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Most Germans don’t buy their homes, they rent

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Re: Most Germans don’t buy their homes, they rent

#301

Post by EpicEng »

aianus wrote: post #165
criddell wrote: post #160

Earlier quoted context omitted.

> It might be cheaper but only if you don't value your own time or have anything better to do. No way. My family of four eats around $250 of food every week. That works out to $3 per person per meal. The other expenses would have to total more than $600 before we would break even eating fast food every day. The food we make at home is considerably better than fast food, so I think it would cost an extra $1000 to eat…

It takes ten minutes to earn $10 doing software engineering. In no universe am I cooking a better meal in less time.

Except that, in reality, no one is paying you for that 10 minutes. This is a nonsense claim I see thrown around here all of the time. If no one is willing to hand you a check for every spare minute you have then no, your time is absolutely *not" worth that money.

Taking on contract work is a non-trivial time investment. I can't just work for ten minutes whenever I want to pay for takeout, I will have deadlines to meet, which means less time with my family. I've done it, no thanks.

Re: Most Germans don’t buy their homes, they rent

#302

Post by DesiLurker »

cm2187 wrote: post #130
riprowan wrote: post #126

Earlier quoted context omitted.

> There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds). I beg to differ. I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain. Namely, it is very difficult to raise a family of four in a mutual fund. Investing in a home may is absolutely "productive." See, there are sign…

> Namely, it is very difficult to raise a family of four in a mutual fund. It is difficult to ski without skis. But most people don't buy skis, they rent them. Renting skis do not mean that no skis will be manufactured. There is a need for house, houses will be constructed, irrespective of whether people will over-bid on them or not. > A paid off home is a social safety net against homelessness Stocks and savings are…

the other reason would be the whatever you subsidize you just get more of that. So in an market based system prices generally rise until they have balanced out the gains from tax deduction (interest & prop tax).

Also, given the amount of labor force mobility in US now vs 30 years ago it anyways does not makes sense to force people to 'settle down'.

Re: Most Germans don’t buy their homes, they rent

#303

Post by cesarbs »

eloisant wrote: post #217
cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

Well rent doesn't create any wealth either, you're just paying monthly a landlord so he doesn't have to work. If you want to create value, you should make sure that housing prices (both renting and buying) stay low. This way not only wealth can go to other investments, but more people can take the risk to start a business if they don't have the risk to be unable to pay their rent or mortgage.

> paying monthly a landlord so he doesn't have to work.

Try telling that to a landlord. Being one is a job in itself - or you have to pay someone else a good chunk of money to do the work for you.

Re: Most Germans don’t buy their homes, they rent

#304

Post by oldmanjay »

eloisant wrote: post #217
cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

Well rent doesn't create any wealth either, you're just paying monthly a landlord so he doesn't have to work. If you want to create value, you should make sure that housing prices (both renting and buying) stay low. This way not only wealth can go to other investments, but more people can take the risk to start a business if they don't have the risk to be unable to pay their rent or mortgage.

I suppose that it's emotionally satisfying to denigrate people for having something you want, but does it truly make a useful contribution?

Re: Most Germans don’t buy their homes, they rent

#305

Post by k__ »

fuzzy2 wrote: post #41
adrianratnapala wrote: post #17

Can somone explain what the article means by: > Germany also loosened regulation of rental caps sooner than many other countries, Does that mean the amount of rent control was deregulated? I thought the rent control here in Germany was pretty strict -- at least in the sense that the landlord can't increase the rent during an existing tenancy.

Rent can be increased, of course, but only within limits. Limits that the tenant must enforce “manually” by going to court.

I know people who live in a flat for about 20 years now and they don't pay that much more than 20 years ago.

So it seems to work fine

Re: Most Germans don’t buy their homes, they rent

#306

Post by paganel »

nommm-nommm wrote: post #194
riprowan wrote: post #126

Earlier quoted context omitted.

> There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds). I beg to differ. I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain. Namely, it is very difficult to raise a family of four in a mutual fund. Investing in a home may is absolutely "productive." See, there are sign…

>1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles. Even if all of them are unemployed, all of them have a roof over their heads. Until you can't afford to pay the taxes, utilities, insurance, and maintenance. My grandma bought her house outright with my grandpa's life insurance money. No mortgage ever. It was a terrible choice because she didn't have…

> Until you can't afford to pay the taxes, utilities, insurance, and maintenance

The utilities it's what gets to you first. My parents used to be middle-class people in the late-1990s Eastern Europe until they both lost their jobs when the one big steel-factory in my home-town got closed down. In a matter of a just a couple of years they had to sell our family car and our city apartment (where we were all living), because utility bills have the nasty habit of coming in your mail-box even though you're out of a job. We only managed to got through all this because my parents still had a half-finished house in the countryside which has been their primary residence for more than 15 years now (and is still unfinished) while I got to go to college and managed to earn some financial assistance from my school for the first couple of years (and then found a job during school).

I know that the usual HN user comes from an Western country and has never had to deal with very big societal changes that can see political systems disappear over night, high-double-digit or triple-digit inflation or real-estate values collapsing to 5 or 10% of their initial value, but these will eventually happen in there, too.

Re: Most Germans don’t buy their homes, they rent

#307

Post by criddell »

aianus wrote: post #191
Jtsummers wrote: post #169

Earlier quoted context omitted.

If you strictly want to maximize your money , you're probably making the best choice for yourself. For many of us, time with family, friends, hobbies, is a relaxing and physically/mentally/emotionally healthy thing to engage in, rather than trying to exploit every waking hour for income.

So instead of spending time with the family, friends, and hobbies you'd rather slave away in front of a stove to save $600/mo?

In my calculation, it was $600 per week savings for my family of 4. That's $2400 / month.

Re: Most Germans don’t buy their homes, they rent

#308

Post by chilicuil »

yolesaber wrote: post #241
adrianlmm wrote: post #183

The culture is so much different in México, the first thing you do when you start working is to buy a house even if rents are cheap.

What's the average house price tho

It highly depends on the zone, in Mexico City surroundings you could get or build a house for probably USD 100k+, in downtown it could easily be 500k for a full house or 200k for a department flat. It could sound cheap but the average salary is low too, so you can easily be in dept for the next 25-30 years. Many people buy or build outside of the border city and spend 3-4 hours everyday commuting. In general, I think people try really hard (sometimes during its whole life) to buy/build its own but I don't see that happening much longer, specially for young people who start working at an older age and has additional aspirations.

Re: Most Germans don’t buy their homes, they rent

#309

Post by paganel »

zip1234 wrote: post #278
Spooky23 wrote: post #152

Earlier quoted context omitted.

That's a ridiculous position. My ownership of my home provides a lot of active investment activity that wouldn't happen otherwise: Examples: - the local nursery benefits from the plants and growing materials that we buy - investments in home improvements generate contractor man-hours and local material purchases - as an active participant in stakeholder in the community, I contribute to the governance of the communit…

Also, in 99% of rentals I've seen, the landlords put in the bare minimum to keep tenants there and paying high rents. Homeowners tend to spend money on their houses to make them nicer.

I'm now writing this from a rental apartment and it looks quite nice, it's certainly as nice as I would have arranged it had it been my own. Granted, you can't go wrong with Ikea, some nice German white appliances and generally keeping it as simple and functional as possible. I'm also living in Europe.
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