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Owning nothing is now a luxury, thanks to a number of subscription startups

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Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#111

Post by gambiting »

xivzgrev wrote: post #108
dingaling wrote: post #101

Earlier quoted context omitted.

> Finally, one can use the savings from paying rent What savings? Rent as you stated already includes anticipated maintenance costs, property taxes, the landlord's mortgage costs, often an agency fee, plus a margin for the landlord. I don't think I've seen rental rates ever cheaper than a personal mortgage. The main advantage of renting is avoiding long-term commitment but you'll pay a premium for that flexibility. O…

No? In San Francisco median rent is much lower than equivalent monthly cost would be on median home. You are correct that rent includes all the costs plus markup. But a big factor is that housing costs (esp in california) remain pretty steady once you buy. So that rent does include the housing cost...from 10, 20, x years ago. Alternatively a developer builds a building and rents out the unit instead of marking up and…

Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#112

Post by adrianN »

Bombthecat wrote: post #100
adrianN wrote: post #77

Earlier quoted context omitted.

I wish such laws existed in Germany, but I never heard of them. It's still legal to build new houses that depend on fossil fuel for heating and are poorly insulated, even though we need to become carbon neutral in the next fifteen to twenty years if we want to stay below 2° of warming. The Denkmalschutzbehörde can still prevent you from upgrading your windows and adding insulation to your home.

Never heard about the payment for streets in front of your house for example?

That seems to be a form of property tax and very different from insulating your house.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#113

Post by pluma »

drivingmenuts wrote: post #36

This doesn’t sound like the worst idea ever. If you lose your income, just say “come and get it” and you’ve significantly lowered the cost of moving/finding storage, etc. while you search for a new job. I kinda wish I’d thought of this before a couple of bad years of the Universe deciding it didn’t much like me much. I’m sort of back on my feet (employed) but I don’t own much more than some minimal furniture, clothes…

Sure, I mean if you're unemployed, what's the use for furniture or a bed? And it's inconceivable that you might remain unemployed for any extended duration or not have savings (or sufficiently affluent relatives) to fall back on.

Pardon the sarcasm but I sincerely doubt you know what you're talking about if your biggest worry was moving/storing/selling your furniture.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#114

Post by Barrin92 »

TeMPOraL wrote: post #109
Barrin92 wrote: post #107

Earlier quoted context omitted.

The point of the exercise is to invest the money you didn't pay into something that earns you money. If you put the 1950 bucks you didn't spend into stock, you're making money. And in case of damages and repairs, if you own the sofa, you're always sitting on the damages. Homeowners for example routinely spend thousands of dollars per year on their houses, whereas renters (generally), have repairs covered by the landl…

As a regular middle-class person, how do you put $1950 in stock to make more than $400 in 5 years risk-free and time/effort-free?

index funds, they've averaged about 7-8% over the last 20 years and cost you basically nothing.

mind you renting your toothbrush probably isn't worth it, but if you're thinking about spending thousands of dollars and compare that to the compound interest you earn in a passive fund over a few years, you'd be surprised how much you lose out on.

In fact that's one of the drivers between middle class and upper class inequality. The upper class invests primarily in capital.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#115

Post by tomatocracy »

JMTQp8lwXL wrote: post #69
apatters wrote: post #58

Earlier quoted context omitted.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

In an efficient market, shouldn't the cost to own and cost to rent be roughly the same? Otherwise, everyone would rush to the clearly cheaper option.

Depends how much risk you are transferring onto the asset owner when renting. At a minimum they are taking risk on the useful life of the asset - they might also be taking risk on maintenance costs etc. An asset owner will want to be compensated for taking that risk (over and above expecting to break even on average ie in the form of a margin) whereas if you take the risk yourself as an owner then that doesn’t factor into your cash costs.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#116

Post by oarsinsync »

gambiting wrote: post #111
xivzgrev wrote: post #108

Earlier quoted context omitted.

No? In San Francisco median rent is much lower than equivalent monthly cost would be on median home. You are correct that rent includes all the costs plus markup. But a big factor is that housing costs (esp in california) remain pretty steady once you buy. So that rent does include the housing cost...from 10, 20, x years ago. Alternatively a developer builds a building and rents out the unit instead of marking up and…

Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.

London's also a bit of an odd one in that regard. You either need half a million+ for a shoebox or to live way out of town, and run the risk that the foreign-investment-fueled housing bubble collapses off the back of Brexit, leaving you with more mortgage than equity.

(This is why I'm still renting...)

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#117

Post by gabrielhoch »

gambiting wrote: post #111
xivzgrev wrote: post #108

Earlier quoted context omitted.

No? In San Francisco median rent is much lower than equivalent monthly cost would be on median home. You are correct that rent includes all the costs plus markup. But a big factor is that housing costs (esp in california) remain pretty steady once you buy. So that rent does include the housing cost...from 10, 20, x years ago. Alternatively a developer builds a building and rents out the unit instead of marking up and…

Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.

London is similar to SF, as an example I rent a relatively nice 2-bed flat for £1850/m, but after looking at what it would cost me to buy my mortgage would be at least in the region of £2500 + the maintenance fee from the building + repairs which I don't have to pay for as a renter.

This pattern is really common in high cost of living cities.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#118

Post by TeMPOraL »

oarsinsync wrote: post #116
gambiting wrote: post #111

Earlier quoted context omitted.

Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.

London's also a bit of an odd one in that regard. You either need half a million+ for a shoebox or to live way out of town, and run the risk that the foreign-investment-fueled housing bubble collapses off the back of Brexit, leaving you with more mortgage than equity. (This is why I'm still renting...)

At this point one has to wonder, who's making money off Brexit situation still being unresolved...

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#119

Post by dagw »

dingaling wrote: post #101
chrisco255 wrote: post #26

Renting an apartment vs owning a house is not necessarily a bad financial move. Depends on a number of factors. For instance, if you anticipate moving within a certain time frame, between closing costs, mortgage fees, commission, etc...it can cost more to own in the first 3-5 years, especially if prices are stagnant. Also, there are hidden costs of home ownership not necessarily factored in for, like repairs, mainten…

> Finally, one can use the savings from paying rent What savings? Rent as you stated already includes anticipated maintenance costs, property taxes, the landlord's mortgage costs, often an agency fee, plus a margin for the landlord. I don't think I've seen rental rates ever cheaper than a personal mortgage. The main advantage of renting is avoiding long-term commitment but you'll pay a premium for that flexibility. O…

I don't know what it's like in the US, but in Sweden you can get a much better deal on your mortgage if you only have to borrow 80% of the cost of the house than if you have to borrow 95+%, even when borrowing the same amount. If you have a good job and can afford $1500/month but don't have any savings to use as a down payment on a house you're not going to able to get as nice a place buying as you will renting.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#120

Post by Izkata »

Retra wrote: post #45
dawhizkid wrote: post #38

Earlier quoted context omitted.

How did you come to that conclusion? The effect is the complete opposite...instead of a lot of people that move frequently (i.e. younger people) and buy/toss a lot of cheap Ikea furniture every year, you rent high end, long-lasting furniture that is delivered/removed for reuse.

When I moved frequently I bought an inflatable bed or cot. I didn't buy a king sized bed and throw it out every two years. That's insane.

> and throw it out every two years.

Um, they're not throwing it out. Someone else uses it afterwards.

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