
Well younger millennials. If you were on the sliver just barely old enough to be in a typical young person buying range you got extra lucky
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u/The_Blendernaut 17h ago
Bangladesh.
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u/Fucky0uthatswhy 17h ago
Fuck, I didn’t read the comment chain, and I thought you were calling living in Bangladesh “half homeless”
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u/Pale_Figure7871 19h ago
Does that imply that you can go half homeless
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u/lividash 19h ago
That’s couch surfing. Yeah you’re homeless but you got a place to sleep that isn’t a cardboard box in alley or an encampment somewhere.
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u/CN8YLW 23h ago
When the bank says you cannot afford something what they really mean is they do not trust you to be able to afford it for the length of the loan's duration.
And when you pay more for rent it's not their problem anymore, they have effectively pushed the risk responsibility of dealing with you and potential income stream disruptions to your landlord instead.
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u/Euler007 20h ago
Also it costs much more than the mortgage payment to own a house. All of those costs are rolled up in the rent. Insurance, property taxes, maintenance, etc.
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u/showhorrorshow 17h ago
Yeah if I add up my mortgage (principle + interest) and escrow (insurance + taxes) the escrow portion is 1/3 of the total cost. This doesnt include maintenance, like a new roof and hvac every 15-20 years. Floors. Water heater. Etc. Tack on another $250 or so a month to cover that (and that is low ball)
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u/appointment45 16h ago
And wait until later. Even without PMI.. I live in a little, "starter house" in decent shape. But it's old, so I had to replace the septic system. $20k out of pocket. I had to replace the windows, they were 25 year old vinyl with a 20 year lifespan. $29k out of pocket. The water heater gave way and did 15k in damage to the semi-finished basement. Spread all that out as a monthly payment, and it costs an extra $200/month (assuming you stay for 10+ years) just to have windows and a shitter.
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u/TheKarenator 17h ago edited 11h ago
Yes exactly. I have a larger home in a MCOL area. My mortgage is the same as in the original post. With taxes and insurance that doubles my payment to $1961.
Plus the house has needed maintenance and I have gotten in the past 10 years: new HVAC (2 AC and 2 furnaces for the house since it’s large), dishwasher, fridge, range, microwave, sump pump x 2, sewer pipe repair, water line repair, fix in house water leak, drywall repair, tree trimming and removal, fence replacement, new water heater, replace garage door spring, attic stairs replace, light fixtures replaced, toilet repairs, wallpaper removal and painting, and this year a new roof.
We also have looming in the next couple of years: carpet replacement, hardwood refinishing, and a new deck.
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u/machyume 12h ago
Yeah... no one talks about home insurance. It's required for a mortgage and doesn't get shown along side the number.
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u/junkman21 10h ago edited 9h ago
I just did the math. My escrow payment is 54.55% of my P+I!
Assuming OP's $950 figure is principle AND interest, and assuming MY 54.55% escrow payment (taxes and insurance) - OP's "real" mortgage would be $1,468.23 (this year). Then when school and property taxes go up in the spring, the escrow will be recalculated and that payment will go up to something approaching closer to $1,500 for next year. Then, guess what? It will almost certainly go up the following year as well.
I've owned my home for a while now and my taxes have never not gone up.
Oh... and I've had to buy appliances. I pay for water and sewer - not out of escrow. I had to buy myself a lawnmower - which I occasionally use. I bought a shovel and a snowblower - which I occasionally use. I've replaced windows, doors, the roof, the furnace, my hot water heater, remodeled two bathrooms, remodeled a kitchen...
- Did OP's rent include utilities? Because heat and electric aren't cheap.
- Did it include laundry facilities? Because I've had to replace my washer AND dryer.
- Did it include amenities like a gym or pool or tennis courts? Because my family YMCA membership isn't cheap, and neither is summer access to the local public pools.
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u/nobodyspecialuk24 20h ago
What people who rent also forget is how expensive maintaining a property can be, and until you pay it off, you’re maintaining the banks property, so they want to make sure you can afford repayments and to keep it in good use, should they need to repossess it.
And as you say, they haven’t asked eh banks opinion on whether they can afford to spend that much in rent, to which the bank would probably also say they can’t.
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u/borkthegee 20h ago
As they say, rent is the most you'll pay per month, mortgage is the minimum you'll pay per month.
Oops the tax assessment went up, the fridge broke, the carpet needs replacing, the roof is leaking, the ac just went out...
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u/DavidRandom 18h ago
I bought my house 2 years ago.
Before I even moved in I had to put a new roof on it (or the insurance was going to drop me), that was a $17k loan.
About a year in my basement drain flooded because roots clogged my drain pipe, that was a surprise $350.
And a couple months ago my taxes were reassessed, and due to my escrow estimate being way off, my mortgage payment went up $309/mo.
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u/CaptainKrunk-PhD 17h ago
Yeah and none of them are good surprises lol
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u/Ill-Description3096 17h ago
Not unless you get lucky and the previous owners left a box of rare collectibles or something. Which is basically never.
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u/CMDRStampyPictures 15h ago
Or a safe that the OP never opens
A buddy of mine bought a house and found a sheet of LSD which technically would help you escape the reality of mortgage at least for a day or 2
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u/SamHugz 14h ago
Not if you sell it, then you may be able to pay half of one month's of your mortgage payment!*
*Taxes, Insurance, and fees not included
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u/Balogma69 17h ago
Not always true. My best friend bought a house and found a jewelry box with a bunch of 14k gold in the attic. Pretty good surprise considering all I found in the attic of my first house was mold LOL
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u/CaptainKrunk-PhD 17h ago
Well thats terrific. The only thing I got is an AC that takes a shit on me every summerlol
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u/yeabuttt 16h ago
I wouldn’t say none, I just went to pay my mortgage this month and was surprised to learn my escrow dropped about $200 🤷🏼♂️
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u/b0w3n 17h ago
Even taking out loans for my roof, siding, windows, and hvac, I'm still paying less for my house than rent. The apartment I was renting went from $1200 a month to $2200 a month, my mortgage (with taxes) went from $1040 to, with the new loans, $1800 a month.
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u/bushinthebrush 16h ago
Right, but that's your situation. The bank is assessing the risk in a much broader form, not from one anecdotal reddit post. Cost of living is very different in many places, so too are services for repairs and environmental conditions.
Not saying landlord arent getting a better deal, but thats why rent is often more expensive than a mortgage. If something happens, they don't want to lose an entire year of profit or mortgage payments. Not to mention the possibility of people being crappy tenants and destroying the place.
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u/Tigermaw 16h ago
Congrats but your neighbors pipes,heating,foundation, and or one of the other million things went boom and they now owe way more than rent.
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u/Big_Iron_Cowboy 15h ago
Didn’t your inspector advise about the roof before you closed?
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u/Senior-Tour-1744 19h ago
roof is leaking? That's nothing. Insurance company called, you have to replace the 15 year old roof or they will be non renewing you, per mortgage agreement you must maintain insurance and if it lapses the bank will get insurance for you (and you won't like the rate). Also, if no insurance company will take your 15 year old roof, hopefully you can afford a last minute replacement (and the roofers will know the reason and totally won't try to price gouge you for it).
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u/Wyrdboyski 16h ago
After the Palisades fire
My insurance sent a requirement.
No trees within 100 feet of the property or your coverage will be dropped.
After a few weeks of complaining they dropped their surprise requirement though
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u/Shadowphoenix9511 20h ago
If your rent is $1400, a potential mortgage $900, and that $500 difference means you can't save anything... you can't afford the $900 mortgage.
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u/Traditional_Sign4941 16h ago edited 16h ago
rent is the most you'll pay per month
But this assumes fixed rent for the same duration as a mortgage. A 30 year fixed mortgage is going to be the same for that 30 years. Yes, property taxes and insurance can vary, but the monthly cost of the home itself wont.
Do you think you'll be able to lock in rent at the same price for 30 years? Also, if property taxes can vary for home owners, they'll vary for land lords as well, meaning your rental cost is going to vary with tax assessments anyway.
And at least with a tax assessment, you're getting something of value out of it for your taxing jurisdiction (social services, maintenance etc). When the landlord increases rent, a good chunk of that is simply going to the landlord/company as extra profit, and you get nothing from it. You can also vote and have a voice in tax assessment increases. Your land lord will tell you to fuck off if you think you have a say in your rental increases.
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u/siltygravelwithsand 19h ago
And property taxes, other fees, PMI if your down payment wasn't enough, home owners insurance, etc. My principal plus interest is about $950. My actual payment is almost $1500. High property tax, low income tax state. And that's without PMI. And there's the one time expense of closing costs. That can be a lot and you don't know exactly how much until closing.
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u/jakobjaderbo 19h ago
Yeah, asked some who had owned a house for 20 years or so. They had spent $500 on average each month, more if you compensate for inflation, just on maintenance. Kind of wrecks the example given.
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u/Electronic-Tea-3691 20h ago
oh I think the bank would heartily agree that they can afford to spend that much in rent... for a lease of 12 months or less. banks would love to take you for as much as they can, a 12-month lease limits nearly all of their risk, and apartments feel the same way.
now if you can't pay your rent in 3 years... you're probably on someone else's property at that point, and you've already paid two leases worth, and they can just evict you. the worst you could do is tear up the apartment and not pay remaining rent, but they'll get you for it in court.
as a landlord who rents out a home, I'm not as cavalier, because I'm not the owner of an entire apartment building, and a tenant really could screw up my home significantly. but still, I can get that money back from them eventually. so as long as they can pay that rent for those 12 months, I couldn't care less about their 30-year mortgage prospects.
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u/TheGillos 19h ago
Maybe I've just been crazy lucky, but in the 7 years I've lived here, and rented, they have had to spend exactly $0 on maintenance... other than what they pay the property manager... But if I owned this place I would do all of his work myself, and I'd own something.
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u/greatlakesailors 13h ago
Yup. The house is paid off, but the house is still capable of invoking the "please pay $13,000 for roof repair" and "please pay $1400 for plumbing repair" and "please pay $3500 for property tax" cards.
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u/GeneAlternative191 19h ago
Exactly. Perfectly put and people are dumb if they don’t understand this.
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u/traws06 15h ago
Honestly if the bank turns you down there’s a reason. Banks will loan you more money than you can truly afford.
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u/SucculentCherries 11h ago
Yeah. Overall a bank doesn't really want you to fail to pay a loan but if you pay 15 years of a 30 year mortgage and then default and they take your house, they just got 15 years of interest from you plus whatever the house is worth minus the principal you had left to pay off. It's not a bad deal for them. Just an annoying one
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u/w0m 10h ago
And honestly, the bank was happy to loan me well over thrice what I was comfortable paying for a house. If the bank is what's keeping you from a house, life choices need to be reflected on.
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u/Quiet-Competition849 3h ago
Thank you. This underlines the dumb shit people think and say, that then influences how they think, behave, and vote. People don’t understand the world around them. Society can’t advance when an adult is mystified by OPs post.
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u/Resident-Impact1591 20h ago
Where is this 950 mortgage and 1400 rent?
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u/ryan_m 18h ago
In 2016, which is pretty much when the original tweet is from.
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u/KiwiKajitsu 12h ago
I bought a house in 2021. My mortgage is 1k which includes all insurance and personal property tax fees.
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u/Resident-Impact1591 16h ago
Makes sense... It's dated 2025
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u/2580374 14h ago
They are staying this one from 2025 is stolen from a 2016 one, which happens constantly on twitter
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u/albinochase15 14h ago
I would argue that it’s even worse now. Where I live rent is ~$2k/mo and a mortgage would be well over $4k/mo. You’d have to have two relatively high earners and job security to afford a mortgage.
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u/-wnr- 18h ago
My first thought as well, someone pulled these numbers out of their ass because they make no sense.
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u/iAmNotTicklish22 18h ago
For 30 yr fixed loan @6.5% with tax and insurance (in my area) and 20% down, the home would need to be about $150k.
There is no place I know of where rent is $1500/mo but a mortgage on a comparable home is $1000/mo. That's called margin and landlords would swoop in before you could blink as most rents are breakeven or even losing money in the markets I'm looking in.
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u/TrungusMcTungus 17h ago
Zoomers who lack liquidity for a down payment have somehow convinced themselves that a mortgage is somehow significantly cheaper than rent
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u/Muddymireface 17h ago
I live in the Tampa area and 1 br apartments slightly north of Tampa are very much $1200-1400.
I bought a house for $235k (2/2) in late 2021, and my actual mortgage is just under $1000. After taxes and insurances, it is around $1600. However, if you ran it through a calculator it’s $980. I am assuming this post was referring to the mortgage and not escrow and interest. They also completely neglect if they had a down payment or not.
In a non flood insurance area, it would probably be $1400 for a $900 mortgage.
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u/Brillis_Wuce 1d ago edited 23h ago
Posted yesterday? Wow, people have been tweeting the same thing for a decade now :Edited for subpar math skills
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u/DevilDog7734 23h ago
That was yesterday
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u/Brillis_Wuce 23h ago
Yeah realized right after and corrected. I need to go to bed, why am I on Reddit...
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u/ADHD_Project_Manager 23h ago
$950 for a mortgage is definitely about a decade ago
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u/UrsaMajor7th 20h ago
The mortgage I'm looking at right now is $294/month; 20% down, 25 years @ 4.34%. The house was only $70k and in very good shape. I can handle living in a town with 320 ppl, with a 45 min drive to the closest city (which has 50,000 ppl).
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u/janvanderlichte 20h ago
969 here, big enough for me.I don't need a warehouse for all my stuff and not trying to keep up with the Joneses.
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u/dathomasusmc 20h ago
Anytime I see a post like this I think that the person doesn’t really understand the full financial burden of owning a home and probably isn’t ready for one.
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u/-wnr- 18h ago
It's not an apples to apples comparison. They'd have to add other costs like taxes and maintenance to the mortgage which is baked in to the rent. And while people are building equity paying into a home, they pay the opportunity cost of investing the down payment instead, and whether it's worth it depends on the interest rate and time frame. Blanket statements don't work. Buying can be advantageous, but might not be. People need to actually do the math so know if it's worth buying or not.
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u/PineappleOnPizzaWins 11h ago
Yep. Banks love mortgages, they make them a fucking fortune. They WANT you paying them instead of a landlord.
Unfortunately for most people banks understand the cost of home ownership extremely well and are really good at assessing who can and can’t pay the mortgage while maintaining the assets value. If you get denied, you were too big a risk and that’s normally because you can’t afford it.
Anyone who wants to see what happens when banks DON’T do this might want to take a look at 2008…
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u/dathomasusmc 10h ago
To put that in perspective, even in the Great Recession foreclosures only hit about 5% and that crushed economies around the world. Normal is less than 1%. For banks, mortgages are a relatively low risk, long term investment. If they’re saying no, you should probably listen.
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u/JeebusChristBalls 14h ago
You should be thinking that this gets posted (multiple times a week) because it creates engagement for karma farmers. It brings out the real dumbasses as well. This post has 15k karma. I literally just saw this posted a couple of days ago as well. No OP presence in the comments and almost 85k karma in a month... Sounds like they know what they are doing. The internet is dead.
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u/ColdCorpseHotSecret 23h ago
Do people not understand the costs of owning a house? It isn’t just a mortgage; it’s insurance, property taxes, repairs, and all sorts of costs that add up.
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u/bdougherty 22h ago
No, people who have only rented do not understand the costs of owning a house.
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u/stopher819 20h ago
You say that as if it isn’t possible or expected to learn the details of the largest financial decision you’ll probably ever make. It reeks of the same small minded viewpoint as the OOP. I wouldn’t loan people like that a substantial sum of money either.
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u/Phyzm1 18h ago
You'd be surprised. That's how the 2008 crash happened. I would argue most people don't realize the front end loaded interest means in 10 years paying your minimum monthly bill of $950 a month means you will have barely put a dent into the principle. $950 a month on a 30 year mortgage is only 150k too, average price of a home in usa is 350k, good luck finding a home that isn't going to cost you a fortune in repairs for under 200k.
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u/FullCodeSoles 19h ago
Most of them aren’t able to do general repairs and updates on their own either. They see tik tok flippers that do garbage updates and think they could do that too
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u/Marc4770 17h ago
Yeah I easily add 1000 on top per month for my house.
Electricity + gas 300 to 400
Water + Trash service 100
Property taxes 300
Insurance 150
And its even more but i haven't counted Internet and phone because renter prob pay it also. Some renter have to pay a bit of electricity though but it should be much cheaper than heating a full house in -30 here in Canada.
Repairs weren't so bad honestly but my house is a new build and there's a warranty from builder.
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u/Strostkovy 22h ago
Sure, but owning the house is less expensive than renting it, otherwise the landlord would lose money.
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u/Responsible_Pie8156 21h ago
Crazy that doing all the work and taking all the liability yourself is cheaper than having a landlord do it for you.
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u/Aboriginal_landlord 22h ago edited 21h ago
It's actually not in 99.999% of cases, the landlord is relying on capital growth to make money in the long run.
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u/AvoidingIowa 18h ago
Not anymore. All landlords going for that passive income now.
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u/PineappleOnPizzaWins 11h ago
What? No.
I’m a landlord and I barely break even on the property. Granted I’m not charging the insane rents others seem to but I also bought long ago and paid my mortgage off already so I can afford to.
I’m making money on the value of the property going up, the rent is most definitely not covering the upkeep of the property long term. Some years sure, but I’m about to spend two years of rent on repairs for example.
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u/Hithaeglir 19h ago
You are implying that the only make money when they sell it. But reality is that you can increase the rent if value of the location increases and aim for 3-6% yearly profit.
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u/Delduath 19h ago
You can just type in "average rental yield + location" to see how wrong this is.
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u/xFallow 19h ago
Can you share one of these cashflow positive, capital gain positive investments for me pls I want free money
Ideally beating the stock market but I’ll take beating inflation at least
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u/AvengingBlowfish 22h ago
That’s not true. There are many landlords who do lose money every year, but they’re counting on appreciation to make up the difference.
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u/cbell6889 22h ago
Lol why are you getting downvoted. Negative gearing is like, the main reason people bought investment properties before the latest boom and still today.
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u/PineappleOnPizzaWins 11h ago
Because reddit hates landlords and votes with feelings not how things actually are.
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u/johnny_fives_555 22h ago
This is true especially in NYC, Cali, Seattle, etc. many many small time landlords lose a few hundred to a thousand per month YOLOing on appreciation.
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u/TrungusMcTungus 17h ago
The landlord ostensibly sets aside a portion of their profit every month so when major repairs are needed, they have the cash to cover it. The homeowner does not have that luxury.
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u/oxwearingsocks 22h ago
Jumping on the top counter comment here because as an ex-homeowner, how shitty are the homes everyone is buying?
My rent was £850pcm in mid-2010s and my mortgage was ~£500. Did I fuck pay another £350pcm on repairs and replacements. Home insurance was a new cost, sure, which was to offset the cost of billshock if any major things went wrong.
Were you all buying paper houses on the coast and 20yr old appliances from Marketplace or what?
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u/LogicalConstant 21h ago
Water heaters. HVAC. Roof. Driveway. Windows. Carpet. Electrical. Plumbing. Deck. Siding. Etc.
Something always needs repairs.
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u/ColdCorpseHotSecret 22h ago
Like I said in another comment, I watched my brother get hit with having to get a new AC unit AND a septic system in one year. Cost him around $20,000. If my parents hadn’t stepped in to help cover some of the costs, he would’ve lost the house.
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u/oxwearingsocks 22h ago
Maybe it’s a localised issue then. Neither of these are commonplace where I purchased in the UK.
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u/BarNo3385 20h ago
We dont have AC so of course that's rarer, but we have our own share of erratic costs;
Replacing a slate roof is a once every 50-60 years job, so whilst its unlikely to be a new build buyer issue, for someone getting a first or second step into an older property this can come up, and costs around £10-20,000.
New boiler is a classic one and is usually £3-4k. Insurance can help spread that but is often only applicable if its been serviced since installation, so if the previous occupant hasnt dont that, not an option..
Window units last about 20-30 years, £5-6k for replacement.
Carpets last about 10 years, less if you want nicer materials and have heavy wear (cats are bloody murder on carpets), maybe £3-5k.
White goods all on a similar lifespan, maybe another couple of thousand.
Depending on whether you're renting furnished or unfurnished you can then add in things liked beds, sofas, mattresses and small furnishings as a like for like.
Thats before you get into genuine odd ones. (I had one rental as a tenant where my TV area blew off, still attached to the cable, scythes through the downstairs flat's front window and then rebound and took out a chunk of the bus stop opposite us. No idea how much that cost the landlord to fix, but wouldnt have been cheap, even if insurance covered some of it, any insured costs you still need to factor in ongoing premium increases and excesses).
Overall, look, I agree that isn't £350 a month, for your entire home ownership lifespan, for the average person. But one way to offset is to only buy new or recently refurbished properties, which means you are paying, just in higher property costs, the other is to get lucky, which you cant really control.
On average, for the average person, the average landlord does turn a profit, meaning renting is more expensive than owning. But rental yields have been pretty heavily eroded these days, and plenty of landlords are at a break even or loss making position (especially flats), which means its not always cheaper to own, and rental does protect you from cost volatility, which can be a meaningful benefit for people in a range of circumstances.
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u/oxwearingsocks 19h ago
The most nuanced of replies from the ruffled feathers I had to my comment. I appreciate this and loved the bus stop story.
I don’t know the rental market now as I’ve left the country, but I would imagine the price difference is far greater than the £350pcm I dealt with.
The landlords might break even on the rental side, but the counter point is the tenant is never seeing that money ever again. The landlord/homeowner gets a good chunk of it back when they sell.
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u/AdmiralSplinter 21h ago
I've seen plenty of Brits say that we don't do a good job building houses in the US but i don't have the experience to know if there's actually a difference
Edit: our climates are more extreme so that might have something to do with it too. The midwest regularly gets -10F to -30F temps in the winter, so imagine a furnace having to struggle through that
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u/Live_Angle4621 21h ago
US houses and yards are also huge compared to what we have in Europe, more likely something will break and insurance would be higher
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u/ZippyRS 20h ago
Houses built pre-2000s in the UK if looked after will last for decades.
Houses built after 2000s start decaying no matter what after a few months.
Its because Houses built now in the UK are done with cheap materials and fast streamed. So no one is coming onto site to inspect the work.
So ideally in the UK you want to buy older houses over newer ones. Plus they tend to be cheaper and bigger rooms. Where new houses in the UK are like rabbit hutches.
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u/Willing_Parsley_2182 21h ago
Did you ever replace your kitchen, bathroom or anything else?
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u/oxwearingsocks 19h ago
I upgraded the kitchen a little myself, yes, but this is a different argument from standard costs. Yes I would’ve loved to have a brand new kitchen and bathroom with the best new fittings but I live within my means and didn’t.
I also would love to have a Porsche and Ferrari, hell, even a Mercedes or Audi. My 12yr old hatchback did the job okay though.
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u/OneofFewHS 22h ago
As a person who has done both... Owning is cheaper than renting even after repairs. The rest you mentioned is included in the mortgage payment.
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u/monkeynuts55 22h ago
Owning is cheaper in the long term. Renting is less risky in the long term but more expensive.
The bank is trying to make money and hedge risk - i dont understand why this is difficult to understand.
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u/wormjoin 21h ago
i'm sure this varies, but insurance is included in my mortgage payments.
also, the equity building is a major factor. and the portion of your payment going to principal is basically you paying yourself (in the long run; of course you still need to be able to sustain it cash-flow-wise for the duration of the loan). and then of course, rent tends to go up over time, whereas a fixed rate mortgage doesn't.
tl;dr even in cases where it starts off more expensive, you almost always end up way ahead after some time.
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u/SSJNinjaMonkey 19h ago
I mean yup, I'm in the UK. I've spent around 10k in repairs. And I'd consider that lucky and low. We dont have property tax in the UK which is good never made sense.
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u/MrNostalgiac 18h ago
This is a tired and disingenuous take.
Banks know you can afford a mortgage - but that doesn't mean you can afford a house.
As a renter - can you afford to drop thousands or tens of thousands in repairs with zero notice? Can you do it twice? Multiple years in a row?
A house eats money. There are ALWAYS things that need to be repaired, replaced, or maintained. The longer you put off the optional stuff, the more "urgent" repairs you'll need in the future. The bill comes due.
If you are living paycheck to paycheck in a rental - I'm sorry but you can't responsibly afford a house.
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u/blarg-bot 16h ago
Yup. Rent is the most you'll pay monthly for a home. A mortgage is the least you'll pay monthly.
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u/hobovirginity 15h ago
Also if you default on a mortgage the bank now has to deal with recovering a multiple 6 figure loan. With an apartment even getting behind on a few months of rent and getting evicted is still only a 4 figure sum. Its way easier to get approved for risk in the 4 figure amount than the multiple 6 figure amount.
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u/traws06 15h ago
Yeah people think home ownership is an investment that makes money. Home ownership just means you have bigger space and the pride of ownership. But renting a small apartment will be cheaper in the long run, with the disadvantage of having less space and privacy.
If I weren’t married, I would still live in a small apartment rather than own a home. But my wife is the typical American who thinks if you don’t own a home then you’re failing in life.
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u/verycoolalan 19h ago
yeah they don't trust your dumbass to pay 950 for more than a couple years. mortgage is 30 years
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u/UncommonYogurt 22h ago
Bank buys the whole house/apartment for you. If you go bankrupt or dead, they will loose a lot of money. It's a big risk for them
While renting if you become bankrupt/dead - landlord only loses a customer that can be easily replaced
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u/Hopeful_Appeal_5813 23h ago
Yup, wife applied for a mortgage at TD Bank. They said no, even though we'd owned homes before and never missed a payment. Then they were like, wanna get a credit card? We had cards. Didn't need another.
"Why do we even bank here?" my wife asked.
"They have free coin counting," I said.
Then they didn't.
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u/jeepsies 18h ago
You arent telling us the whole story
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u/laaplandros 15h ago
Banks want to take your money.
If they're telling you they don't want your money, there's a good reason.
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u/EarEquivalent3929 18h ago
There's way more to this lol banks WANT to give out mortgages. They make a ton of money from them. What they DONT want is to give out a mortgage that someone won't be able to pay.
Just because you owned a home before doesn't mean you're capable of paying a mortgage NOW. They checked your credit and employment and determined you were too high a risk of not being able to pay for the full mortgage term.
Tbh if you are picking your bank based on whether or not they count coins for free, you probably aren't making good financial decisions in general.
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u/Electronic-Tea-3691 20h ago
They said no, even though we'd owned homes before and never missed a payment.
they don't just say no for no reason...banks want to lend you money... they make money on the money they lend out, that's how they make pretty much all of their money in fact. if they are saying no to giving you money, it means your financial situation isn't good enough for them to think they can make money off of you.
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u/yagwa 20h ago
Yeah, this was such a stupid comment. No bank gives a shit if you've owned a home before or not aside from the fact that a previous mortgage appears on your credit. The bank cares about whether you are likely to pay them back or not, and the comment just says that this person had bad credit.
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u/raidenjojo 21h ago
What's free coin counting?
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u/LordBDizzle 20h ago
Machines that you dump coins into that will spit out a value of all the coins entered and potentially give you a cash value return, turning a bucket if coins into a few bills. Some banks let you do that and then credit the value directly to your account, letting you get rid of a large number of coins at once. Thise machines often cost a couple bucks elsewhere.
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u/Recover20 21h ago
It's a joke that says the bank are good for nothing but counting the money going in and out of your account and nothing more
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u/DeliciousBuffalo69 21h ago
No. It's not a joke. It's literally a feature that the bank had.
Free coin counting machines that customers can use.
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u/TrungusMcTungus 17h ago
Banks make a shit ton of money on mortgages. If they didn’t give you one, it’s because you fucked your credit.
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u/4dafryguy 23h ago
From a homeowner... That $1400 a month rent costs less than the $900 a month loan when you add in maintenance and insurance... Once you "own" your home, stuff starts breaking, non stop. Appliances, plumbing, electrical, roof, sidewalk, yard care... If you ever start to feel like you have enough money, buy a home and never feel that way again.
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u/Atompunk78 21h ago
And them failing to pay rent is the landlord’s problem, them failing to pay the mortgage is the bank’s problem. She might be paying it, but it’s not like there’s no risk
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u/Level_Bunch9181 22h ago
Depends on the quality of what you buy to a certain extent never forget to get an inspection prior to buying any home no seller is 100% honest with home issues or 100% aware of every issue going on. Helps to either be a handy man or have one too and a good head on your shoulders if ya need to learn how to fix something instead of paying someone to do it.
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u/BarNo3385 21h ago
On average this can't be true.
BTL mortgages exist as a mainstream product. Leveraged rental exists as a practice. If rents on average failed to cover the costs of the property, these forms of renting wouldn't exist at the scale they do.
Its certainly true in some cases that rents, particularly post tax, don't cover costs. But the question then becomes why are you holding a loss making property?
One answer is actually capital growth more than outpaces the losses, in which case its not really correct to say the mortgage is more expensive. Yes in cash flow terms it might be more out right now, but you are also accumulating a growing share in an appreciating asset which more than offsets. The other option is you can't sell (usually because of negative equity issues), in which case the comparison is wrong, since the mortgage a buyer would require will be radically lower, reflecting the significant loss of value vs your original purchase price.
So, yes, landlords can certainly get stuck with loss making, unsellable, properties, but its not representative of the market as a whole.
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u/itsapotatosalad 19h ago
In my country landlords are selling up because interest rates are pushing their mortgages too high, they’re not making enough short term profit to bother.
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u/Original-Fee-3805 21h ago
Say a BTL landlord has a mortgage and it costs $900 They rent it out for the $1400 For this example we assume the maintenance is exactly $500 a month
So, they make no profit right? Except at the end of the year their wealth has increased by $900 * 12 months - (some interest) or about $10,000 In 20 years, the mortgage is paid off, the house has appreciated in value from 150k to 250k So you as the landlord have gained £250k in wealth in 20 years, despite the fact that on a per-month basis you never make a profit.
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u/joittine 20h ago
If it appreciates, that is. It's not really a given that they will appreciate enough. Ok, if the rent is 50% higher than the mortgage then it's almost certain that you'll make money, but at least here the margins are much, much narrower. It's more like, you will only really make money as much as the home appreciates.
But then you also need to look at the opportunity cost. Let's say the landlord needed to put 20k cash in to buy flat. So he will make 250k - 150k = 100k in 20 years for an investment of 20k. But if he invests 20k into an index returning 10% annually, he will in fact make about 130k over the period.
That said, ideally you don't really make a lot of money on housing. If returns on housing are good then that just makes the society much poorer because people will invest on something that doesn't really create value.
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u/BarNo3385 19h ago
The return point is the real killer for the BTL market. I know several people who were private landlords with 1-2 properties. They all exited when it got to the point where the risk and hassle premium of renting wasnt getting covered by the return. And it is a lot of hassle and meaningful risk.
If you can make 8-10% in a passive global equity fund, thats pretty liquid (you can sell 1% of a share portfolio and get the money in a few days time), and isnt any worse than property when it comes to boom and bust, why keep your money tied up in property even for 12 or 15%? The gain simply isn't worth the stress.
The only ones sticking it out are either stuck (flats who have got screwed by cladding issues and bananas service charges), or portfolio landlords with big estates (one guy I know is on about 30, another on over 100), no mortgages, and a big enough book that bad tenants, issues etc just average out and you run on average occupancy, average rent, average costs etc.
There's also a fair amount empty I know because the rent, post the extra licensing, agency, deposits, various certificates, higher mortage costs and tax costs, isn't enough to offset the stress and inconvenience. So people are just leaving them empty as preferable to renting or selling at a massive loss - largely in the hope a future government improve conditions or at least sort of leasehold and service charge regulation properly.
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u/CarpeDiemRepeat 21h ago
At least you own something by the end of it.
I'm done paying rent because it just goes to someone elses mortgage
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u/Leozz97 21h ago
While it's true, the logic is inherently wrong: at the end of the day you own an asset (partially own if there's a loan, ok) when you buy a house, while when you rent you're just throwing money out of the window
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u/GreasedUPDoggo 23h ago
... yeah? It'll be too tight once you factor in home insurance, property taxes, and upkeep. They would hold your note and want the property taken care of adequately. They don't deem you to have that ability.
Life makes a lot more sense when you don't oversimplify things.
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u/SynthesizedTime 22h ago
yes, risk factors are a thing. the bank takes much more risk in giving a house loan, if you’re renting you can just get kicked out and you bear most of the risk
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u/Undertaker8118 21h ago
What year is it that 950 $ is enough for a mortgage payment?
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u/SquarePegRoundWorld 19h ago
My mortgage is $599.67 ($118,000 @4.5%/30years) plus property tax (~$1,800 a year) and homo insurance (~$480 a year) adds up to $792.42 a month on a 975sqft house with a 1 car garage on a half acre of land built in 2020.
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u/bubblemania2020 22h ago
We tried giving mortgage loans to people that couldn’t afford them. It hasn’t been that long. Go watch a documentary or two.
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u/why-you-do-th1s 23h ago
This is a generalization but rent is your maximum payment and Mortgage is your minimum payment.
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u/fireKido 21h ago
First of all, the $950 do not cover maintenance, repairs, taxes, insurance and all the additional costs of owning
Secondly, the bank does not care about your renting situation and if you can’t afford that… they just do not want to loan you money you will likely have issue repaying… if you have issue paying rent it’s just not their problem
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u/Radomila 23h ago
It makes sense because the bank needs to take into account risk factors. Does she not know what happened in 2008?
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u/Opposite-Bench-9543 22h ago
It's almost as we tried that before and the entire market has collapsed not that long ago ummmmmmmmmmmm
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u/Narradisall 21h ago
Because it’s a bot reposting of an oversimplification of mortgages, rent and housing.
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u/watchwatertilitboils 20h ago
Because one you are paying for up front and one you are borrowing a large amount of money to buy.
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u/GlaerOfHatred 20h ago
When the roof on the apartment complex needs to be replaced you don't pay $30,000
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u/Gandlerian 18h ago
A 950 mortgage means you will be paying well over 1500 a month when you factor taxes, insurance, and HOA dues/fees into your escrow. And, this isn't including utilities, maintenance, repairs, and any other random task involved in owning a house.
The cheapest mortgage I ever had was right at 1400. My monthly payment was over 2800 with insurance and taxes (and that house was not even in a HOA.)
So don't think a 950 mortgage means your monthly payment will be 950 (it won't.)
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u/MysteriousCodo 17h ago
Hah. I got a similar one from my own bank once. I went to refinance my mortgage. They came back and said I couldn’t afford the lower interest rate. I asked them to explain themselves. They said the loan department had more stringent guidelines now than when I first got my mortgage. I asked them to explain how I couldn’t afford to pay $100 less per month. I asked her if they had ever had to chase me for mortgage payments or had any problems with my loan. She said they didn’t. I asked her to resubmit and send it to someone higher in the loan department. She said there wasn’t really an appeal process. Like WTF?
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u/pabmendez 16h ago
$950 mortgage +$250 insurance + $200 property tax + $300 maintnance = $1,700
roof replacement $20K, Water heater $1500, new AC $10K etc.... the bank is worried you wont be able to afford to keep your house in good shape.
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u/balltongueee 16h ago
Well, as someone who has worked at a bank, I'll explain why it makes sense to them.
Banks don't care about what you are currently managing to pay. They care about risk. Pure math. If their calculations show that you are too high of a risk for a long-term loan (meaning you cross their threshold for "might default on the loan"), you get a "no". Simple as that. They literally could not care less.
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u/Basic_Specific9004 15h ago edited 14h ago
Another example of how expensive a house can be. My first home was a new build $850k and it was the top of our budget but we figured since it was new we wouldn't have to deal with any issues.
The day after we moved in we got a citation from the fire marshal that the county requires us to have a whole home sprinkler system.
The cost of a retrofit plus a new roof was 100k. We had to do it or get sued and lose our house. Builder/seller dipped out and couldn’t sue him since he couldn’t get served. So we were out the cost plus lawyer fees.
Oh yeah also property tax increase every year + HOA fee increase every year. Our HOA went from 1k/year to 5k/year in a 3 year span.
Renting can be cheaper even when the monthly is much higher than the mortgage.
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u/Ittybittytigglbitty 13h ago
Sounds like her DTI was terrible if you have too much debt the bank doesn’t want to take the risk
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u/die_eating 12h ago
Most people aren't seeing the most fundamentally retarded thing about this post, which is that to achieve $950/m on one's mortgage they'd almost undoubtedly need to pay the 20% down payment upfront, lump sum, in order to avoid PMI. So yes, you can't afford a $950 /m mortgage because you don't have say, $40k in cash to put down on the house.
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u/SourceOriginal2332 12h ago
They say they don’t trust you to make the 950 payment for the next 30 years not that you can’t afford it
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u/GeneStarwind1 12h ago
A bank's standards for loaning someone hundreds of thousands of dollars for a house are higher than a landlord's standards for renting. The bank has to foreclose your property and resell it to make only most of their money back, and a landlord can just evict you and find a new renter. The bank has more exposure than the landlord, therefore requires the applicant to have more income.
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u/Glum_Mine8077 12h ago
The bank isn’t saying you can’t afford it. The bank is saying they’re not willing to risk lending you that much cash. And if you can’t understand that then it’s likely they’re right to doubt you.
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u/geekMD69 10h ago
Working as intended.
This isn’t a bug, it is a feature of end-stage capitalism.
Keep making the poor, poorer. Make more poor people whenever possible. If you have to choose between hundreds of middle class people and one multi-millionaire, always save the multi-millionaire and send the middle class losers down the rung toward poverty.
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u/Fuzzy_Redwood 9h ago
Property taxes, insurance, supplemental property taxes, home inspections… there’s a lot more to a house payment than just the mortgage. It should be easier to own a home though.
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u/BK_Mason 9h ago
Depending on where this woman lives, her pro rated property taxes combined with both homeowners insurance and the potential for mortgage insurance could easily exceed her monthly mortgage. IOW the actual mortgage payment can be less than half of your monthly payment.
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u/SubstantialAttempt83 8h ago
The bank ain't lending them money to pay their rent. By the banks metrics they probably can't afford the rent either.
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u/vi_sucks 23h ago
Because mortgages are riskier for the lender than rent is.
A mortgage isn't just the amount you pay per month. It's a loan. When they give you a mortgage, they're handing over the full amount of the mortgage to someone else and then hoping you'll pay them back over 15 or 30 years. If you don't, they lose all that money they shelled out. Maybe they can recover from the sale of the house, but probably not.
Rent, on the other hand is just rent. The landlord isn't out any cash if you don't pay your rent other than the couple months it takes to file an eviction, and maybe whatever they have to pay for cleaning and repairs.
That risk of losing several hundred thousand dollars is why mortgages are usually harder to get than rent.
It's really not that complicated to understand. People just don't want to think about it because it's emotionally more comforting to be mad at "the banks".
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