Renting is Throwing Money Away, Right? (2015) • Hacker News Board

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

#161

Post by IshKebab » Mon, Apr 23, 2018, 7:28 AM UTC

KKKKkkkk1 wrote: post #159

Since housing is an emotional subject, let's try to argue by analogy. I regularly buy lots of dairy products. Milk, yogurt, cheese. Why shouldn't I save some money and buy myself a cow instead? That way, I could satisfy all my dairy needs, and maybe even have some extra milk to sell to my neighbors. No more making the dairy farmers rich at my expense. Now, assume that I sell my cow ten years later. And let's say that…

A cow is not the same as a freehold property. Land does not age (except maybe near the sea), and houses generally last a very long time.

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

#162

Post by chrisseaton » Mon, Apr 23, 2018, 7:28 AM UTC

KKKKkkkk1 wrote: post #159

Since housing is an emotional subject, let's try to argue by analogy. I regularly buy lots of dairy products. Milk, yogurt, cheese. Why shouldn't I save some money and buy myself a cow instead? That way, I could satisfy all my dairy needs, and maybe even have some extra milk to sell to my neighbors. No more making the dairy farmers rich at my expense. Now, assume that I sell my cow ten years later. And let's say that…

So what are you arguing? You’ve just posed exactly the same questions we already had but in a cow theme.

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

#163

Post by [deleted] » Mon, Apr 23, 2018, 7:30 AM UTC

chrisseaton wrote: post #162

KKKKkkkk1 wrote: post #159

Since housing is an emotional subject, let's try to argue by analogy. I regularly buy lots of dairy products. Milk, yogurt, cheese. Why shouldn't I save some money and buy myself a cow instead? That way, I could satisfy all my dairy needs, and maybe even have some extra milk to sell to my neighbors. No more making the dairy farmers rich at my expense. Now, assume that I sell my cow ten years later. And let's say that…

So what are you arguing? You’ve just posed exactly the same questions we already had but in a cow theme.

[deleted]

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

#164

Post by piracy1 » Mon, Apr 23, 2018, 7:31 AM UTC

IshKebab wrote: post #161

KKKKkkkk1 wrote: post #159

Since housing is an emotional subject, let's try to argue by analogy. I regularly buy lots of dairy products. Milk, yogurt, cheese. Why shouldn't I save some money and buy myself a cow instead? That way, I could satisfy all my dairy needs, and maybe even have some extra milk to sell to my neighbors. No more making the dairy farmers rich at my expense. Now, assume that I sell my cow ten years later. And let's say that…

A cow is not the same as a freehold property. Land does not age (except maybe near the sea), and houses generally last a very long time.

Also, running a dairy farm requires some economy of scale that renting a house doesn't

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

#165

Post by erispoe » Mon, Apr 23, 2018, 7:32 AM UTC

Some of the countries with the lowest homeownership rates [1] are also amongst the most financially secure on the planet. In Switzerland only 43% of households own their home and swiss households are, on average, way more secure than their american counterparts.

[1]: https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...

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

#166

Post by thaumasiotes » Mon, Apr 23, 2018, 7:32 AM UTC

IshKebab wrote: post #161

KKKKkkkk1 wrote: post #159

Since housing is an emotional subject, let's try to argue by analogy. I regularly buy lots of dairy products. Milk, yogurt, cheese. Why shouldn't I save some money and buy myself a cow instead? That way, I could satisfy all my dairy needs, and maybe even have some extra milk to sell to my neighbors. No more making the dairy farmers rich at my expense. Now, assume that I sell my cow ten years later. And let's say that…

A cow is not the same as a freehold property. Land does not age (except maybe near the sea), and houses generally last a very long time.

> Land does not age

Tell it to the pastoral nomads who used to live in what is now the Sahara.

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

#167

Post by zwischenzug » Mon, Apr 23, 2018, 7:32 AM UTC

I'm fed up of having this argument in London.

I rent, and pay about 2% of the value of the property in a year. I get around 8% on shares over the last ten years.

Renting is an absolute no-brainer for me. People are shocked when I tell them how much return I get on my savings vs how much my rent is, especially when I tell them where I live (a 'premium' part of London).

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

#168

Post by Redoubts » Mon, Apr 23, 2018, 7:33 AM UTC

dash2 wrote: post #153

phamilton wrote: post #104

Earlier quoted context omitted.

> leverage angle is ignoring the fact that your equity can be wiped as well in a downturn I call that out when talking about "no recourse". If you leverage 5X in the stock market and invest $1M in index funds and the market drops by 30%, you are on the hook for the $100k beyond your $200k you lost. If you leverage 5X in a personal residence and the market drops by 30% (and you live in a no-recourse state), then you m…

> If you leverage 5X in a personal residence and the market drops by 30% (and you live in a no-recourse state), then you mail the keys to the bank and walk away. Very unique situation. But that seems dishonest.

Why? Lending is a risk on both ends.

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

#169

Post by leoedin » Mon, Apr 23, 2018, 7:38 AM UTC

littlestymaar wrote: post #130

> You hold a 5 percent fixed-rate 30-year mortgage Wait, are you Americans paying 5% interest on mortgage, whitout even counting insurance? For real?! Edit: Having looked at other comments in this thread, it looks like interest are taxe-deductible, which makes it more affordable, but that's also really weird: it means the gouvernment subsidizes financial institutions to charge American consumers a lot more than the n…

My mortgage in the UK is currently 1.08%. Interest gains are negligible compared to paying off the capital at that rate.

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

#170

Post by chrisseaton » Mon, Apr 23, 2018, 7:39 AM UTC

zwischenzug wrote: post #167

I'm fed up of having this argument in London. I rent, and pay about 2% of the value of the property in a year. I get around 8% on shares over the last ten years. Renting is an absolute no-brainer for me. People are shocked when I tell them how much return I get on my savings vs how much my rent is, especially when I tell them where I live (a 'premium' part of London).

I don’t understand why you are arguing in favour of renting with those numbers.

You pay more in rent than you would do for a mortgage, and you earn less from your shares than you would do from London property price rises... what’s the upside of renting in your case?