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The Rise of Renting in the U.S

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Re: The Rise of Renting in the U.S

#141

Post by rm_-rf_slash »

To anyone who noticed one of the cities with high rates of homeownership, that can work remote, withstand rough winters, and accept that their football team will never win the Super Bowl, MOVE TO BUFFALO!

Buffalo used to be a very wealthy city. It was the first American city with widespread electricity (thanks, Niagara Falls!), and because it's had some hard times, you can literally buy a mansion at (relatively) bargain prices and rent it out to half a dozen people, and you still get to keep the master bed and bath for yourself.

And there's the added bonus of living in a proud, blue collar city, where people care about who you are, and not what you're paid.

Re: The Rise of Renting in the U.S

#142

Post by JackFr »

turar wrote: post #83
irishcoffee wrote: post #57

Earlier quoted context omitted.

I read this counter-point a lot. Its never clear to me how you invest the mortgage payment and also pay rent to live somewhere. Am I missing something? Sincere question.

I'm not sure I understand why you would pay rent to live somewhere else. I'm talking about living in the house that you bought and have a mortgage on. Say your mortgage loan amount is $300K at 3.5%, locked in for 30 years. Instead of paying it off in 6-10 years with extra payments, I say invest those extra payments in the stock market, and keep paying the mortgage for 30 years at a locked rate of 3.5%. If that money…

> On top of that, it also depends where you think the interests rates will be in 10-20 years from now. If you believe that they will be higher than they are currently, then that's even more reason to keep that loan locked in for 30 years instead of paying it off sooner.

That makes no sense. You'll be better off paying a lower interest rate than you would be not having a loan in a high rate environment?

Re: The Rise of Renting in the U.S

#143

Post by paganel »

Finnucane wrote: post #49
brianwawok wrote: post #15

Earlier quoted context omitted.

Not having your rent increase or being told to move, as are being able to make your home exactly what you need. My home has a 15x15' home gym with all kinds of upgrades I like.. finding a ready made house with my exact ideal gym? Low odds....

We bought a house in a 'tech hub' (Cambridge) during the crash--it was a little scary at the time, but worked out well for us. Our current costs are about half the going rents in the area. Prices have gone up so much in the last few years we probably couldn't afford our neighborhood now. But deciding to buy or rent (assuming you have a reasonable choice) often involves a lot of personal factors beyond the purely fina…

You also have to factor in a possible divorce, as in you have to ask yourself "what happens with the house/mortgage payments if we split up in 10 years?". Truth be told there are a lot of variables that we decide to just gloss over when taking decisions which will affect us financially for the next 2+ decades. Not sure why this happens, we're otherwise pretty rational creatures.

Re: The Rise of Renting in the U.S

#144

Post by toomuchtodo »

wavefunction wrote: post #137
cylinder wrote: post #128

Earlier quoted context omitted.

Well you got a remote job, so you did a little locational arbitrage. Most people leave the small towns because of lack of opportunity. The cost of living is low because incomes are low. Can someone come up with a model that's sustainable and applicable to the majority of people?

@toomuchtodo >>applicable to the majority of people? >Have job that pays median US wage or above. This requirement and solution are a mis-match.

Updated to: "Make more than you spend and save combined"

Re: The Rise of Renting in the U.S

#145

Post by Outdoorsman »

derekp7 wrote: post #21
rayiner wrote: post #6

I don't think I'd have any interest in every buying a house if it weren't for the insane tax deductions for mortgage interest. Why be stuck in one house when your living situation changes over time (new kids, kids get bigger, kids move away, job changes).

That tax deduction does get smaller every year (as the interest/principal balance changes). The biggest issue I found with owning is that the equity doesn't build up fast enough at the beginning (with a 30-year mortgage), so if you sell after 10 years the costs pile up to the point that you have almost no net proceeds (5% commission, survey/title/transfer tax/inspections, plus prorated property taxes). A 200K propert…

One strategy that's been around for years to save a substantial amount of money on a 30-year mortgage is to make 13 payments a year (vs the traditional 12), or the equivalent...

More info and examples here: (and elsewhere)

http://www.interest.com/refinance/news/3-free-ways-to-pay-yo...

Re: The Rise of Renting in the U.S

#146

Post by eldavido »

alexchantavy wrote: post #53
kilbuz wrote: post #24

The statistic that went most against my intuition is that San Francisco has the one of the lowest 'rent burdens' in the US. That is, rent as a percentage of income is on the low end and equivalent with many Midwestern cities. I'm guessing that the typical SF renter paying 25% of income on rent may be dealing with a lot less space (and more roommates) compared to someone in Pittsburgh or Minneapolis.

The lower burden might also be because SF incomes are a lot higher than in the Midwest.

This is true, but I wonder why. Are SF employees simply that much more productive than elsewhere? (Serious question, it might be that for certain types of work, you really do need the talent base here, but a company is certainly paying a premium for it these days.)

Re: The Rise of Renting in the U.S

#147

Post by bradleyjg »

maxerickson wrote: post #44
pc86 wrote: post #29

Earlier quoted context omitted.

Actually the best thing to do is just to have a lot of money. Problem solved! Your scenario assumes a location (or person) with: - Desirable housing in the $60-100K+ range - Employment sufficient to generate high paying positions - The will to sock away a large part of your income for close to a decade, just to have a paid-off home (which is not a big enough benefits to be a means unto its own) 20% down at a minimum…

This makes me wonder if 30 year mortgages even end up making housing more affordable. (I guess it would be a prisoners dilemma situation, where individuals benefit by taking them out but the overall situation is made worse)

>> This makes me wonder if 30 year mortgages even end up making housing more affordable.

Everything the government does to subsidize home-ownership ends up getting capitalized into home prices and so acts as a naked giveaway to incumbent homeowners and either does nothing for or actively hurts non-incumbents. Interventions breed more interventions as the prior ones no longer provide the above general inflation price growth that homeowners demand from their politicians. The 30 year low fixed rate mortgage with no prepayment penalty is just one among many such interventions.

Re: The Rise of Renting in the U.S

#148

Post by mpg33 »

lowglow wrote: post #64

I've sorta turned my back on the standard american dream. Racing to new areas of growth, working to build someone else's dream, getting paid well immediately for performance, paying high rent, etc to afford the image of success, and making friends that participate in this same high ambition culture. Instead of making markets, markets start making you. All the rules, and "norms" we've collected around ourselves to par…

Most millennials will end in the same boat.

Re: The Rise of Renting in the U.S

#149

Post by hueving »

d4rkph1b3r wrote: post #133

> In broad strokes, this makes them good for the poor and bad for the rich The stupidity in this comment hurts my soul. Let me ask you this, out of the poor and the rich, which one is more heavily leveraged into assets (using debt).

Poor, because poor people are the only ones to be entirely in debt. Also everyone with a good income that has huge student loans.

I think you've become very disconnected from what the lower middle class is like if you think high interest will help them. The average savings account in the US is well under 10k.

Re: The Rise of Renting in the U.S

#150

Post by Vraxx »

Avshalom wrote: post #67
jdmichal wrote: post #62

Earlier quoted context omitted.

Where I live, if the landlord doesn't fix the problem within a reasonable amount of time, you can fix it yourself and deduct the repairs from your rent payment. You should educate yourself on your local laws surrounding rentals if you haven't already; there are likely similar terms where you live.

and then what lose more money taking time off work to go to court when the landlord tries to evict you for not paying rent in full?

They won't try to evict you assuming you're abiding by your local renting laws, because I'd bet they've read them as well considering it's part of their job. A lot of landlords will take advantage of the fact that tenants often are not aware of these rules to get away with not abiding by them, but if you demonstrate that you know the laws they aren't going to mess around when you can sue them in small claims court and win handily. Not to mention, oftentimes if you do suffer some opportunity cost as a result of their actions, that cost can be included in the damages.
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