Why the New American Real Estate Dream Is Renting

Never rent unless in a precarious situation or if just recently moved to a new city. Buy as soon as you can. You will never ever see a penny of what you paid for in rent.

If you buy, even if temporary, you get all your money back, sometimes more, sometimes less, but you always get some.

I lived most of my early adult life renting and I can tell you this, more than $100K wasted and no way at all to get one cent back.

Mathematical identity:

    price to own = price to rent + speculative ownership premium + transaction costs

If you rent, you get to keep that speculative ownership premium and the transaction costs.

An additional problem with owning is that your investments are bound to your living situation. Orthogonality is good. I can change my living situation without even thinking about my investments.

Dumb article! Homeownership is dead because you could be foreclosed upon? This is news?

I bought my first house in the city about 12 years ago. First thing I did was paint one bedroom wall cobalt blue cause I loved that color. Lawns are a pain in the ass to take care of (and I don't much care for monocultures anyway), so I began ripping up the lawn in the back and planting veggies, strawberries, raspberries and prairie wildflowers that can take care of themselves. Added a computer room in the unfinished basement.

Sold that house after 5 years and move to the suburbs (bad idea!). I like to cook, so the second house had its kitchen ripped out and replaced with real slate floor tiles, nice countertops and custom cabinets within 2 months of moving in. Built a metal-casting setup behind the house. Bought house #3 way out in the country and rented out house #2 for 2 years then sold it.

Hope to stay in house #3 until economy improves. I have 10 acres to play in and a small machine shop in the basement. We have horses, chickens, large vegetable garden, maybe goats or cows someday and can do whatever we feel like with the property -- like the outdoor clay oven I haven't finished. Next summer I think I'm digging a goldfish pond/water garden.

Try doing any of that with a rental! Not everyone buys to flip or to sell at a profit. Most of us just want a place to live in that we can hack to suit our current mood.

"People who rent talk about the books that they've read, the trips that they've taken, the skills that they are learning, the friends whose company they are enjoying. Property owners complain about the local politicians, the high rate of property tax, the difficulty of finding competent tradespeople, the high value of their own (very likely crummy) house or condo, and what kinds of furniture and kitchen appliances they are contemplating buying. Property owners are boring. The most boring parts of a property owner's personality are those which relate to his or her ownership of real estate."

http://philip.greenspun.com/materialism/early-retirement/whe...

another disadvantage for homeowner:

in unstable countries, the new government that replace its old one will try to steal the land from owners

if the new gov is democratic, it only honors those who can show certificate on ownership (even the ones granted from old foreign govt -- the countries that gain independence from colonial in ww2 show this trend)

if the new gov is communist, it will simply take the land (worse, the big owners will be labeled capitalist and shot to dead -- happened in china, see the movie 'to live' by zhang yi mou for ref)

those are best and worst case, of course, america is far too remote from civil war or foreign invasion

the renters can just walk away; however, the old money will be of no value ... so it's better to diversify to foreign currencies or precious metal ... or tools

my grandparents actually buried a minivan when the japanese invaded us. once the new govt is set, they resumed the transportation business. it could be more optimal than currencies/metal because ... after a war, the survivor is the only pioneer, no competition -- sufficiently a monopoly by event