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Renting is Throwing Money Away, Right? (2015)

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Re: Renting is Throwing Money Away, Right? (2015)

#21

Post by chrisseaton »

jimmy1 wrote: post #16

When the goal is to have a roof over your head, between renting or buying, the better option is to buy. If the goal is to invest wisely, of course buying a house is worse than say something like an index fund. But the problem is: I can't sleep in an index fund. A house isn't a depreciating asset. Renting is not an asset at all. Mortgages are fixed. Rent tends to frequently increase, skyrocketing at worse. This articl…

> owning is cheaper than renting

This is the key thing! Obviously owning is cheaper than renting, as renters have to cover the costs of their landlord owning, and then some profit for them on top of that.

Re: Renting is Throwing Money Away, Right? (2015)

#22

Post by greglindahl »

sokoloff wrote: post #19
ouid wrote: post #12

Rent, in an arbitrage free economy, should be exactly equal to the interest on the mortgage plus wear and tear on the house.

Plus the property taxes, insurance, and cost of capital for the downpayment.

And the cost of risk, which is partly covered by insurance, which costs money.

Re: Renting is Throwing Money Away, Right? (2015)

#23

Post by closeparen »

aphextron wrote: post #6

Through 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 valu…

I'm not sure what's simple or understandable about a basic staple of life whose real value is skyrocketing. It's not at all clear whether the next generation will actually be able to afford housing at anywhere near current valuations. Maybe future Americans can afford to allocate a greater share of their incomes to housing, but the economic effects of the disappearance of all non-housing consumer spending (as mortgages approach 100% of paychecks) might not be great for home values. Who knows? Anyway, not simple.

Re: Renting is Throwing Money Away, Right? (2015)

#24

Post by gefh »

saosebastiao wrote: post #13
dyarosla wrote: post #9

Earlier quoted context omitted.

"...and honestly sounds like someone trying to justify their decision to not own property." The author literally states that they are a homeowner themselves.

Not just a homeowner but a real estate investor. https://affordanything.com/how-we-made-43211-67-in-passive-i...

Ah, so he's trying to reduce the competition :)

Re: Renting is Throwing Money Away, Right? (2015)

#25

Post by [deleted] »

saosebastiao wrote: post #13
dyarosla wrote: post #9

Earlier quoted context omitted.

"...and honestly sounds like someone trying to justify their decision to not own property." The author literally states that they are a homeowner themselves.

Not just a homeowner but a real estate investor. https://affordanything.com/how-we-made-43211-67-in-passive-i...

[deleted]

Re: Renting is Throwing Money Away, Right? (2015)

#26

Post by imbur »

Home buyers often overlook the cost of selling their home when considering if renting is cheaper. That is 6% in realtors fees and another 2-3% in closing costs. Renting is a great deal if you are not going to live somewhere for 5+ years before moving

Re: Renting is Throwing Money Away, Right? (2015)

#28

Post by jwong_ »

chrisabrams wrote: post #10
onetimemanytime wrote: post #2

what 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 th…

What do you use to find these areas?

Is there any particular neighborhoods you're willing to share?

Re: Renting is Throwing Money Away, Right? (2015)

#29

Post by saosebastiao »

closeparen wrote: post #23
aphextron wrote: post #6

Through 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 valu…

I'm not sure what's simple or understandable about a basic staple of life whose real value is skyrocketing. It's not at all clear whether the next generation will actually be able to afford housing at anywhere near current valuations. Maybe future Americans can afford to allocate a greater share of their incomes to housing, but the economic effects of the disappearance of all non-housing consumer spending (as mortgag…

Wholesale housing policy reform is what's going to happen. It might take a decade or so, but it's gonna happen.

Re: Renting is Throwing Money Away, Right? (2015)

#30

Post by lath »

I own because I like knowing I can modify my living space however I like. I took out a bedroom to make a home theater, could never do that renting. There are definitely advantages to home ownership psychologically that can’t be defined in a dollar figure.

His main point though was that renting isn’t throwing money away. I say if renting is the better option for you then who cares?

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