Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is It Better to Rent or Buy?

nytimes.com

Post reply on HN
Print view View original

201–210 of 256 posts

Re: Is It Better to Rent or Buy?

#201

Post by dragonwriter »

ebbv wrote: post #199
kenrikm wrote: post #135

Earlier quoted context omitted.

I used it to calculate if buying my house was a better deal than renting. Turns out over 30 years it was exactly the same.. down to the dollar.

Yeah it was the same for me and that made me raise an eyebrow. At the end of 30 years I will own my home. At the end of 30 years of renting I'd be in the exact same boat I'd be in day 1 renting. The calculator makes a major assumption that if you rent you take your down payment money and invest it. Obviously the investment will be worth a lot after 30 years of interest. But this assumption is based on the false premi…

> In reality, people don't usually save up a down payment until they've already decided to buy. So it's a false comparison.

Even given the first sentence is true, its not a false comparison, given the assumption the reason that people don't save up the money (or just invest it gradually, same thing) is that they have something more valuable than investing to do with the money (i.e., that the decision not to do so unless they are planning to buy a house is rational). If so, the investment value is the correct lower bound on useful use of the money to compare a home purchase to, because what they'd actually do is something else that has greater expected utility (even if that utility isn't in the form of a cash payout in the future.)

Re: Is It Better to Rent or Buy?

#202

Post by [deleted] »

vijucat wrote: post #177
IgorPartola wrote: post #140

Earlier quoted context omitted.

Including the fact that you own the house after the 30 years?

Not sure why you're getting downvoted for this, it's actually a quite relevant point, i.e., the the side-by-side comparison should include the consideration that you get to enjoy rent-free accommodation in the home for a certain number of years (or even generations!) once it's paid for. It gets more complicated when you have to factor in a positive probability for various outlier events such as the house getting bomb…

[deleted]

Re: Is It Better to Rent or Buy?

#204

Post by eevilspock »

vijucat wrote: post #177
IgorPartola wrote: post #140

Earlier quoted context omitted.

Including the fact that you own the house after the 30 years?

Not sure why you're getting downvoted for this, it's actually a quite relevant point, i.e., the the side-by-side comparison should include the consideration that you get to enjoy rent-free accommodation in the home for a certain number of years (or even generations!) once it's paid for. It gets more complicated when you have to factor in a positive probability for various outlier events such as the house getting bomb…

I think it's being downvoted because the calculator does take this scenario into account, but the commenter (and you) seem to have not looked at it very hard. It clearly recommends that you buy instead of rent in the commenter's (and your) scenario:

How Long Do You Plan to Stay: Max this.

Investment Rate of Return: Zero this. Because you seem to assume that the renter isn't investing the downpayment, principle payments and any other net savings and won't be able to trade the proceeds for 100% ownership in the home at the end of what would have been the mortgage period. Or set it to -10% (the max negative the calculator allows) if you assume the renter will squander rather than invest the money, with no commensurate happiness return.

The result with be buying is better than renting unless you can rent that home at an impossibly low price.

Re: Is It Better to Rent or Buy?

#205

Post by bane »

hnnewguy wrote: post #195
bane wrote: post #158

Earlier quoted context omitted.

Why would I sell my house when I can get somebody else to rent it and make my mortgage payments on that house for me? I'll just buy another house at my new location. In the end I'll now own two houses I do whatever I want with and my renter will own nothing.

> In the end I'll now own two houses I do whatever I want with and my renter will own nothing. " Uh, you realize that when you buy a house, you end up paying tens, sometimes hundreds of thousands of dollars in interest beyond the value of the home? That's what the renter owns: money, in his pocket, compounding interest for decades. This is the reason why there's an economic calculation to be made. If you're paying th…

No, my renter is paying that for me. He's within a few percent of my mortgage in most markets (near the beginning of the loan, then as time goes on gets even more advantageous for the owner) so he's not working with some huge nest egg of capital that's making him loads of money. Especially if I just keeping financing at 100%. I can keep buyinbg properties and keep finding renters to pay them off for me as long as I feel like. Read the link I posted elsewhere here, buying is almost always better, even with the renter advantaged with a huge investment best egg to start. This nyt analysis isnt correct.

Re: Is It Better to Rent or Buy?

#206

Post by Spooky23 »

cstejerean wrote: post #148
Spooky23 wrote: post #102

Earlier quoted context omitted.

Unless you're somehow securing multi-year leases, that's a cost that is passing on to you as well. You also need to factor in the value of negative impacts of renting. When you have kids, school selection is driven by location -- and a lease is more ephemeral than a mortgage. You also always need to deal with landlords, who can be good or bad, and often cannot make changes to the property that you would like.

You don't need multi year leases. If anything that would be bad. If I rent and the city I am in goes bankrupt and has to cut public services which in turn affect my quality of life and local property values, I can pick up and move and let the owner of the property deal with the double digit hit on his property value. Meanwhile I can move in to the town next door that doesn't have those problems. The costs are not pas…

That's fine when you're 23. When you have a couple of kids, and chasing the lowest taxes/rents means that you're uprooting them from school and friends, there is a high cost for that.

Ever get to know a military brat? It's a hard life.

Re: Is It Better to Rent or Buy?

#207

Post by MrBuddyCasino »

Don't forget the human factor! Though theory says buying a house is not always the best financial move, on average those people are better of when they're old, because they are forced to live more frugal.

People that rent an apartment or house usually don't have the discipline to live as frugal as buyers are forced to be.

Re: Is It Better to Rent or Buy?

#208

Post by NoMoreNicksLeft »

hnnewguy wrote: post #191
NoMoreNicksLeft wrote: post #87

Earlier quoted context omitted.

> The main problem with owning is illiquidity and associated immobility. If you rent you can quickly down shift if you run into trouble. Where are you getting these lease-free rental units? True, you're less on the hook with a 12 month lease, and the liability is lower than a 30 year mortgage... But this is a very mild difference. That job's not going to wait for you to sell your house or for your lease to end. > If…

> This is a manufactured debate, it's meant to appeal to twentysomethings' bohemian aspirations. The actual "manufactured debate" is the one manufactured by the massive housing complex that tries to tell people that rent is throwing away money and it's always better to buy. Buy now! If you don't like your home, you can always sell it for more, later! This tale has been empowered by the fact that we just went through…

And yet, right now as we speak, they're out there buying up these homes for chump change, paying cash for foreclosed homes gone to auction, and then renting them back to you for what you'd have paid in mortgage, plus extra on top of that to cover expenses.

You'll always be a sharecropper, now that you've been taught to believe that anything else is foolish.

Once I can afford enough to do it, I'll buy another home myself and rent it out to someone like you. And I'll stand there with a sheepish grin while he laughs that he got one over on me, hoping that he never realizes otherwise.

Re: Is It Better to Rent or Buy?

#209

Post by pnut »

anywherenotes wrote: post #68
marknutter wrote: post #9

If you buy, you can do whatever the heck you want to with the house or your yard. That's true freedom and to some people - myself included - worth every penny.

I have a house on a corner. Can't put up a fence because it would block drivers from seeing around the corner. At least that's what contractor told me when I tried getting an estimate.

So plant bushes or bamboo!

Re: Is It Better to Rent or Buy?

#210

Post by GFischer »

nitrogen wrote: post #154
mbostock wrote: post #103

Earlier quoted context omitted.

Definitely. We actually designed something like that, but due to time constraints weren’t able to ship it (yet). One complication is that a reasonable range for a given variable can depend on other variables. But hopefully we’ll figure it out. And thank you!

I'm sure you've seen TangleJS by Bret Victor. Its performance wasn't quite good enough for the way I wanted to use it, but it looks like that level of meta-interactivity is what you're going for. Here's my favorite demo of the concept, discovered here on HN: http://worrydream.com/#!2/LadderOfAbstraction

Wow, that's an impressive site, thanks for sharing.

I think I had seen the one on the future of interaction design, but I hadn't explored the site :) .

Post reply on HN