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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

#171

Post by yardie »

dagw wrote: post #119
dingaling wrote: post #101

Earlier quoted context omitted.

> Finally, one can use the savings from paying rent What savings? Rent as you stated already includes anticipated maintenance costs, property taxes, the landlord's mortgage costs, often an agency fee, plus a margin for the landlord. I don't think I've seen rental rates ever cheaper than a personal mortgage. The main advantage of renting is avoiding long-term commitment but you'll pay a premium for that flexibility. O…

I don't know what it's like in the US, but in Sweden you can get a much better deal on your mortgage if you only have to borrow 80% of the cost of the house than if you have to borrow 95+%, even when borrowing the same amount. If you have a good job and can afford $1500/month but don't have any savings to use as a down payment on a house you're not going to able to get as nice a place buying as you will renting.

It’s similar in the US. If contributing less then 20% you have to pay PMI (mortgage insurance). This may add a few $100s per month to your payment but in no way contributes to the principal. It works against you in other ways because it limits your upper price limit as banks want your payments to be within 30% of your AGI

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

#172

Post by pjc50 »

TeMPOraL wrote: post #118
oarsinsync wrote: post #116

Earlier quoted context omitted.

London's also a bit of an odd one in that regard. You either need half a million+ for a shoebox or to live way out of town, and run the risk that the foreign-investment-fueled housing bubble collapses off the back of Brexit, leaving you with more mortgage than equity. (This is why I'm still renting...)

At this point one has to wonder, who's making money off Brexit situation still being unresolved...

You could work backwards by looking at how the "Brexit party" managed to split and regenerate from UKIP to run a campaign across all the Euro election seats in a matter of months. Where did that come from? They claim to have raised ""£750,000 in donations online, all in small sums of less than £500" in their first ten days"; given that Farage is currently under investigation for his funding https://www.theguardian.com/politics/2019/may/21/eu-investig... , it might be worth considering alternative explanations.

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

#173

Post by roland35 »

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…

This is totally true and something a lot of people seem to forget about when they want to move out of their apartments to buy a house! I think the most important thing is to wait until you know your living situation is relatively stable (married, family, job, etc) so you can stay in your place 10+ years hopefully. Moving sucks!

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

#174

Post by roland35 »

jaabe wrote: post #82
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…

In Denmark where I live you can loan 1 million Danish kroner at around 5k each month. A decent downtown apartment in a bigger city or a house in the suburbs is 2-4 million. Renting the equivalent is 10-15k, and with renting you obviously skip a lot of the maintenance cost and taxes. On the flip side loans are tax-deductible, meaning you actually don’t pay 20k to borrow 4 million, you pay 12k. It can still be cheaper…

That is interesting loans are tax deductible in Denmark, I always thought that was just a US thing! From my understanding of the new federal tax law though, the higher standard deduction makes the mortgage tax credit less feasible for most people.

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

#175

Post by rchaud »

scottlocklin wrote: post #160
CPLX wrote: post #136

When I was a kid in the 80’s renting home furnishings, driving a taxi on the side, and renting out spare rooms in your house were all very common activities too. They were generally things people did because they didn’t have stable well paying jobs. That’s still the reason. All this disruptive new economy rebranding notwithstanding.

I'm waiting for rentacenter to rebrand itself as "appliances and furniture as a service."

If they don't, you can be sure that Techcrunch will profile a scrappy startup doing exactly this, closing multi-million funding rounds on the promise of being "WeWork for furnishings".

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

#176

Post by pjc50 »

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.

> There's not much upside to owning something that depreciates in value.

Sure, so why is the sofa rental company in the business of owning sofas?

You've got to ask the question from the other side. You're paying someone else's cost of ownership and interest and overhead and profit margin.

In practice what consumer goods rental competes with is consumer credit. People don't sit on the floor for months while they save up the $2000 for the sofa, they buy it on credit. Lots of places offer interest free credit too! e.g. https://www.dfs.co.uk/content/finance

For most people there is no "rest of the money".

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

#177

Post by pjc50 »

ccozan wrote: post #133
foepys wrote: post #94

Earlier quoted context omitted.

Actually, you have to replace your heating every 30 years. Unless you are exempt, which is becoming more and more unlikely. See EnEV §10.

True ( I didn't know! ), but is damn 30 years!! I'm not sure that they last so long, especially the gas-based. And I am getting an exempt, because I am using Holzpellets ( not sure how are they called in English ) EDIT: Wood pellets, that is.

I would be astonished to find any heating system more complicated than an open fire that lasted more than 30 years.

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

#178

Post by pjc50 »

pintxo wrote: post #98
vintermann wrote: post #93

Earlier quoted context omitted.

Germany is special in more ways than one, as I understand owning isn't so heavily subsidized vs. renting there compared to other western countries. It's at least far more common to rent in Germany. You also ran pretty clear of the housing bubble. I wonder if there's a connection there.

I'd argue that the connection is that owning real estate here is not as heavily supported by the overall tax and financial framework. Two examples: Mortgage payments are not tax-deductible and and you are personally on the hook for the mortgage, as in you cannot send the keys to the bank and simply walk away without debt.

Those are also true of the UK with its massive property bubble, although curiously landlords can deduct mortgage from tax but owner-occupiers can't.

I think the real difference is that Germany has proper tenant's rights and a functioning social landlord system.

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

#179

Post by grecy »

mark_l_watson wrote: post #157

I have thought about this lately because my wife and I moved to Illinois so I could accept a job managing a machine learning team. I retired and now we are just now moving back to Arizona. I spent five hours yesterday watching our stuff being wrapped and put on a truck. Lots of possessions. The thing is, I have some stuff that I really like. A teak bookcase I bought in the 1970s when I got my first real job after fin…

Keep it if it brings you happiness, after all, that's the point.

It's the rest of the stuff that can go. I helped a friend move last month. After we'd been to the 5 places she kept her stuff, we discovered she had 5 coffee machines, 5 cutting boards, 5 juicers, etc. etc.

The things you describe make you happier and are not stuff. The things I described are just stuff.

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

#180

Post by jordanpg »

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

My main objection to this sort of thing is the logistical overhead of living with it and dealing with the eventual returns.

You have to keep track, mentally or otherwise, of what's rented and what's not. You will treat the rented things differently, even if only subconsciously.

When the time comes to return it, you have to deal with a website or a flurry of emails. Probably there is some boxing and taping and printing and packing and mailing. You have to verify the return is received and monies are refunded.

I guess some money is saved, and perhaps reuse is encouraged, but at the expense of cognitive cycles and time.

I'd rather just buy. The ecological wastefulness argument strikes me as, like recycling, operating on very, very thin margins.

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