Why has Tom Reilly and his wife been renters for over 35 years? In an article about Ruth Reilly, it was mentioned that they have lived in an apartment in Watertown for over 35 years. As a previous renter, now homeowner, I thought it made financial sense to purchase your home? Can someone out there tell me differently? (And don’t tell me they probably could not raise the down-payment. I think on a lawyer’s and teacher’s salary they could have easily saved a down payment.) I have nothing against renters, having been one myself for many years, but I just don’t get why you would choose that route. It just does not make financial sense.
Please share widely!
political-inaction says
The price one pays for a good story.
maverickdem says
The Reillys chose to live in an apartment for 35 years so that, just in case Tom Reilly ran for Governor, they would have the opportunity to claim a humble abode. I’m sure that was it.
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Of course, they could have chosen to build a mansion in the Berkshires and saddle themselves with nearly $6 million in mortgage debt. That would have been the financially prudent decision, don’t you think? Mortgage, mortgage, mortgage! Of course, that’s the Patricks’ money. I’m sure that Deval won’t be as free-wheeling with other people’s money.
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gary says
Pretty soon you’ll believe you can spend your money better than the government.
maverickdem says
And I can say that as a Democrat without going libertarian!
political-inaction says
MaverickDem,
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I will freely admit I am not an economist or a financial planner. However, everything I read talks about how the better way to save money is to purchase rather than rent. Build equity, save for future, etc.
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I’m not going to purchase a manse any time soon, but when I had the opportunity to save money by buying a home I did. That was a good investment. If Tom Reilly can’t figure out, after approximately sixteen bazillion articles, that purchasing a home is a better investment than renting I don’t think that says much for his ability to manage my tax dollars, do you?
centralmassdad says
or is not good at simple finance.
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Good qualities for a governor, no?
gary says
Candidate with large mortgage, and therefore doesn’t like to pay taxes, and is, by reason of excessive debt also not good at simple finance?
centralmassdad says
Candidate with large mortgage borrowed at a low interest rate and used the capital that would otherwise have been sunk into real estate to invest in defense contractors and tobacco companies, and got a good tax deduction. So that guy knows how to extract maximum value from the resources available resources.
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Also, that guy doesn’e need permission to paint get his living room a new coat of paint.
gary says
But, no more so than my post.
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Too bad we’ll not see his tax returns to know which of us is more correct. But, to press my point a bit, could you see yourself committing to debt service plus real estate taxes that might well exceed 40-45% of your gross income?
centralmassdad says
in this thread.
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As far as the Deval debt issue is concerned, I don’t see that much of an issue. At their income level,. of course they can carry a greater debt to income ratio that you or I can. That is because they can still live a pretty comfortable life (they pay the same price you do for gasoline and milk, and probably don’t consume more than you) on what is left after the debt service.
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They are leveraged. They own the real estate, so build equity as it appreciates. The capital freed by the debt can be invested elsewhere. As long as the interest rate is favorable– which, after the last few years, it almost certainly is– this is a pretty good strategy. If the rate floats too high, they reallocate capital by liquidating other investments to pay down the mortgage. Pretty simple stuff.
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I guess the point was that I would wonder why anyone with the ability to own their home would choose to rent. This makes aboslutely no financial sense whatsoever. Not only is it a decision to give the government huge amounts of extra money in taxes, it is a choice to pay someone else’s mortgage (via rent) so they can get the benefit of the appreciation of the property. In short, it is dumb.
gary says
Residences are great. The government subsidizes folks who can afford them with interest and real estate tax deductions. Liberals should hate it: the tax subsidy for the rich! Then, to top it off, banks lend you 80% or more to buy the investment.
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That said, (devil’s advocate time), if you bought in New England, in the mid 1980s, your investment was underwater for nearly 15 years. If you bought in 2005, you may have bought at the height of the housing market. Meanwhile, rents have been amazingly stable for the past decade in New England.
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Add to that, if you rent, you don’t have to mow the lawn; fix the plumbing; replace the roof, etc. It’s a lifestyle choice, IMHO, a quirky one for sure, but not necessarily a financial blunder.
centralmassdad says
Pretty sure it was a sizable blunder. Yes, rents have been stable in Watertown, but that close to the city, property values have doubled and redoubled over the last decade and a half. I know this because I regret biuying in time to take advantage of the first doubling. If he had bought at the 80s lows, he would be hundreds of thousands of dollars to the good, and that’s not even considering the tax benefit.
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That’s like paying your landlord $30K a year to mow the lawn, or getting e new roof twice a year. Heck, he could have hired a lawn service and paid them a living wage, and still come out far, far ahead.
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As far of the taxes, it is every American’s duty to pay only those taxes to which they are obligated to pay. Voluntarily forking tens of thousands of dollars to Uncle Sam is just dumb. If done because of some notion that a true liberal shouldn’t take advantage of this tax break for the middle class, then it betrays absurd naivete. If done to generate a throwaway “just a lunchbox guy” moment in a losing campaign, that was one expensive story.
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Sure, he has every right to spend his money however he wants. Doesn’t make it smart, though.
gary says
centralmassdad says
Or a cheif executive.
maverickdem says
You know, next to the one where Chris Gabrieli apparently home schools his kids about the benefits of after school programming, telling them the hard truths about extra homework, before taking out the trash at Mrs. Gabrieli’s urging – just like the commercial. Until then, they will grin and bear it in a middle-class neighborhood and send their kids to a solid public school system.
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Imagine the audacity of exercising their right to live in a community and manner of their own choosing! And they honestly expect us to believe that they are happy living their life this way? No way!
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Sure, they own a modest home in Chatham that they inherited from Ruth Reilly’s family. Sure, many people own a home and rent on the Cape, but instead the Reillys do it in reverse. They honestly can’t expect us to broaden our minds in a way to contemplate such a radical concept, can they? That’s just craziness.
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I say they should either mortgage themselves to the hilt in the spirit of the Patricks or buy a second home to satisfy the rest of us, their happiness be damned! We’ll let them know when they are truly happy.
maverickdem says
You know, next to the one where Chris Gabrieli apparently home schools his kids about the benefits of after school programming, telling them the hard truths about extra homework, before taking out the trash at Mrs. Gabrieli’s urging – just like the commercial. Until then, they will grin and bear it in a middle-class neighborhood and send their kids to a solid public school system.
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Imagine the audacity of exercising their right to live in a community and manner of their own choosing! And they honestly expect us to believe that they are happy living their life this way? No way!
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Sure, they own a modest home in Chatham that they inherited from Ruth Reilly’s family. Sure, many people own a home and rent on the Cape, but instead the Reillys do it in reverse. They honestly can’t expect us to broaden our minds in a way to contemplate such a radical concept, can they? That’s just craziness.
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I say they should either mortgage themselves to the hilt in the spirit of the Patricks or buy a second home to satisfy the rest of us, their happiness be damned! We’ll let them know when they are truly happy.
maverickdem says
Sorry about the double-post. I would delete the second if I could.
cos says
I don’t know Tom Reilly and have no idea why he decided as he did, but the simplest guess is the obvious one: Moving sucks. If you like where you live, and have no problems with it, and forsee reasonable finances leading to retirement, you just stay. Maybe you have other things to worry about than the hassle of buying a house and moving into it and then having to fix & maintain it.
eury13 says