The Rise of Renting in the U.S • Hacker News Board

Re: The Rise of Renting in the U.S

#201

Post by JackFr » Wed, Feb 17, 2016, 11:31 PM UTC

ryandrake wrote: post #187

turar wrote: post #156

Earlier quoted context omitted.

Remember, the loan is locked in. Everything around you may be a high rate environment, but your loan is still 3.5% when regular bank savings account would be paying, say 7%. So, if you bought shares of an Emerging Markets ETF [1] with the money that you would have otherwise paid for accelerated mortgage payments. Today these shares are paying you around 3.5% in dividends alone. Fast forward ten years to a high rate e…

You need to discount your calculations because your ETF is not risk free.

In fairness the value of your home is not constant or risk free either.

Re: The Rise of Renting in the U.S

#202

Post by ArkyBeagle » Wed, Feb 17, 2016, 11:31 PM UTC

drawkbox wrote: post #34

The American Dream is looking more like a middle level marketing organization with false advertising for most. The problem is we just keep stripping away the middle class and lower class consumer power[1][2] and the solution is getting wages up to fix these issues. People wonder what happens in a consumer driven economy after stagnant wages since 2001, well this. It leads to Great Recessions, a sideways investment ma…

It's been more correctly Bained. See what happened to Guitar Center for details.

Enron was a real company doing real work. Bain, not so much. Sure, the traders at Enron were completely out of control and the management team was out to lunch, but please remember that MCI was even part of Enron.

But YEP! drained of cash and loaded up with debt. The small details don't really matter than much.

Re: The Rise of Renting in the U.S

#203

Post by taurath » Wed, Feb 17, 2016, 11:33 PM UTC

roymurdock wrote: post #185

taurath wrote: post #162

Earlier quoted context omitted.

This is a big generational thing. My brother and I have been there as our parents moved us out to the country to buy a big house, my dad work his life away for a bigco only to be laid off 3 years before his retirement, and now they sit in their house with a lot of stuff and very few hobbies and not much of a social group. We've seen how far striving can take you, and the real cost of the sacrifices you make for posse…

Well, they earned the financial stability to raise you and your brother and put you through school, which I'm they wouldn't consider a waste. It's a competitive world we live in, and I often feel like I'm wasting every minute that I'm not actively working towards learning something new/planning my next cool experience/my next job opportunity. I wonder when I'll have the time to settle down and raise a family. Hopeful…

They put my brother through a bit of school - I left home at 18 on unamicable terms over my sexual orientation. Its a competitive world but spending every waking minute of your time on things that will give you resources will not give you the skillset needed to enjoy the resources you get. If you're trying to climb the socioeconomic ladder make sure you ask yourself whether its really worth it.

Re: The Rise of Renting in the U.S

#204

Post by ahh » Wed, Feb 17, 2016, 11:34 PM UTC

toomuchtodo wrote: post #197

ahh wrote: post #195

Earlier quoted context omitted.

This works once you have a (supportive) partner. It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever. So I'm in a major metropolitan center, burning cash at a way higher rate, so I can hopefully find a wife. If I'm very, very lucky, that wife will want to move with me to rural Colorado. Sadly, this insane plan is abo…

Have you tried online dating? I know that sounds silly, but it might help optimize your search for a partner who shares your interests. > It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever. I live 15 minutes from the beach in the Tampa area. Low cost of living area.

Online dating still requires you to be in a location with an extremely large population of single women. It doesn't matter if you visit the one bar or OKCupid if you've already asked out and been rejected by the only three eligible people in your zip code. You need a large enough population to successfully find a match, and the only place to find large populations of single women are major cities. (And a tiny fraction of cities at that--I chose poorly here and very much regret it.)

Basically, when it comes to dating it doesn't matter if you live in Issaquah (15 miles from Seattle) or Othello (180 miles from Seattle.) In neither case would anyone who lives in Seattle be bothered to go out on a date with you.

Re: The Rise of Renting in the U.S

#205

Post by thedufer » Wed, Feb 17, 2016, 11:35 PM UTC

toomuchtodo wrote: post #144

wavefunction wrote: post #137

Earlier quoted context omitted.

@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"

What does that mean? Where does the extra money go? Under normal definitions, income = spend + save. That's not an equation to be optimized; it's a tautology.

Re: The Rise of Renting in the U.S

#206

Post by mclovinit » Wed, Feb 17, 2016, 11:36 PM UTC

toomuchtodo wrote: post #95

seivan wrote: post #89

Earlier quoted context omitted.

How does it work with having a companion. It might be easier to find someone with the same outlook. But if you're already in a relationship it's going to be an uphill battle.

I might be able to answer that. My wife and I are early 30s. I spent my 20s in the rat race, working 60-80 hour weeks for material possesions (nice vehicle, luxury townhouse, etc). At some point, I got tired of it and said, "Can we try something different?" I switched to a fully remote job. We disposed of the townhouse (no equity in it). We downsized our lives (1 car! I ride a bicycle everywhere! You would not imagin…

It's good to see you have a teammate going forward. I may try something similar if my spouse is in agreement. Sailing definitely requires a solid partner. It's hard work. My spouse and I (in our 40s) live in a fairly old and small single family home well below our means. Our neighbors are retired and spend a lot of time on their boat sailing up and down the coast. They have definitely been through some stormy weather through the years (pun intended), but that's what it takes. You won't know the shipmate ya have 'til ya "capsize" arrghhh :)

Sometimes they are gone for months at a time. One of them picks up work related to sailing when not sailing and is quite handy in fixing anything from sails to refurbishing old boats. When they are not sailing they come back to their home which has been paid off for many years. I suppose paying real estate tax is always there, but the benefit is that they have a good community to come home to. Plus it gives me a chance to partake in conversation and share a pint or three in front of a warm fire ;)

Re: The Rise of Renting in the U.S

#207

Post by hkmurakami » Wed, Feb 17, 2016, 11:42 PM UTC

awakeasleep wrote: post #154

kazinator wrote: post #110

This article is full of "no kidding" like, oh: > In fact, metros with greater shares of renters have higher wages, higher productivity (measured as economic output per capita), and greater concentrations of high-tech firms, according to Mellander’s basic correlation analysis. People are attracted to where the jobs are, and so everything gets bought up and inflated, and the late comers have to rent. In related news, y…

Property taxes should basically kill the dream of "and don't pay a fucking thing to anyone" for anyone that lives in the US. Especially city dwellers. I was surprised to see tax for properties I could technically afford cost more per year than I had been paying in rent.

fwiw you do get to deduct property taxes from your taxable income.

Re: The Rise of Renting in the U.S

#208

Post by ArkyBeagle » Wed, Feb 17, 2016, 11:42 PM UTC

Grishnakh wrote: post #196

heywiseguy wrote: post #75

Earlier quoted context omitted.

people who say this are talking about markets where the spread between renting and the finance cost of a similar bought property are huge. San Francisco, New York, LA... Let's say you're a couple years out of school and you work at Snapchat. Somehow you have a lot of money saved up and you can buy a little house near your office in Venice. A small house in Venice runs about $2m. So let's say you borrow 1.8m to pay fo…

Renting is cheaper than buying? That really doesn't make sense, and I don't think that's the case in most markets. In California, it might because of the funny way they do property taxes there, where new buyers get stuck with huge property tax bills but long-time owners are grandfathered at far lower rates, so the landlords are likely people who've owned the house for ages. Other states just aren't like this.

Renting can be cheaper or about the same as buying. And I mean a comparable property. You have to add it all up.

My landlord has probably shelled out $10k in repairs ( the house is at that magic 20 year point where everything fails ) in five years.

I've done the "buy cheap and spend the rest at Home Depot" thing. It's not bad, but it's not ideal. Unless I'm categorically certain of living in the house at least five years, I'll continue to rent.

I've done the math - I'd have less equity in a house of the same value than I have in raw cash freed up just from renting. And that's really not counting fees and closing costs.

Re: The Rise of Renting in the U.S

#209

Post by ecnal » Wed, Feb 17, 2016, 11:43 PM UTC

drawkbox wrote: post #34

The American Dream is looking more like a middle level marketing organization with false advertising for most. The problem is we just keep stripping away the middle class and lower class consumer power[1][2] and the solution is getting wages up to fix these issues. People wonder what happens in a consumer driven economy after stagnant wages since 2001, well this. It leads to Great Recessions, a sideways investment ma…

Those articles (and the data behind them) suggest the opposite of your point: the middle class is shrinking, yes, but it's shrinking because incomes are increasing and people who were previously in the middle class are moving into the upper class.

Re: The Rise of Renting in the U.S

#210

Post by onlyrealcuzzo » Wed, Feb 17, 2016, 11:51 PM UTC

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…

Conveniently, when you're ultra wealthy and pay interest-only, real estate is essentially a tax-shelter to transfer your wealth from income (taxed at 45%) to capital gains (taxed at 15%). Am I missing something?