Renting is Throwing Money Away, Right? (2015)
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Renting is Throwing Money Away, Right? (2015)
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Re: Renting is Throwing Money Away, Right? (2015)
#2what sucks is that any savings is taken by property taxes, especially in NJ, NY etc. And they go up every year. That alone is in many cases as much as rent (albeit on a smaller place, but still) http://www.nj.com/politics/index.ssf/2018/03/nj_towns_with_t... Hey, at least state officials will have nice pensions wen they retire.
Re: Renting is Throwing Money Away, Right? (2015)
#3As a technologist who is a part-time real estate investor, this article, like many others, fails to take into account the context of the situations that people can face. There are plenty of situations where buying is better than renting, and plenty where renting is better than buying.
One major concept that breaks the traditional buy/rent arguments is that today we have the internet which creates a new type of opportunity: to work in a different city than where the company is physically located. This greatly changes the dynamic and enables new types of opportunities. Want to see the world? Then don't buy because you could live in 10 countries over 10 years for the same price (or maybe even cheaper depending on where you would have bought).
Point being, there are times where buying is the responsible decision, but renting can also at times be the smart decision. Don't let articles like this influence your decision. Make a spreadsheet, really dig into what are the pros/cons. I've helped many friends do this, and sometimes buying was the right decision, and sometimes it wasn't. What are your life goals? What are your investment goals? There are so many variables at play.
Do what's best for you. I rented for 12 years before I bought. If I had bought earlier, I would have been less likely to move...moving helped me advance my career more quickly but meant I rented longer. In the long run that was the right thing for me as I was able to buy a bigger place in a more expensive area (NYC vs Dallas). For others that might not have been important or necessary. Just because one person has a negative experience doesn't mean that you will to. The responsible thing to do is to understand what _you want_ and make sure you're making the right decisions to make that happen. Buy or rent based on that, not the other way around!!!
Re: Renting is Throwing Money Away, Right? (2015)
#4As a commitment averse 30-something perpetual renter I've always felt like I was "throwing money away" by renting - but having breakages, plumping, electricity, etc be someone else's problem was how I often justified it to myself. While I'm sure, like anything, the decision to rent or own is highly situational this article still gives me some hope that I haven't made every wrong decision when it comes to "build or buy".
Re: Renting is Throwing Money Away, Right? (2015)
#5The financial arguments assume one only pays the minimum mortgage payment amount. Many people add a bit extra each month which can quickly turn a 30 year mortgage into a 9-12 year mortgage.
It also ignores many of the other benefits of owning, such as having a lot more say over what you do with the propert and not always having to worry about rent increases or what happens when the lease ends.
The rent vs buy equation is never black and white but this article comes across as quite one sided.
Re: Renting is Throwing Money Away, Right? (2015)
#6Through complicated financial tools with all kinds of different tax implications, fees, and mental/time burden for management, yes a small subset of medium to high income people can attain similar returns on investment as a homeowner while renting in certain situations. But the very backbone of the American middle class has always been home ownership. It’s a simple, understandable investment which holds tangible value regardless of it’s current market price. The tax incentives in the US for the average wage earner are so heavily skewed toward home ownership that it is almost impossible to make it into the middle class any other way.
Re: Renting is Throwing Money Away, Right? (2015)
#7He has a point. I learned this the hard way when I looked at the amortization tables when i bought my first house, it still stings when I think about it.
That said, mortgage interest is tax deductible, which lead to a decent refund this year. So assuming you’re not withholding income at your effective tax rate (but the usual 25-30%) you’ll get a fair amount of it back, which I don’t believe you would if you rent.
So yes, mortgages are throwing away money as well (less equity and reduction in tax liability)
Re: Renting is Throwing Money Away, Right? (2015)
#8As a technologist who is a part-time real estate investor, this article, like many others, fails to take into account the context of the situations that people can face. There are plenty of situations where buying is better than renting, and plenty where renting is better than buying. One major concept that breaks the traditional buy/rent arguments is that today we have the internet which creates a new type of opport…
> As a technologist who is a part-time real estate investor, this article, like many others, fails to take into account the context of the situations that people can face. There are plenty of situations where buying is better than renting, and plenty where renting is better than buying.
I think the article very adequately explained exactly what you're talking about. Did you read it all the way through? It's pretty long, but she definitely covers how individual situations vary. Her whole point is that buying based off of a cliche is wrong, and every person owes it to themselves to analyze their own situation to make that decision.
Re: Renting is Throwing Money Away, Right? (2015)
#9The financial arguments assume one only pays the minimum mortgage payment amount. Many people add a bit extra each month which can quickly turn a 30 year mortgage into a 9-12 year mortgage. It also ignores many of the other benefits of owning, such as having a lot more say over what you do with the propert and not always having to worry about rent increases or what happens when the lease ends. The rent vs buy equatio…
"...and honestly sounds like someone trying to justify their decision to not own property."
The author literally states that they are a homeowner themselves.
Re: Renting is Throwing Money Away, Right? (2015)
#10what sucks is that any savings is taken by property taxes, especially in NJ, NY etc. And they go up every year. That alone is in many cases as much as rent (albeit on a smaller place, but still) http://www.nj.com/politics/index.ssf/2018/03/nj_towns_with_t... Hey, at least state officials will have nice pensions wen they retire.
Your property taxes and mortgage insurance are deductible where rent is not. If you look hard enough in NJ/NY areas you can find places where the principal is near the rent price and you deduct the rest. In the long run that works out to your favor.
Not everyone can afford such a situation and the new Trump tax changes don't help either. Just saying "I should rent" is irresponsible because you think you're bumping the state pension funds. When you rent you're helping an owner pay off their mortgage as well as the very taxes to pay that pension fund.