Owning nothing is now a luxury, thanks to a number of subscription startups • Hacker News Board

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

#241

Post by andreilys » Tue, Jun 11, 2019, 2:23 PM UTC

Spooky23 wrote: post #234

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…

Only in very specific, unusual market conditions. Less than 3 years it makes sense to rent, but even then it’s difficult to time it so you align with the lease end. I live in a national average housing market, bought a house in 2006, and save about 30% on a monthly basis as compared to a much smaller two-bedroom apartment. I include mortgage, tax, insurance and a 7% holdback for repairs. Long term, renting is always…

The housing boom of the last few decades is a 'very specific unusual market condition'. Is it realistic for housing prices to keep rising at their current rate?

Also in your cost calculation did you include the rate of return you would've made of your principal by putting it into equities? I imagine if you bought in 2006 and held you would be very happy right now.

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

#242

Post by ZeroFries » Tue, Jun 11, 2019, 2:25 PM UTC

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.

The math might not work out as poorly as you imagine. I don't know the exact numbers for Sweden, but in Canada (where insurance is required for downpayment less than 20%), putting 5% is actually not a bad move, even if you have 20% down ready, because, similar to the arguments for rent, you can invest the difference and make similar returns to the extra costs for the mortgage.

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

#243

Post by mywittyname » Tue, Jun 11, 2019, 2:27 PM UTC

Thorrez wrote: post #95

apatters wrote: post #81

Earlier quoted context omitted.

A rational/efficient example of where renting might be a better deal for you is if you don't have access to wholesale prices and someone else does. They buy at a discount and then they rent out to you at a price which makes it cheaper for you than buying at retail. A classic scenario is renting a movie. Let's use DVDs as an example--even though they're falling out of favor, they're a little simpler to talk about, and…

I doubt studios want to give Redbox a discount, because rentals cut into sales, which the studios care about more than rentals. Redbox operates because of first-sale doctrine. I assume Redbox pays the same as stores pay, which is indeed cheaper than what a consumer pays, but there's no discount especially for Redbox. Why do digital rentals cost more than physical rentals? Because first-sale doctrine doesn't apply to…

Studios used to give discounts to movie rental companies. An old girlfriend of mine managed one about $15 years ago and I seem to remember the prices for new DVDs being $4-6 on the order form. This was for movies that retailed in the $15-20 range.

I think what happened is they started selling to Walmart et al for the same price.

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

#244

Post by skizm » Tue, Jun 11, 2019, 2:31 PM UTC

Spooky23 wrote: post #234

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…

Only in very specific, unusual market conditions. Less than 3 years it makes sense to rent, but even then it’s difficult to time it so you align with the lease end. I live in a national average housing market, bought a house in 2006, and save about 30% on a monthly basis as compared to a much smaller two-bedroom apartment. I include mortgage, tax, insurance and a 7% holdback for repairs. Long term, renting is always…

Except in NYC, SF, Seattle, and maybe a few other HCOL metro areas. HOA fees usually make it a losing financial proposition even on an infinite timeline. There is literally (and not figuratively) no benefit, financial or otherwise, to buying unless you get a really good deal. I know because I'm in the market to buy something and there's not much out there that will "beat" my current renting situation long term.

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

#245

Post by refurb » Tue, Jun 11, 2019, 2:34 PM UTC

madengr wrote: post #216

refurb wrote: post #208

Earlier quoted context omitted.

Renting is absolutely cheaper in some cities, San Francisco included. Just look at the rent to price ratio. A ratio of 15 is breakeven, anything higher means it’s cheaper to rent. SF is in the high 20s. The rental market and housing market are two separate markets. Just because it costs $X to own a home doesn’t mean rent has to be $X or higher.

Well they typically don’t make 500 ft^2 homes for $1M, but you can find 500 ft^2 apartments for $3k/month. I think a house has a minimum size, thus a minimum price over that of rent.

The same holds true for houses. As someone who has been following the SF market closely, an 1100 sq ft house that's worth $1.1M would cost $5,300 in cash flow per month (mortgage, taxes, insurance) plus another $925 in opportunity cost (down payment @ 5%) for a grand total of $6225. And that's not including maintenance costs.

The same home could be rented for ~$4500 per month.

Keep in mind that most rented houses were purchased a while ago. If you bought the same house when it was $700K, you could still make a profit on a rent of $4500.

The reason why owning costs more is because buyers are also assuming appreciation. If you sell the same house for $1.5M 5 years later, you still make a nice profit even if your monthly cash flow is negative.

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

#246

Post by asark » Tue, Jun 11, 2019, 2:34 PM UTC

mywittyname wrote: post #230

madengr wrote: post #209

Earlier quoted context omitted.

I hate seeing all this garbage from Ikea when there are plenty sturdy “antiques” made from hard woods, as opposed to sawdust, glue, and cam locks. I have a some furniture hand made from my great-grandfather, grandfather, and father. I made a nice pair of speakers. This stuff will go to my kids. Much rather buy from the Amish furniture store and pay more, than the disposable shit from Ikea.

Ikea has lots of products that are made of solid pine. If you use some wood glue during assembly, their stuff will stay together quite well. I have some stuff I bought 10+ years ago hold together after a half-dozen moves with some basic mods. I recently furnished my first "adult" house after years of having an Ikea apartment. I was pretty amazed at how up-market you have to go in order to exceed Ikea quality in comme…

I've observed the price of furniture to run, lowest to highest, something like:

Bad Ikea, Flat-Pack Furniture from Anywhere Else, Beat-Up Antiques, Good Ikea, Unfashionable but Good Antiques, Oversized Overstuffed NFM[1] crap, Actually Good New Furniture, Fashionable Antiques

Not linear, there's a big jump for the last two categories.

While the quality/longevity runs more like:

Flat-Pack Furniture from Anywhere Else, Bad Ikea = Oversized Overstuffed NFM Crap, Good Ikea, Beat-Up Antiques, Unfasionable but Good Antiques = Fashionable Antiques = Actually Good New Furniture.

Basically my conclusion's been I need to either buy good stuff (unfashionable antiques, occasionally good new stuff—fashionable antiques are out of my price range) or just get Ikea. The whole rest of the low-end market's at least as bad, and usually more expensive. Some of it pretends it's part of some non-existent middle tier of quality and is priced to match, making it the worst possible furniture to buy (oversized overstuffed NFM crap—it's also usually in a tasteless faux-antique style).

I also think people who complain about Ikea's directions haven't assembled much shitty furniture from anywhere other than Ikea. It's all much worse.

[1] Nebraska Furniture Mart, here used as a category.

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

#247

Post by ZeroFries » Tue, Jun 11, 2019, 2:35 PM UTC

TeMPOraL wrote: post #132

QuadrupleA wrote: post #43

Not sure about furniture and clothing, but Joymode sounds interesting - kitchen gadgets, game consoles, VR headsets etc. Things someone might want to try, but could just sit around unused once the initial excitement is over. REI also, for outdoor gear - I've got backpacking stuff that sits in the basement doing nothing most of the year. It's much easier to acquire things than unacquire them - selling on craigslist, c…

> It's much easier to acquire things than unacquire them That's a good point. I wish it was easier. I have a lot of things in my home I'd like to get rid of and which still could be of use to someone else. I'd gladly sell them for a dollar or two each, but at that price point it isn't even worth the time I'm spending writing this HN comment, much less putting it up on an auction, paying the processing fee, and mailin…

> I could give them away for free on one of the local giveaway/exchange groups, but the very thought of getting someone to drive a couple kilometers to pick up a dollar-item makes me cringe - it's a ridiculously anti-environmental practice.

Well, it beats driving a couple kilometers to buy a new widget.

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

#248

Post by openoi » Tue, Jun 11, 2019, 2:36 PM UTC

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…

I wonder to what extent this influences what is known as the "endowment effect" in economics. The particular chair I am sitting in and have for months, is it really a more valuable one because it helps me remember?

Now before we are quick to agree on a 'yes' -- to what extent do memories hold us back? Your teak bookcase for example reminds you of a positive accomplishment, and its loss would untether you, generally speaking not wanting to intrude. Now imagine someone who objectively should change, perhaps because your industry is dying. Too many mementos, a sign of reluctance, resistance even to change?

Yet change, wanted or not, is the one constant in our life.

I realize the article is about renting to save up (-- how's that going to work, btw? After all, someone needs to charge on top of the cost of owning). But a home of one's own like in the last century, really another cradle of identity, or mistaken materialism?

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

#249

Post by lordCarbonFiber » Tue, Jun 11, 2019, 2:38 PM UTC

dsfyu404ed wrote: post #215

lordCarbonFiber wrote: post #192

Earlier quoted context omitted.

>Pick a city where there aren't many jobs, there isn't much to do, and young people aren't interested in moving their and my antiquated ideas about what the housing market should look like hold. FTFY I suspect people, especially people considering buying their first home, have a specific profile of locations that behave in this new way because of that interest.

There are cities up and down the east coast and throughout the Midwest that have plenty of jobs and stuff to do. The only thing they don't have is a freight train full of tech startups barreling out of control down a mountain while VCs shovel more coal into the boiler. Basically just strike SF, NYC, Boston and Seattle of your list. Then strike off every city that lots of people from SF, NYC, Boston and Seattle are ca…

Left with a long list of cities maybe, but not many (any?) population centers. Im sure for small N you can find people that want to live an hour deep from the Baltimore suburbs, but the size of the cities you insist on excluding compared to the population of the US would indicate the majority don't hold that position (if they did you'd be complaining about other mega centers since capital tends to follow people).

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

#250

Post by Bombthecat » Tue, Jun 11, 2019, 2:39 PM UTC

foepys wrote: post #94

ccozan wrote: post #66

Earlier quoted context omitted.

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.

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

Just checked the paragraph,on the site I found they list related laws .. Jesus,it's worse than I thought.its like a stack of cards.it can happen if you touch one thing,you are forced to renew other things...