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Owning nothing is now a luxury, thanks to a number of subscription startups

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Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#61

Post by quickthrower2 »

tehlike wrote: post #56
Barrin92 wrote: post #48

Earlier quoted context omitted.

Renting anything really isn't a bad move. There's not much upside to owning something that depreciates in value. Instead of buying a sofa for 2000$ renting one for 50 and putting the rest of your money into some productive financial asset is actually perfectly reasonable.

The calculation gets more complicated with appreciating land, and leverage.

Also if you pay off the mortgage let's say $2k/m then you are $2k/m better off after tax. Otoh if you rent and invest you need to make $2k/m after tax (so maybe $4k/m before tax, depending on where you live etc.) from the investment to be in the same position.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#62

Post by rebuilder »

apatters wrote: post #58
whatshisface wrote: post #5

This seems dangerous, like people are going to spend 100% of their paycheck every month and get everything taken away from them if they go a week without a job.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

It seems like you'd see the same kinds of problems with this as you would with predatory lending: even if the cost of a loan (or renting in this case) were much higher in even the medium term, if you're poor enough, it still makes sense because the alternative is not having enough money to live on, right now. Loans and renting are IMO potentially the same thing in this context.

It seems to me there's a fairly straightforward regulatory solution to this issue: require tighter financial checks, or reduce the protections given lenders in case of default.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#63

Post by cheschire »

Bombthecat wrote: post #47
chrisco255 wrote: post #26

Renting an apartment vs owning a house is not necessarily a bad financial move. Depends on a number of factors. For instance, if you anticipate moving within a certain time frame, between closing costs, mortgage fees, commission, etc...it can cost more to own in the first 3-5 years, especially if prices are stagnant. Also, there are hidden costs of home ownership not necessarily factored in for, like repairs, mainten…

Especially in Germany, where there is a new law coming out every five to ten years where you need to isolate your house or build solar or replace your old gas heater etc etc etc. Its all in the name of environment protection. But makes owning a house more of a risk then anything else..

If you establish regular communication with your Gemeindeverwaltung, and simply get approval for all changes and renovations, you will never be surprised.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#64

Post by onion2k »

Barrin92 wrote: post #48
chrisco255 wrote: post #26

Renting an apartment vs owning a house is not necessarily a bad financial move. Depends on a number of factors. For instance, if you anticipate moving within a certain time frame, between closing costs, mortgage fees, commission, etc...it can cost more to own in the first 3-5 years, especially if prices are stagnant. Also, there are hidden costs of home ownership not necessarily factored in for, like repairs, mainten…

Renting anything really isn't a bad move. There's not much upside to owning something that depreciates in value. Instead of buying a sofa for 2000$ renting one for 50 and putting the rest of your money into some productive financial asset is actually perfectly reasonable.

Technically you're right but the reality is that most people who choose to rent things other than a place to live are doing so because they want to use something that's better than what they can afford to buy on credit or outright. It's much more often about living a luxury lifestyle rathe than pragmatic financial sense.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#65

Post by taneq »

onion2k wrote: post #60
taneq wrote: post #21

Earlier quoted context omitted.

Basically the same thing except instead of renting off the "-as-a-service" crowd they're renting off the bank.

One small difference - eventually they pay the bank debt off and own the item. The as-a-service users pay forever.

A lot of people just keep their credit cards maxed, pay the minimum every month, and re-sell things they've bought at a loss.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#66

Post by ccozan »

Bombthecat wrote: post #47
chrisco255 wrote: post #26

Renting an apartment vs owning a house is not necessarily a bad financial move. Depends on a number of factors. For instance, if you anticipate moving within a certain time frame, between closing costs, mortgage fees, commission, etc...it can cost more to own in the first 3-5 years, especially if prices are stagnant. Also, there are hidden costs of home ownership not necessarily factored in for, like repairs, mainten…

Especially in Germany, where there is a new law coming out every five to ten years where you need to isolate your house or build solar or replace your old gas heater etc etc etc. Its all in the name of environment protection. But makes owning a house more of a risk then anything else..

I live in Germany and I never heard of this "need". Nobody forces you. Yes, you may want to change your old heating (that's what I do), but you get a lot of subvention from the state. You do this, then you also get some good terms on taxing etc.

Same with electricity. You get a better insurance policy if you have it new.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#67

Post by Godel_unicode »

jackcosgrove wrote: post #30
pembrook wrote: post #11

Earlier quoted context omitted.

Or on the flipside, I've got some contractor/consulting buddies who regularly pull down $200/hr bouncing between Tech companies in the Bay Area and Seattle and big banks in NYC. Not owning anything allows you to go where the work is and keep your net worth in assets that produce actual income (like index funds and bonds), instead of sitting around collecting unemployment during a dry spell because you're encumbered b…

I agree that many people already lived on a financial knife edge before all these rental services. However the example of a contractor who lives an unencumbered life and saves a lot of money is not at all typical. It's similar to using the example of an investment banking associate or corporate attorney who pay high rent in Manhattan for some years and invest the rest, as an argument against buying a home and having…

> better off with a mortgage because it forces them to save money

I'm going to go ahead and guess you don't have a large peer group who were buying houses in the late-2000s. A mortgage in no way forces you to save money, added to which it has a tendency to decrease savings due to the moral licensing of exactly your train of thought. "I'm already saving with my sweet ARM, I can afford to lease that car!"

People who are financially illiterate are going to be bad with money, regardless of the system.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#68

Post by JMTQp8lwXL »

lscharen wrote: post #20

“It is quite likely that, when you lived in America, you leased everything. You never owned anything, but someone else did and you had to pay for every single thing you used. That's another form of resource ownership that concentrates wealth.” — Manna, Chapter 5 — https://marshallbrain.com/manna1.htm

I'm still not convinced this is good for companies. They think everyone will stick around and keeping paying, unwavering loyalty month-after-month, when in reality, many people cancelled their HBO subscription after Game of Thrones was over. It doesn't really solve the volatility problem for business income. When the next downturn hits, guess what will be the first thing to go? Frivolous subscriptions.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#69

Post by JMTQp8lwXL »

apatters wrote: post #58
whatshisface wrote: post #5

This seems dangerous, like people are going to spend 100% of their paycheck every month and get everything taken away from them if they go a week without a job.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

In an efficient market, shouldn't the cost to own and cost to rent be roughly the same? Otherwise, everyone would rush to the clearly cheaper option.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#70

Post by JMTQp8lwXL »

jijji wrote: post #55
rishav_sharan wrote: post #22

I actually do this. I have rented 2 king size beds, a sofa, a 200l fridge, 40 inch led tv, small ac and a dining table for around $120 per month. In return i get complete peace of mind, free maintenance and the ability to update my furniture for no reason other than i want to. I personally am pretty happy with renting most of this stuff but will be buying my own dtuff once i have my own house

you can buy all of that on craigslist for ~$700 ... $100 for each bed, $100 (or free) for sofa, $200 for fridge $100 for tv, ac for $50 and dining table for $50.. If you plan on relocating in six months to another city, that might make sense...

I wouldn't buy or accept a free couch or bed from Craigslist. There's the potential for bed bugs. Anything with non-porous surfaces (outdoor furniture) is fine.
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