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My thoughts on renting versus buying

milesbarr.me

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Re: My thoughts on renting versus buying

#231

Post by shoo »

Panzer04 wrote: post #222
shoo wrote: post #174

Earlier quoted context omitted.

Interesting. Down here in Australia our economy has been doing OK, we've had a great run of dodging recessions, but due to house prices appreciating so much since the 90s, there's similar problems with house down payments being far out of reach of many people. Recently, our government is making a change to allow first homebuyers to purchase properties with only a 5% deposit. Historically the Australian government set…

There's some pretty poor economists out there, and don't underestimate ethe ability of journalists to find someone conforming to their biases. I think giving the government an interest in keeping house prices high is an awful idea and we should get over this obsession with homeownership.

problem is, politically it is feasible for government to support policy that superficially appears to help home buyers, but also props up housing prices. like all these "give the first home buyers more money / access to loans / reduced stamp duty" policies

a government with an actual serious policy to increase housing supply, which should cause housing prices to fall, might have a lot of trouble getting elected or staying elected (only 1/3 of australian households rent, but that'll increase over time due to wealth inequality)

Re: My thoughts on renting versus buying

#232

Post by simianwords »

bombcar wrote: post #220
simianwords wrote: post #209

Earlier quoted context omitted.

Interesting.. I would never think Condo described the financial relation you had with the house but not some intrinsic quality of the house itself.

Technically it doesn’t (as it means condominium which in theory could be single family homes) but practically it almost always means an “apartment you own” though sometimes “half a duplex” or similar proportions of a quad or six plex style. But in the US it usually implies neighbors above and below and on the sides.

I'm more curious now: what sort of apartment does not have neighbours nearby?

Re: My thoughts on renting versus buying

#233

Post by xyzzy123 »

pton_xd wrote: post #156
bnchrch wrote: post #62

I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…

> Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities. Paying perpetual interest on a non-productive asset doesn't sound like a good idea, to me.

The house is just the security, the thing you got the loan for is the asset (hopefully).

Re: My thoughts on renting versus buying

#234

Post by etrautmann »

cramsession wrote: post #88

> People obsess over granite countertops, open floor plans, stainless steel appliances, and walk in closets. These might make you happy but they don’t make you rich. Money is a means to an end, and being happy is a fine end. I only live once and if I can be happy, well then I've pretty much won. Also you're not going to "get rich" by renting, if (and it's a huge if) you can somehow make renting work in your financial…

That’s absolutely not true. In NYC, I can get rich by investing the difference between a mortgage and my rent, and there’s literally no period over which it makes financial sense to buy. People still buy if coursed but it’s not because it makes them rich (at least in this market with this interest rate).

Re: My thoughts on renting versus buying

#235

Post by necovek »

archagon wrote: post #204

The comments here are making some odd assumptions: 1) That buying implies owning your own top-to-bottom house, with no adjacent neighbors. 2) That renting necessarily comes with arbitrary rent increases and risks of eviction. 3) That mixed communities of buyers and renters are uncommon. None of these is necessarily true if you live in a city, depending on the city. It sounds like a lot of people are actually comparin…

Isn't that also what the OP is doing? They are comparing renters to owners who are usually in a different life situations (with the basic being kids vs no kids).

There are a lot of compounding factors OP is ignoring, likely out of not being in a set of life situations yet.

Thus commenters are bringing counter-exampled to dispute the OP claim, not as the 100% truth either.

Re: My thoughts on renting versus buying

#236

Post by skrlet13 »

I like the stability and peace of not being homeless. I'm glad I have a place to live. I am lucky I don't need to pay rent, or else I'd have to choose between rent or groceries.

When you pay rent you are dependent of a landlord, who has a lot of power over you when you are vulnerable. Being homeless is a cruel situation, and they know it.

Problem is most people can't afford owning a home nowadays. Power imbalances increase even more...

Re: My thoughts on renting versus buying

#237

Post by Marsymars »

litoE wrote: post #230
filoleg wrote: post #64

Earlier quoted context omitted.

> the stability of buying It depends. Personally, after witnessing both sides of the coin second-hand, I am not leaning in the direction of either buying or renting in absolute. It is highly dependent on the context and circumstances of a specific situation/market. I am aware that this is just an anecdote (i.e., it isn't going to say much about the overall state of things across all states in the US), but there is a…

In our condominium building (42 floors) the rule is that every apartment owner is responsible for any damages to their apartment, even if they are caused by an apartment in an upper floor. This is because otherwise the owners of the upper floors would have to have million-dollar insurance premiums to cover the possibility of a leak in their apartment causing damages to multiple floors below. We had an event where a b…

This seems like something where it would make sense for the condo to self-insure with mandatory premiums for everyone, so then everyone pays an equal amount for leaks rather than only those who get unlucky.

Re: My thoughts on renting versus buying

#238

Post by onecommentman »

pedalpete wrote: post #56
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…

As a renter who has recently been given notice that I must vacate my apartment in 90 days, you'd think I'd agree with you. However, I think this depends highly on the personality of the renter/owner, and that is the point this article misses. If someone is, like myself, comfortable with risks, I'm ok with changing neighbors, locations, and I've lived on 3 different continents and 9 cities? If you're someone who crave…

Values stability.

You crave an addictive substance. By choosing the word “crave”, it sounds like you are pathologizing the choice to buy a home, perhaps from a need to validate your personal life choice to rent in spite of facing a forced vacation of your residence. Or perhaps you have financial interests in real estate companies that manage apartments.

Re: My thoughts on renting versus buying

#239

Post by Marsymars »

gruez wrote: post #85
bnchrch wrote: post #62

I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…

>- Fixing your housing costs against inflation: Any sort of serious buy vs rent calculator already takes this into account, for instance the one on nytimes >- Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities. That feels absolutely insane to me, especially when you consider that by the time you built up significant amounts of equity you'll have sig…

> That feels absolutely insane to me, especially when you consider that by the time you built up significant amounts of equity you'll have significant commitments (eg. college age kids) and/or be close to retirement. Going 3x on S&P500 might be justified when you're a new grad, but not beyond your 30s.

I don’t know about the US situation, and while I generally agree with you, home loans (in Canada) are nice for a couple reasons 1) the rate is better than you’ll get anywhere else, so you can significantly cut down on an emergency fund to stay invested (or even savings in general - e.g. you can keep invested in the market to drive your old car until it dies, get a dealer’s best price with their kickback from a bank on a new car, pay off the bank loan with a low-interest HELOC, then pay off the HELOC over the next several months) and 2) the interest on home equity lines of credit is tax deductible if used in various circumstances when you’ve already exhausted your other tax-advantaged options. (Conversely, mortgage interest is not tax deductible here.)

Re: My thoughts on renting versus buying

#240

Post by bluefirebrand »

pton_xd wrote: post #156
bnchrch wrote: post #62

I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…

> Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities. Paying perpetual interest on a non-productive asset doesn't sound like a good idea, to me.

As opposed to paying perpetual rent to someone else and never owning anything?
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