Renting To Get Rich (real estate market, foreclose, renter)

[MovingAloha]

This is an interesting article. I'm reading and hearing similar views more and more these days.

New American Dream Is Renting to Get Rich - Yahoo! Finance

[EscapeCalifornia]

But if you buy on a fixed mortgage and pay it off, you get to live cheaply down the road. A lifetime renter will see his monthly living expenses grow every year without end until he dies. How many people still want to be worrying about rent increases when they're retired?

[TrueTimbers]

It was always flawed thinking to buy a home as a money making investment... Sure it worked for some decades and may again in the future. That point I will agree with in the article..

Yes the past few years renting would have been better than owning, also with the need to move around the country for work, renting may be better than owning..

However, even in a flat market $2000 put to a mortgage every month is better than $2000 put to rent...

Maybe the moral of the story should be to not pay a mortgage higher than you would pay for a rent?

Yes renting is a trend, and the real message to me is buy buy buy rental properties and rent them out for a huge profit...

Have the tenants pay off the mortgages for you....

[Wing Feathers]

The article proves that University professors are not infallible.

Rent will go up after 30 years, whereas a mortgage will go to zero.

The article also fails to monetize the stability and quality of life as a home owner. Therein lies a GOLD MINE.

[sacramento916]

Unless you had a wildly successful business, no one got rich by renting.

The last decade was an aberration in the real estate market. Historically, investing in properties created a great deal of wealth. Many average people got incredibly wealthy or at least very comfortable (as in millionaires) by patiently investing.

Putting down money towards a mortgage is almost always better than renting, unless you were in a market that was rapidly depreciating. However, I think the problems with Americans is not that we are buying houses, but rather Americans overspend and do not buy a house and manage a mortgage that is within their means.

[1200RT]

Originally Posted by EscapeCalifornia

But if you buy on a fixed mortgage and pay it off, you get to live cheaply down the road. A lifetime renter will see his monthly living expenses grow every year without end until he dies. How many people still want to be worrying about rent increases when they're retired?

I tend to agree with Escape (as usual). If you're buying for the long term (aka, end of your life), eventually (hopefully around retirement), your home will be paid off and will only require property taxes and normal upkeep. This leaves many many years of "free" living. If renting, as mentioned above, you'll be paying rent for life.

[evergraystate]

What a lot of you fail to think about is the fact that if you ever get sick, out of work for a long time or have some other unexpected expense (cancer in the family?) over the life of the mortgage, your principal in the property is gone.
You think you've got really good health insurance that will cover that possibility in full? Consider it part of your mortage payment.
And lets not for forget how many people still owe more on their mortgage than the house is worth.

I don't think renting makes more sense than buying for everyone all the time. The truth is somewhere in between. This is coming from a home owner and landlord without a mortgage.

[1AngryTaxPayer]

I know some people that bought their homes for 15k, sold for 600k then are renting nice places in their retirement. They are the ones that really made out.

[TrueTimbers]

Originally Posted by evergraystate

What a lot of you fail to think about is the fact that if you ever get sick, out of work for a long time or have some other unexpected expense (cancer in the family?) over the life of the mortgage, your principal in the property is gone.
You think you've got really good health insurance that will cover that possibility in full? Consider it part of your mortage payment.
And lets not for forget how many people still owe more on their mortgage than the house is worth.

I don't think renting makes more sense than buying for everyone all the time. The truth is somewhere in between. This is coming from a home owner and landlord without a mortgage.

This is false, your principle is not gone if you default. Simply if you owe more than you have paid you will not be seeing any money..
Secondly, if you have built up equity in your home you can borrow from that equity in the form of a home equity loan or reverse mortgage, which can help one through an unexpected expense or illness.....

Lets say you owe $10K on a 100K mortgage. You default and foreclose, and say the house sells for $100K.. You will see 90K back the bank just wants it's 10K you defaulted on...




It is disturbing, but if one is deeply underwater owning more than their home is worth, default should be explored... It is something one should consider very carefully first, but may be an option... Let the bank take the hit...

[BayAreaHillbilly]

All the so called rent vs own "advice" is geared toward people who would need to be highly leveraged in order to own.

Bad, bad mentality, it's what started the whole melt down in the first place.