December can be slightly depressing if you are one of those people, like us, who don’t escrow their property taxes. That means that our monthly mortgage total is always identical but we have to pay our own property tax bills each year. Escrowing means having the mortgage lender estimate the annual taxes, include that in the monthly payments due, and then change the monthly payment the following year based on whether they over or under estimated previously.
I don’t like inconsistency, so we chose to NOT escrow. But I pay for that aspect of control by having to watch GOBS and GOBS of money disappear every December.
Granted, we set aside the money throughout the year for exactly this purpose. It’s not a shocking surprise. But it still hurt to transfer out $12,250 this year just to pay our home’s HOA dues ($719) and property taxes on two houses in an expensive (aka, nice) school district. Yep, our net worth just took a $12,250 smack to the face.
I always feel broke right around the day I hand over that hefty, annual chunk of change.
Property Taxes Keep Rising
And that payment number is growing thanks to home values ($148k for our rental home and $308k for our home…jointly $81,000 more than what they were worth when we bought them), so I’m sort of crossing my fingers for a property value crash sometime soon. Everything in our area around Houston seems overpriced right now anyway.
And keep in mind, our homes would be taxed at an even higher value if I didn’t bother to protest our appraised property values every time they send me a letter saying they jumped up some crazy-ass amount. Totally worth protesting for me since it always keeps the value at least reasonable.
I also want to beg my neighbors to protest as well since every time they don’t, it’s harder for me to show that the appraisal numbers are actually bonkers. If it helps, here’s how I protested before…it’s not as time consuming as it seems.
Our Personal Renting vs. Buying View
Okay, I’m done with my complaint-fest. We love our home and our rental home. We really like the area we live in too. So all in all, this is just one of those costs-of-living that we consciously chose and continue to see as worth it to us.
Do I ever wish we rented sometimes and this would be someone else’s problem? Totally. But we truly do appreciate knowing that our rental home is 100% ours and that our current home should be by the time we hit age 50 (hopefully sooner, though having this baby will most likely shift my money priorities for a while).
The extra costs associated with home ownership in our area are usually passed down to renters anyway – we paid $730 a month in rent for a 1000 square foot apartment (and that rent was going to jump up every year) but our first mortgage was $740 a month for a 1750 square foot house plus less than $3000 a year for property taxes.
So at least in the suburbs of Houston, Texas, it makes financial sense to buy if you have good credit unless you plan on moving soon. I don’t think the math would have been in our favor in more expensive parts of the country since we can live in small spaces with roommates if needed.
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!