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My thoughts on renting versus buying

milesbarr.me

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Re: My thoughts on renting versus buying

#161

Post by ndriscoll »

al_borland wrote: post #140
ndriscoll wrote: post #113

Earlier quoted context omitted.

I wouldn't want to purely out of the waste, but from a risk perspective, why not? Your other costs don't scale with housing or income, so if you're spending $70k on housing, you might be at $100k overall expenses. Add another $50k for income taxes and $50k for retirement savings and you're still at 50-100k left over for whatever you like (using 250-300 household income). 6k for a mortgage would be scary in case of jo…

The lease terms would be important. Not all leases let you out whenever you want. Plus, if a sizable portion of that household income is in the form of stock or a bonus, that isn’t showing up each month in the paycheck, lowering the monthly cash flow. If there is a layoff early in the year before the bonus pays out, and you can’t exit the lease, that would be a bad spot to be in. There is still risk on the table, dep…

With the numbers I had it only takes 1-2 years to save 1 year of runway, so just do that first (presumably you've had a chance to save before getting your 250-300k income anyway). I suppose that the type of people to spend 6k on rent probably aren't saving much, but they could if that were their goal for some reason.

Re: My thoughts on renting versus buying

#162

Post by latchkey »

yrcyrc wrote: post #32

Being 47 and still renting I think the piece missed a big issue, which is most prevalent these days: we cannot afford to buy. Anything. Anywhere. I reckon I’m fatally doomed to renting.

I travel around the US and Canada in my campervan and I've noticed that it feels like a lot more people live in RV's now, which enables you to buy something and park it nearly anywhere (location wise) that you can find space. There are RV parks all over. Depending on where you decide to be, it probably isn't a bad solution and worth considering if you do want to own something, but don't want or can't commit to a whole house.

Re: My thoughts on renting versus buying

#163

Post by carlosjobim »

moooo99 wrote: post #49

First of all, I fundamentally disagree on the notion that buying a home should be considered an investment (I would go as far as to argue that this attitude is part of the reason the real estate markets are so broken in many places of the world). I don't want to be rich and I don't need to be - I just want a place where my kids some day can grow up, where I can enjoy the sun in the garden and invite family and friend…

> I just want a place where my kids some day can grow up, where I can enjoy the sun in the garden and invite family and friends over to spend a nice evening.

This quote makes real estate "investors", banks and the government tax revenue service drool over how hard you would work to guarantee your children's future. You're up against soulless, calculating cowards who are more than willing to live themselves in misery for the chance to suck your blood.

Re: My thoughts on renting versus buying

#164

Post by zeroq »

malshe wrote: post #152
zeroq wrote: post #79

Counterpoint: buying is always better, people just can't afford it. Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. But after you pay your mortgage you still have an asset in your hand. You can pass it on to your children or you can sell it when you're old, downsize (or even rent) and get some cash for your ret…

> Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. When you own, the mortgage payment is the floor on your monthly cash outlay. by contrast, when you rent, the rent is the ceiling on your monthly cash outlay. So even when they are identical, homeownership is way costlier because of all the other costs one "forge…

As a renter I don't pay property tax, but I do pay maintancene, insurance, utility bills and whatever else can easily attached to the monthly bill. The rest is baked into the cost.

Re: My thoughts on renting versus buying

#165

Post by malshe »

bluefirebrand wrote: post #157
malshe wrote: post #152

Earlier quoted context omitted.

> Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. When you own, the mortgage payment is the floor on your monthly cash outlay. by contrast, when you rent, the rent is the ceiling on your monthly cash outlay. So even when they are identical, homeownership is way costlier because of all the other costs one "forge…

> As a renter, you don't have to consider any of these beyond your rent. As a renter, all of these are baked into your rent :/

Not ALL. Besides, apartment management operates on a different scale altogether. Individual homeowners will never be able to match that.

Re: My thoughts on renting versus buying

#166

Post by malshe »

zeroq wrote: post #164
malshe wrote: post #152

Earlier quoted context omitted.

> Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. When you own, the mortgage payment is the floor on your monthly cash outlay. by contrast, when you rent, the rent is the ceiling on your monthly cash outlay. So even when they are identical, homeownership is way costlier because of all the other costs one "forge…

As a renter I don't pay property tax, but I do pay maintancene, insurance, utility bills and whatever else can easily attached to the monthly bill. The rest is baked into the cost.

It is baked into the cost and you know it up front. That's the ceiling I am talking about.

Re: My thoughts on renting versus buying

#167

Post by xboxnolifes »

zeroq wrote: post #79

Counterpoint: buying is always better, people just can't afford it. Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. But after you pay your mortgage you still have an asset in your hand. You can pass it on to your children or you can sell it when you're old, downsize (or even rent) and get some cash for your ret…

It's not just being able to afford it. It's also how easy can you sell it. Basically, how liquid is the house, and how many expenses are there on the transaction, impacts how much it's worth to buy.

My thought experiment is basically: If I get a new job in a new city, is it smart buy a house right away? And if the answer is not always "yes", then obviously buying is not always the best option.

Re: My thoughts on renting versus buying

#168

Post by davewritescode »

kibwen wrote: post #15

> The Flexibility of Renting Is Undervalued And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle rather than as a basic necessity. And it's not just a necessity because it shelters you from the elements and gives you storage for your stuff; it anchors you in a neighborhood and allows you to begin forming a local community. The flexibility of renting that t…

I don’t think renting or buying makes a difference in communities. I had a much better relationship with my neighbors when I rented vs now where I own my own home.

I chalk up the difference to the fact that a lot of people my age couldn’t afford to live where I moved so my neighborhood is full of wealthier older people who I have nothing in common with.

Re: My thoughts on renting versus buying

#170

Post by crooked-v »

klipt wrote: post #145
estimator7292 wrote: post #109

Earlier quoted context omitted.

When renting a 1br costs as much as my mortgage on a 3br, I don't think that really tracks.

Depends where you live though. In the SF Bay Area, buying requires a monthly payment several times larger than the rent for an equivalent place.

The Bay Area market is a bizarre one because of how Prop 13 and extremely thorough renter protections lead to perverse incentives for everyone.
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