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Renting is Throwing Money Away, Right? (2015)

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Re: Renting is Throwing Money Away, Right? (2015)

#341

Post by Mvandenbergh »

littlestymaar wrote: post #130

> You hold a 5 percent fixed-rate 30-year mortgage Wait, are you Americans paying 5% interest on mortgage, whitout even counting insurance? For real?! Edit: Having looked at other comments in this thread, it looks like interest are taxe-deductible, which makes it more affordable, but that's also really weird: it means the gouvernment subsidizes financial institutions to charge American consumers a lot more than the n…

The US has 30 yr fixed rate mortgages which is only made possible by the presence of government sponsored entities like Fanny Mae and Freddy Mac in the market.

The very low interest rates charged for short fixes that we see in most of the world reflect current low borrowing costs for banks. American interest rates reflect forecast borrowing costs over the length of the loan. That's why they're much higher, they price in the expectation that over the 30 year loan period, base rates will revert back up to historically typical levels.

Re: Renting is Throwing Money Away, Right? (2015)

#342

Post by verylittlemeat »

chaosbutters314 wrote: post #310
chatmasta wrote: post #232

Earlier quoted context omitted.

But with renting there is no reward. EDIT: In addition to mobility cited by a reply to this comment, another advantage is the saved opportunity cost of investment in real estate vs other markets.

I get to live closely with a bunch of cool people and not isolated in some house in a suburb. I think renting has a nice social benefit. Plus, the mobility aspect to just pick up and leave gives me a ton of reassurance. There is also the bonus that someone else has to fix the appliances and do maintanance than me.

I think your point often gets missed in these conversations about rent vs buy.

You have two choices that masquerade as purely economic ones while ignoring the enormous lifestyle differences.

I rent a tiny room in the heart of NYC for the cost of probably a monthly mortgage payment on a nice house in upstate NY. For me there is really no alternative because my entire life revolves around my immediate walkable neighborhood.

The economics of rent vs buy matter but lifestyle and future expectations are too often downplayed in comparison.

Re: Renting is Throwing Money Away, Right? (2015)

#343

Post by rhodysurf »

dagw wrote: post #333
rhodysurf wrote: post #261

Earlier quoted context omitted.

You are missing that the seller pays both his realtor and the buyers realtor

Why does the buyer need their own realtor for just buying a normal house?

They technically dont, but if youre an engineer like me who is working full time, having someone work for you to do all the annoying parts of buying a house for free its a no brainer. If the seller is paying why wouldnt I use one?

Re: Renting is Throwing Money Away, Right? (2015)

#346

Post by enderjs »

chrisabrams wrote: post #18
saosebastiao wrote: post #8

Earlier quoted context omitted.

> As a technologist who is a part-time real estate investor, this article, like many others, fails to take into account the context of the situations that people can face. There are plenty of situations where buying is better than renting, and plenty where renting is better than buying. I think the article very adequately explained exactly what you're talking about. Did you read it all the way through? It's pretty lo…

Sure everyone should take into account their own situation, but assuming that most situation are going to pay the minimum each month...the author's math is very misleading.

Yea....you didn't read the whole article or you misread it. The author literally says what you are saying like 10 times.

Re: Renting is Throwing Money Away, Right? (2015)

#347

Post by scarface74 »

jronsomers wrote: post #339
scarface74 wrote: post #286

Earlier quoted context omitted.

When it comes to making a trade off for convenience vs. cost, I usually choose cost within reason and I also got burned by the real estate meltdown. I was in no hurry to buy. But the rent where we were staying went from $1300 to $1800 within 3 years for a 3 bedroom, 1650 square foot apartment. We were able to buy a house, a brand new build 3000 square feet 5 bed/3.5 bath for $2000/month with only 3.5% down in a neigh…

That is awesome and you are able to buy a house like that, especially a brand new build (to your liking). However, I want to mention it seems you are in the right place at the right time. Your case is an outlier in my opinion and I'm happy you are taking advantage of it. Especially considering that it is in a great school zone. I just felt that this isn't normal, even for the Midwest (which is where i can only imagin…

As far as being an outlier, it's not that our case is just an outlier, so is our house. We had to move further out into the suburbs to get that price. It's not a bad commute.

I'm not endorsing this particular provider. It's just the first one that comes up when you Google "Home Warranty"

https://www.ahs.com/home-warranty/

Average price is around $850.

https://www.homeadvisor.com/cost/inspectors-and-appraisers/p...

When I was a landlord and owned three rental properties they were worth every penny.

Let me emphasize that buying one is statistically not a good deal and it usually makes more sense just to "self insure" and save for repairs. But it is more of a convenience thing.

Re: Renting is Throwing Money Away, Right? (2015)

#349

Post by Spooky23 »

VLM wrote: post #316
hvidgaard wrote: post #148

Earlier quoted context omitted.

What all professionals do, and what all potential home buyers should do, is run the actual numbers of expenses that is purely property taxes, interest, fees, expected maintenance, bills such as heating and electricity, and other related expenses not specifically reducing the amount of debt. That is the price of living in the house - compare that to renting a place. The difference between owning and renting expenses,…

Expected maintenance, LOL. Just saying as an older guy if you're not factoring in HVAC replacements, roof replacements, driveway replacements, appliance replacements, even the expenses of major yard work, you will miss thousands per year on average. I'll see these estimates online where people laughably expect to spend less than $1K/yr on home maint, LOL I spend that much on the roof averaged by year, and I spent mor…

I own a home built in 1927. Maintenance and renovation are similar to the costs of carrying a mutual fund.

I hire out most renovation, but don’t hire gardeners, etc. If you want a hands free lifestyle, that’s awesome but costly.

Re: Renting is Throwing Money Away, Right? (2015)

#350

Post by ShadowFaxSam »

Aaargh20318 wrote: post #269
ShadowFaxSam wrote: post #200

This same principal can be applied to buying or leasing a car. When I first graduated college and had my first "adult" job I wanted to purchase my first car. The general mantra I heard was "Leasing is throwing money away". I ended up financing my first car, (used) thinking I was making the correct financial decision. The problem with someone fresh out of college buying or financing a car is they really have no idea w…

If you're talking about leasing/financing, then I'm assuming you're getting a new car. Why does your first car out of college have to be a new car ? Why not just buy a cheap used car outright ? You can get something that'll last you a couple of years for €1000.

I did buy a used car, just a more recent, nicer model. At the time, I thought I would hold on to this car for years, so I went for a step up in quality as well.

After working low level internships and restaurant jobs, its easy to get a little too ambitious at age 22 when you sign that first contract with an annual salary.

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