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Of course they’re general. I can’t speak for the entire freaking real estate market.
You can’t give advice based on what a couple unique situations are and bank on that.
Yes buying a house is a great way to build equity. Over the long run you come out ahead.
If you rent you throw your money away for 30 years. That’s not really up for discussion I hope.
The newest premise you is if you’re renting much cheaper than the ownership cost would be, you can invest that extra savings and make your money that way in attempt to catch up. As I’ve illustrated there’s only a handful of places where that’s the case and it’s not even by much (feel free to invest that extra $12 in a 401k and hopefully that will make so much return that your housing cost will be more than paid for throughout retirement. )
There’s no new premise. The only issue over the course of the thread is your inability to understand and follow basic facts
You’ve already been given multiple reasons to carry a rental property at a negative cash flow none less imprortabt than your anticipation of appreciation. It’s not a one off situation
So buying is a great way to build equity and wealth unless you have to sell within the first 5 years? Yeah I’ve already pointed it out multiple times. It’s a downside to owning.
Who voluntarily carries a rental property at a negative cashflow? That’s just stupid. Or are you guys talking extenuating circumstances forcing a negative cashflow rental?
All 6 are exceptions rather than the rule, otherwise you’re simply counting on these very specific circumstances in order to get rent lower than a mortgage. If they were common, nobody would invest in rental markets.
There are apparently just 8 states were the average rent is cheaper than average mortgage payment and in most of those cases it’s not by much. While this list only considers the actual monthly payments, it does not include building equity or appreciation.
Ok, I think maybe we can agree now that at least some of the time, owning doesn't make sense. Even if each of the 6 conditions only happens 2% of the time, that adds up to 12%, which is high enough that everyone should run the numbers for their individual case, rather than making blanket assumptions because they are too lazy to do the math.
Who voluntarily carries a rental property at a negative cashflow? That’s just stupid. Or are you guys talking extenuating circumstances forcing a negative cashflow rental?
See my last 3 comments. It does happen. And it happens often enough that one should do the math before making a decision with a six-figure effect on their finances!
Who voluntarily carries a rental property at a negative cashflow? That’s just stupid. Or are you guys talking extenuating circumstances forcing a negative cashflow rental?
It happens and not by accident or circumstance.. Some buy negative cash flow properties specifically for the appreciation play
This is blatantly false. Plenty of people rent because they don't want to put their money into the housing market wile making costly repairs for their primary residence. Plenty of people in San Francisco and other high cost housing areas did the math where renting makes far more sense.
A solid portion of these people already own single family or commercial real estate and use that income to pay their rent, allowing them to live in a far bigger house they could ever dream of or one they're not comfortable with paying for with debt..
You really think all the rich people out there renting expensive property don't know what they're doing?
Reminds me of a quote from real estate guru Grant Cardone.
“Rent where you live, own where you rent out”.
At the moment, my wife and I rent in a gated community on Florida’s gulf coast. Our plan is to continue to rent for the next 5yrs until we’re financially comfortable enough to buy a condo cash. I cant justify paying 10’s or in some cases 100’s of thousands in mortgage interest. I laugh at those who claim renting is only lining someone else’s pockets. Is that not what mortgage interest is?
You can google anything and get hits. You’ll need more substantial data than just counting Google results.
Sure there are people in situations with negative cash flow, but if that were the norm nobody would rent out their property would they?
Were you not aware of the "negative cash flow" conditions that were all too common during and after the 2008 financial crisis?
The argument to rent vs. own is silly in the extreme.
No one buys a home simply for the $$ or tax benefits alone, which are fast approaching zero anyway.
People don't rent solely to save money to invest, which is not, nor has it ever been, the only way to wealth.
Ziggy makes some good points, but they come from a very limited viewpoint and narrow experience.
They will not fit the vast majority of Americans who don't live in the inexpensive south.
LowExpectations has a very solid overall understanding of the complexity of this issue, tax and otherwise, but he is waging a battle against those who cannot grasp wider perspectives nor individual situations.
To such folks, 'My way worked for me, so it should work for everyone' is all they can muster.
For the record, I rented for 20 years while I worked as a consultant, saved, and invested.
I purchased a small condo in an inflated market and sold it twenty years later for $10k less.
I bought a villa home in SoFla for cash with the proceeds, which has doubled in value since 2010.
I bought a 2016 Lexus RC 350 in 2016 .. for cash.
I do not itemize.
I am very financially secure and happy as a pig in $Hit.
YMMV
Who voluntarily carries a rental property at a negative cashflow? That’s just stupid. Or are you guys talking extenuating circumstances forcing a negative cashflow rental?
Many people do. Often the case is the person is building equity at a greater rate than the negative cash flow.
Quote:
Originally Posted by louie0406
Reminds me of a quote from real estate guru Grant Cardone.
“Rent where you live, own where you rent out”.
At the moment, my wife and I rent in a gated community on Florida’s gulf coast. Our plan is to continue to rent for the next 5yrs until we’re financially comfortable enough to buy a condo cash. I cant justify paying 10’s or in some cases 100’s of thousands in mortgage interest. I laugh at those who claim renting is only lining someone else’s pockets. Is that not what mortgage interest is?
You could have just purchased, paid the time you rent now and the five years you plan to rent, then paid off the balance; the years you would have been paying instead of renting would have gone towards the home you purchased, instead of just into the endless hole of renting.
Also, property prices in a lot of Florida have been rising, so if you would have purchased in the first place, your property most likely would have increased in value, and continue to do so, provided you bought in any area with at least a sliver of desirability.
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