Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Rise of the Rich Renter

citylab.com

Post reply on HN
Print view View original

11–20 of 63 posts

Re: The Rise of the Rich Renter

#11

Post by noobermin »

paulpauper wrote: post #9

Here’s the upshot: rich households—those earning more than 120 percent of the metro median income—saw their renter share rise by 1.2 percent between 2012 and 2015. Since 2006, that growth was a striking 6.2 percent. The renter share among households making less than 50 percent of the median income, on the other hand, remained roughly the same since 2012. Since 2006, it grew by a modest 2.9 percent. More educated subs…

That does seem super weak sauce. Also, the "striking" 6.2% included 2008, who's to say that the even among the 1.2 X median people, that the economic hurt wasn't enough to explain the delta there?

Re: The Rise of the Rich Renter

#12

Post by blackguardx »

walshemj wrote: post #3
jseliger wrote: post #2

It may also be that smart rich people have gotten over the cult of homeownership: https://www.ft.com/content/00bf5968-f518-11e2-b4f8-00144feab... or http://www.slate.com/blogs/moneybox/2013/07/29/political_eco... . Or search for the term "The cult of homeownership" for more. There are well-known possible positives to owning but the negatives are vast too, especially compared to investing in an ultra-low-fee index fun…

realy so why are non residents buying housing as an investment in London Sf NY and Vancouver? And if your rich diversifying from just a me to index fund makes a lot of sense hint if the Rothschild's and other mega rich families run actively managed funds its probably a good idea for you to - I have done very nicely out of RCP on the LSE

Rich people invest in property because they have enough money to view a million dollar condo as a diversification strategy. Property can be a good investment, but shouldn't be your only investment.

Re: The Rise of the Rich Renter

#13

Post by ComradeTaco »

Many of those who have high incomes would prefer to build equity rather than hand it to landowners. However incomes only rose only modestly above inflation while real estate prices have doubled and even tripled in many places.

We're really in trouble as a society if essentials like education, healthcare and housing continue to eat an increasingly large portion of consumer income.

Re: The Rise of the Rich Renter

#14

Post by yardie »

jquery wrote: post #4

Don’t kid, most people aren’t renting because they prefer it. We shouldn’t glorify unaffordability. My “rich” coworkers would largely love to own but they can’t afford the mammoth down payments, and the sky high rents plus sky high taxes make it difficult to save. “One of Aesop's best-known fables is “The Fox and the Grapes.” On its surface, or its literal level of meaning, the story tells of a fox who wants a bunch…

I would say it depends. Some places RE is so hot while rental vacancies are high that it makes sense to rent. The days of flipping houses to gain 20-50% profit are long gone. A lot of property in our area is being bought by foreign investors. I feel, unless they hold for 10-15 years they will never make their money back.

From experience, we’re closing on a house now and not paying much more than the previous owner 10 years ago. 5 years ago we could have probably could have bought for 50% lower.

Re: The Rise of the Rich Renter

#15

Post by efficax »

I make a decent living, way above median household income, but my wife and I rent in a dense urban center for the simple reason that even with our income we couldn't afford to own in this area. Even if we weren't paying student loans it would take several years to build up a down payment that would result in cheaper mortgage payments than our rent burden, which would be crucial since homeownership adds property taxes and significant upkeep costs above the mortgage payment. Sure, we could afford a house in the 'burbs, but we don't want to live in the 'burbs. The rent is too damn high, but so are the housing prices.

Re: The Rise of the Rich Renter

#16

Post by sidlls »

blackguardx wrote: post #12
walshemj wrote: post #3

Earlier quoted context omitted.

realy so why are non residents buying housing as an investment in London Sf NY and Vancouver? And if your rich diversifying from just a me to index fund makes a lot of sense hint if the Rothschild's and other mega rich families run actively managed funds its probably a good idea for you to - I have done very nicely out of RCP on the LSE

Rich people invest in property because they have enough money to view a million dollar condo as a diversification strategy. Property can be a good investment, but shouldn't be your only investment.

I'd take 10 houses for $200k in the Midwest over one $2m house in the Bay Area. Appreciation is lower, but rents (as a percentage of cost) are much, much better. The shortfall in appreciation can easily be made up for in better rent yield.

Re: The Rise of the Rich Renter

#17

Post by noobermin »

walshemj wrote: post #3
jseliger wrote: post #2

It may also be that smart rich people have gotten over the cult of homeownership: https://www.ft.com/content/00bf5968-f518-11e2-b4f8-00144feab... or http://www.slate.com/blogs/moneybox/2013/07/29/political_eco... . Or search for the term "The cult of homeownership" for more. There are well-known possible positives to owning but the negatives are vast too, especially compared to investing in an ultra-low-fee index fun…

realy so why are non residents buying housing as an investment in London Sf NY and Vancouver? And if your rich diversifying from just a me to index fund makes a lot of sense hint if the Rothschild's and other mega rich families run actively managed funds its probably a good idea for you to - I have done very nicely out of RCP on the LSE

I mean, what you're raising is a valid question and one that has been alluded to here before. However, it is pretty politically charged and it's only tangentially related to this article, hence it seems in poor taste to bring it up here.

Re: The Rise of the Rich Renter

#18

Post by sanswork »

walshemj wrote: post #6
seqastian wrote: post #5

Earlier quoted context omitted.

Cause they can't find other save investments and have cash burning in their pocket.

Why are not stocks /funds on the LSE NYSE the same unless the cash is from the black market and they cant pass money laundering regs?

Some countries have limits on how much money you can expatriate each year. Some of these also have rules that allow you to move more money as long as it is going to certain things(building industry, land/home purchases, etc).

Re: The Rise of the Rich Renter

#19

Post by sanswork »

sidlls wrote: post #16
blackguardx wrote: post #12

Earlier quoted context omitted.

Rich people invest in property because they have enough money to view a million dollar condo as a diversification strategy. Property can be a good investment, but shouldn't be your only investment.

I'd take 10 houses for $200k in the Midwest over one $2m house in the Bay Area. Appreciation is lower, but rents (as a percentage of cost) are much, much better. The shortfall in appreciation can easily be made up for in better rent yield.

How does it look once you account for closing costs on 10 houses, maintenance and management of 10 rental properties, etc?

Re: The Rise of the Rich Renter

#20

Post by yardie »

We currently live 3 blocks from the beach and have no intention of buying here. The older buildings are prone to flooding, some are sinking, and the foundations are cracking. The newer buildings are incredibly expensive.

We’ll stay here until it no longer makes financial sense. Until then I continue to rent while stashing money away for property not near the slowly rising oceans.

Post reply on HN