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The carpetbagger’s guide to home ownership

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Re: The carpetbagger’s guide to home ownership

#11

Post by endisneigh »

I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms.

Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deductible, the rent itself allows you do pay down your principle faster, and most importantly you were going to live there anyway so your opportunity cost is 0.

Re: The carpetbagger’s guide to home ownership

#12

Post by seibelj »

HarryHirsch wrote: post #7
refurb wrote: post #6

Earlier quoted context omitted.

This is not a wealthy SF landlord story, this is an house cleaner . It’s an impressive story of someone slowly building up a real estate portfolio in the Bay Area. Most of it through creative means and living lean. It’s actually an impressive story.

It's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population. Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q Pittsfield. I…

Another way to look at it is that there is absurd amounts of empty land throughout the country. Places were undesirable and cheap, and people of moderate means bought them, improved the area, and over decades it became a desirable area.

Young people need to go to shitty places that are cheap and then make the place better. Many young people want to live in SF or NYC. Go to Detroit instead.

Re: The carpetbagger’s guide to home ownership

#13

Post by chmod600 »

stareblinkstare wrote: post #4

Why does this read like a penance?

A lot of people place misdirected blame for unaffordable housing on themselves or others who buy, fix up, and rent out houses.

It's pretty obvious that the cause of unaffordable housing is elsewhere. But being the one to actually collect rent is a kind of guilt-by-association.

Re: The carpetbagger’s guide to home ownership

#14

Post by alphabettsy »

rekabis wrote: post #10
fideloper wrote: post #5

> 5) You don’t need as much house as you’ve been lead to believe. Instead of trading up for a larger fancier house with more debt as you age, consider living simply and buying additional homes for diversified income. IMO (in the process of doing this myself), this is the most important point

> 5) You don’t need as much house as you’ve been lead to believe. For living arrangements, you are mostly correct. I can exist very comfortably in about 1,000ft². Heck, even 800ft² would be comfy and cosy. My problem involves my hobbies and domestic activities: I need a 200ft² cool room for the enormous amounts of fruits and vegetables I harvest every year, canning all that shit needs a 150ft² summer kitchen so I don…

Many of the needs seem like wants and then it just depends on how much you these things are worth to you.

Re: The carpetbagger’s guide to home ownership

#15

Post by gruez »

endisneigh wrote: post #11

I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms. Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deduct…

>your opportunity cost is 0.

not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.

Re: The carpetbagger’s guide to home ownership

#16

Post by endisneigh »

gruez wrote: post #15
endisneigh wrote: post #11

I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms. Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deduct…

>your opportunity cost is 0. not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.

> not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.

I disagree - if you're talking about bubbles collapsing that's true no matter how you store your money, e.g. inflation ruining savings, stock market correction, etc.

You need a place to live anyway and government incentives will reduce your cost of living far below renting anyway.

What is true is that you drastically reduce your liquidity but I already presumed that in the scenario anyway by saying staying a few years (any housing correction historically will be resolved in a few years), if applicable

Re: The carpetbagger’s guide to home ownership

#17

Post by lmm »

seibelj wrote: post #12
HarryHirsch wrote: post #7

Earlier quoted context omitted.

It's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population. Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q Pittsfield. I…

Another way to look at it is that there is absurd amounts of empty land throughout the country. Places were undesirable and cheap, and people of moderate means bought them, improved the area, and over decades it became a desirable area. Young people need to go to shitty places that are cheap and then make the place better. Many young people want to live in SF or NYC. Go to Detroit instead.

> Places were undesirable and cheap, and people of moderate means bought them, improved the area, and over decades it became a desirable area.

Generally by doing things that are now illegal (sometimes that were already illegal but not enforced at the time).

Re: The carpetbagger’s guide to home ownership

#18

Post by HarryHirsch »

refurb wrote: post #9
HarryHirsch wrote: post #7

Earlier quoted context omitted.

It's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population. Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q Pittsfield. I…

I mean, ok? That doesn't change the point this house cleaner was able to get creative and a bunch of property.

He did that on the backs of those trying to get into the housing market now.

Re: The carpetbagger’s guide to home ownership

#19

Post by hackerfromthefu »

endisneigh wrote: post #11

I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms. Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deduct…

There can be massive opportunity cost lost to dealing with the various interpersonal interaction (ie work) thats required to rent a room in a house you are personally living in. If you're making a good salary, thats probably not worth it.

Re: The carpetbagger’s guide to home ownership

#20

Post by endisneigh »

HarryHirsch wrote: post #7
refurb wrote: post #6

Earlier quoted context omitted.

This is not a wealthy SF landlord story, this is an house cleaner . It’s an impressive story of someone slowly building up a real estate portfolio in the Bay Area. Most of it through creative means and living lean. It’s actually an impressive story.

It's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population. Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q Pittsfield. I…

I'm not sure why people have this silly take. Land in desirable areas is scarce. Why shouldn't it appreciate it? Housing is nothing like a car.
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