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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

#331

Post by schrodinger »

jandrese wrote: post #306
javanix wrote: post #271

Earlier quoted context omitted.

Absurdly high taxes (my parents pay half my tax on a non-rural property twice as big about 120 miles north of me), but still, owning a home is hardly a fiscally ruinous proposition around here. My property taxes this year were ~$4200 on an average sized lot and home, or roughly $350/month. My last apartment cost $1050/month for a small two bedroom condo rental.

This is similar to my situation. Renting a crappy 2BR apartment was $1700/month thanks to the tight rental market. Mortgage and taxes on a townhouse in a nicer part of town? $1200/month. And theoretically after 30 years I would have an asset I could sell, unlike the renters. Renting just didn't make sense unless you're highly itinerant and don't stick around any one area for more than a year or two.

What if you had rented and invested that 500/month (and the maintenance costs you had to pay along the way) in index funds?

Re: The Rise of Renting in the U.S

#332

Post by brianwawok »

csomar wrote: post #38
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....

Apples to Oranges. If you are renting you are prioritizing the location rather than the house. You can't find a house with your ideal gym, but you can't change your city to New York city. The way I see it: If you don't plan to live in that place for the next 15-20 years, then you shouldn't buy. You can always invest your money in more liquid assets.

15-20 years seems a bit steep.

If staying in a city 1 year, you almost certainly should rent. If staying in a city for a guaranteed 30 years, you almost certainly should buy.

The exact place where those two switch over? It can vary on a lot of things. Single and gonna get married soon? Buying a studio condo may not be that smart. Married with 3 kids and stable schools and family? May tip towards the buy sooner range..

For example where I live (not major city), I cannot rent a house like the one I buy. The best house I can rent would cost 50% more than my mortgage payment, and only be about 75% as nice.

Re: The Rise of Renting in the U.S

#333

Post by turar »

JackFr wrote: post #199
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…

Point taken about the high rate environment -- I'm not sure where I thought that other money would go. But it's still not obvious that you would be better off under your plan. You're financing two assets, you home and your portfolio with some mixture of debt and equity. Without making assumptions about the expected return of the housing market, the return on your portfolio, the variance of those returns and the horiz…

Correct, that's why I said that it was an assumption. I picked that ETF because I think the underlying assets would do well over the next 30 years, and also because it's relatively cheap to other ETFs because of the under-performance you mentioned. You can substitute any other asset there really that you think would perform better than 3.5%.

Re: The Rise of Renting in the U.S

#334

Post by toddchambery »

tomp wrote: post #317
sheraz wrote: post #314

Earlier quoted context omitted.

Really? Almost every woman I know has an innate fear of walking alone at night. I'm not sure of the statistics, but my guess is that violent crime like rape happens far more to women to men.

A quick Google search brings up Canadian statistics [0]. In total, it's about equal (F: 50.15% M: 49.85%). Removing "criminal harrassment" and "uttering threats" (which are not really violent crimes) makes little difference (F: 48.62% M: 51.38%). For rape ("sexual assault"), women "win" by far (F: 91.89% M: 8.11%), but it's much less frequent than "aggravated assault" and "robbery". Also, I'm assuming that "sexual as…

I wonder how much these numbers are a result of a kind selection bias, i.e. women don't put themselves in situations because of natural disposition/perceived higher risk (this is certainly the case in my experience).

Re: The Rise of Renting in the U.S

#335

Post by ThrustVectoring »

seizethecheese wrote: post #225
Tsagadai wrote: post #222

Earlier quoted context omitted.

Have you been to China lately? Many Chinese cities are what happens when you allow supply to meet demand. Prices don't necessarily come down with increased supply because it also increases speculation (and contrary to economists believes we are not rational actors). Demand also follows supply, if you increase supply there is often an increase in demand because now people can move to $desirable_location.

> Many Chinese cities are what happens when you allow supply to meet demand. Um, no. Chinese cities are a direct result of government policies to boost GDP through construction and are the supply of housing has little to do with market forces.

IMO it's more because of Chinese capital controls: buying an apartment that sits empty for fifteen years is literally the best option they have for turning money today into something valuable when they're old and cannot work.

Re: The Rise of Renting in the U.S

#336

Post by cylinder »

cmdrfred wrote: post #230
toomuchtodo wrote: post #140

Earlier quoted context omitted.

It's simple the same way exercise is simple: knowing what to do is easy, having willpower to do it is hard. Being financially independent can be done on a median wage, full stop. https://www.reddit.com/r/financialindependence http://www.mrmoneymustache.com/ "Is that all too fluffy and philosophical? OK, fine. Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live…

I believe you are correct with it being possible on a median wage (with a great deal of scrimping and saving at that level for a decent period of time) but half of people make much less than that. So it isn't really possible for 150 million Americans or so.

It'd be a lot more feasible if they didn't have to pay enormous and unpredictable health insurance premiums, deductibles, coinsurance, uncovered costs, etc.

Re: The Rise of Renting in the U.S

#337

Post by at-fates-hands »

2muchcoffeeman wrote: post #251
at-fates-hands wrote: post #33

The article doesn't really touch on two very key facts. 1 - When I grew up in the 90's all I heard from my rich business owners were to buy real estate. The value always goes up and its a good investment. This isn't true anymore with the crash and younger people don't see real estate as a worthwhile, long term investment. As such, they're not looking at paying for something for so long and not getting anything out of…

Are leases so short there that they can just move every few months?

Closer to 6 months, but yes. They put an ad on craigslist or some of the other smaller publications like the kind you see at bars. They pool their money, get a small ad that talks about taking over a lease near some hip part of town.

My nephew said within a week or so they're flooded with responses, They work out the paperwork with the landlord and they're on to the next place.

Re: The Rise of Renting in the U.S

#339

Post by goldfeld »

jdubs wrote: post #282
taurath wrote: post #203

Earlier quoted context omitted.

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.

Hindsight is 20/20.

Reading (but not the news) and having diverse friendships could also work.

Re: The Rise of Renting in the U.S

#340

Post by Jach »

marincounty wrote: post #246
lowglow wrote: post #221

Earlier quoted context omitted.

I park it wherever, but mostly try to stick to cities where it's legal to sleep in your van. While I have parked in San Francisco, Redwood City, and San Jose, right now I'm crashing in and around Palo Alto, CA. I shower every morning at my local 24 hour super sport gym. I'm a sucker for hygiene. I don't really worry about my van being broken into because I think I tend to stay in low crime neighborhoods. I'm also not…

I think you should write a book, but don't go through the vanity press ripoff. Publish it yourself. I have known people who live out of a van/truck camper until cops realize what's going on. They will harass you to no end. The tickets are expensive. The days of " Just move on." are over. That said, in most counties, there is nowhere to park a vechicle overnight. We need to desiginate areas, in commercial areas, where…

My safe strat for the scenario is to go to the plentiful Rest Areas along the freeways: http://restareas.appspot.com/ Maybe inconvenient sometimes to go to and from, but then again, if I'm living out of a vehicle, I'm not all that concerned about convenience.
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