661–670 of 901 posts
You will own nothing and be happy.
Earlier quoted context omitted.
Usually when you're renting you're not in a detached dwelling, which is more expensive. On a per-unit basis, it's a lot cheaper for the landlord to maintain your unit than it is for you to maintain a separate house. Renting a house just makes no sense, IMO, unless you have a family and you know you're going to be moving soon. Also, rents don't increase just because you have extra money. People take the cost of living…
Where I live, people do indeed rent houses in large numbers. This is typically not because they wouldn't prefer to buy - it is because they can't afford to. This would describe such a large number of people globally that I'm shocked you aren't aware of this. 'Rents don't increase just because you have extra money'. Could you elaborate? Also, I said if everyone has more money, rent increases
Earlier quoted context omitted.
Depends where you live. In the midwest you might legitimately need to mow 3x a week and you might have a huge lot. If you say screw it and let it go to knee high weeds, city might show up and cut your grass and fine you for it.
Buy a house without grass :)
I just pay someone $50/week to mow my lawn and I pay zero attention to it. If we have a mini-drought and the grass turns brown, oh well.
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Renting gives you a giant pile of additional money you can save and invest so that after 30 years you could buy a house in cash if you wanted to. The person with the house does not have this cash, they have a house instead. After 30 years you either have a house or enough cash to buy that house. In many cases, the rate of return on the cash is sufficiently greater that it is significantly more than the value of that…
Eh, not really? If you have money to invest after rent, you’ll also have money to invest after mortgage payments.
Beyond the financials, the psychological impact of both being able to make greater-than-superficial changes, and having extremely predictable payments for years without worrying about substantial rent increases, is substantial. I redid/improved the bathroom to exactly what I wanted. I renovated the kitchen. I added paneling to the walls. I added a few outlets to rooms that needed more. I wouldn't do these things in a…
There’s also a psychological benefit of not having to worry about most problems. Sink broke? Call landlord to fix. Roof leaking? Call landlord to fix. And so on. You never have an unexpected $20k repair show up. And while I agree that it’s nice to customize things to your preferences, this has a downside in that it’s easy to get carried away and overspend. Might as well get the nicer finishes when you are remodeling,…
Hah. Or you get letters from the water utility about a suspected leak, you call the PM the landlord contracts with and (great blame diffusion) they "refuse" to authorize a plumber to come look, in just the right way so you can't take it into your own hands for months, meanwhile you're getting calls, not just letters now, and your water bill is $800/month that you still have to pay, but because the home still has water flowing to it it's not considered a habitability "must remediate" issue. Dealt with that one for months.
Or "appliances as-is". Dishwasher breaks. "As is, remember?" You pull out the broken dishwasher, install your own and then have to fight for your deposit back in small claims because the landlord withheld it because in his eyes "the home came with a dishwasher when you started the lease, it needs a dishwasher at the end of the lease" and somehow "as-is" means, to him, "tenant shall repair and replace".
Or when a shitty (hah) weird hybrid septic system fails (home goes to septic, but then to city sewer) and the owners have to pay $15K to fix it, they start denying and stalling on everything after that point because "we just HAD to pay thousands of dollars FOR YOU".
But sure, "call landlord to fix". "Never have to worry about most problems".
On the other side of the bet are the financial institutions, which will get continued income (as long as you pay) and will own the asset the moment you can't pay.
It is a win-win for one side of this bet. If home ownership was actually profitable, the super rich would have setup all kinds of structures to completely own all housing. The funny thing is the bank does not have the money, they create it out of nothing based on your ability to pay[2]! Extracting rent from money which they don't have. You either rent a home or rent the money (very few buy outright with cash). Bank can rent the money they don't have, as long as you show income + credit history. This is why Warren Buffet owns (some part) Wells Fargo, not homes.
[1] lifestyle = (mortgage + property taxes + insurance + repairs + maintenance) + health insurance + child support
[2] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
Home ownership is a 30-year bet that you will have continued income to sustain the lifestyle[1] . It is extremely unlikely anyone will have a 30 year home run, without job loss, divorce, bad health and any number of life events. Most people would be considered super lucky to have a decade of good run. On the other side of the bet are the financial institutions, which will get continued income (as long as you pay) and…
Don’t get a loan til you can save 20% for a down payment and then, never get more than at 15 year mortgage.
Good advice on both counts.
Once you have 20% down you get out of paying PMI (private mortgage insurance) and you can open a an equity line (HELOC) for about 80% of the equity in the house. It’s typically like a super low interest credit card that you can tap for emergencies. I didn’t have an income for 6 months once and had to live on it.
The 15 year is critical. Do the math on a 30 year mortgage and you pay almost nothing toward the principle for a slightly lower payment for the first 10 years.
Earlier quoted context omitted.
Where I live, people do indeed rent houses in large numbers. This is typically not because they wouldn't prefer to buy - it is because they can't afford to. This would describe such a large number of people globally that I'm shocked you aren't aware of this. 'Rents don't increase just because you have extra money'. Could you elaborate? Also, I said if everyone has more money, rent increases
Absent government interference, rent is based on supply and demand. Why would you spend extra on a place even if you had the money?
But this is pointless abstraction really. If a magic fairy started putting 100 USD in the pocket of every renter each week, what do you think would happen to rent? Would the landowners be obliged to sell them land/houses at the current market rate? Or could the landowners simply refuse to sell and instead ask for higher rents?
As another thought experiment, imagine a law passes so that every renter is forced to eat soylent green and can't get a wasteful car loan or a netflix subscription. Every renter is now 100 USD a week better off (against their will). What happens to rents? Have the supply or demand curves changed?