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Old 12-02-2014, 07:23 AM
 
17,386 posts, read 11,902,357 times
Reputation: 16131

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Quote:
Originally Posted by freemkt View Post
How did you pay for trade school? Heck eating low cost meals is my LIFE not just a temporary cutback. Last month I spent $95.11 on food. I've gone to exactly one movie in the past 30 years and that was on a date. My idea of going out to eat was two double cheeseburgers at Mickey D's ($2.00) when I had to unexpectedly work a double shift. Haven't even done that in five years.
I paid cash for it. I worked full time for almost 2 years, scrimping and saving to do that. I worked full time while attending school, also.

But that was 30 years ago. You know, when we were in the same boat. Except for the fact that you had a college degree and I had to spend another 3 years getting an education. Yet I still managed to buy a home.

Your excuses don't move me at all. You had all the opportunity that I did, and were a man, making your career path even smoother than mine. You took every setback in your life as a reason to justify and excuse your failure. I took every setback in my life as a challenge to be overcome.
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Old 12-02-2014, 07:27 AM
 
17,386 posts, read 11,902,357 times
Reputation: 16131
Quote:
Originally Posted by freemkt View Post
Millions cannot become homeowners in an unfree market where a person who cannot buy X is prohibited from buying 0.5X. (Imagine if you could buy milk only in gallons and not in quarts of if you could buy 25 watt incandescent bulbs but not 100 watt incandescent bulbs. Oh wait...)

And yes it's $250K for a single person but the vast majority of homeowners are married.
Your milk analogy is flawed. Costco sells milk only in gallons (packs of 2, usually). If you want quarts, you have to go to your local supermarket or convenience store.

You're saying you want to force Costco to sell milk in smaller quantities. That will result in higher prices on milk. If you want smaller containers, you have to go where they are sold. Same with a home. There are plenty of places where there ARE small lots. But you don't want the hassle of having to move or live there.
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Old 12-02-2014, 07:34 AM
 
Location: Florida
4,103 posts, read 5,396,586 times
Reputation: 10105
Quote:
Originally Posted by ringwise View Post
Your milk analogy is flawed. Costco sells milk only in gallons (packs of 2, usually). If you want quarts, you have to go to your local supermarket or convenience store.

You're saying you want to force Costco to sell milk in smaller quantities. That will result in higher prices on milk. If you want smaller containers, you have to go where they are sold. Same with a home. There are plenty of places where there ARE small lots. But you don't want the hassle of having to move or live there.
I can kinda relate to their point. In my area housing is either a 250k, 2500 square foot home, or a small house in a rough area. Most of the affordable houses go to the lower income bracket who in my area commit a great deal of crime. Number 1 in the State in crime! Woop woop!! Anyways you CANT buy a smaller home in a nicer area here because that simply doesn't exist.
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Old 12-02-2014, 08:22 AM
 
18,488 posts, read 15,453,055 times
Reputation: 16144
Quote:
Originally Posted by freemkt View Post
Ah but the 'savings' you enjoy from renting is merely ephemeral. When you buy with a fixed-rate mortgage your P&I monthy payment remains constant. When you rent, your monthly rent payment is pretty much guaranteed to skyrocket over time.
Rent is not going up (on average). The Fed may be diluting our currency, but rent stays the same. Don't confuse inflation with a genuine reduction in affordability. It may take more dollars to pay it, but it is not more expensive.

Fiat currencies have no value apart from purchasing power.

Quote:
Originally Posted by freemkt View Post
(Not to mention that unlike mortgage payments, rent payments never ever ever go away.) Within a few years your monthly rent payment is usually much greater than what you would be paying if you had bought.
This is a common misconception that is based on ignoring opportunity cost of equity, opportunity cost of the owner's time, and taxes/insurance/maintenance/repair cost.

Quote:
Originally Posted by freemkt View Post
And of course, in California, you are literally at the mercy of your lanndlord when it comes to Prop 13 property tax protections. On average, rental properties are sold (and thus reassessed) more often than owner-occupied homes, with the result that on average, rental property has higher property taxes than equivalent owner-occupied property.
As long as one does a rent vs. buy comparison using the existing market values for rent and prices, this is already taken into account. If you add property taxes to rent, you are double-counting the property tax paid by a tenant - in fact it is built into rent.

The rent vs. buy comparison must account for the fact that owners pay the tax ON TOP OF AND IN ADDITION TO buying the house, while tenants do not pay it ON TOP OF AND IN ADDITION TO their rent. To argue otherwise is double-counting a cost.

Quote:
Originally Posted by freemkt View Post

Of course, maret [sic] conditions are local and also vary over time. At some times in some places - especially in the short run - renting is a better deal. At some times in some places, especially in the long run, owning is a better deal for most people.

It's always referable to have options; what really sucks is pay too much because you were never able to buy..
This is disputable. A leveraged small-cap stock portfolio with a margin debt* can earn about 13% annually on average. To say you can borrow for RE but not for stocks is a double-standard.

But even an unleveraged stock portfolio can get 12% if it is in 100% small-caps.

* To be fair, margin debt is adjustable rate debt, not fixed rate debt. Thus an apples to apples comparison would be to buying RE with an ARM, not a fixed rate mortgage. In this case this moves the needle closer to favoring buying.

Last edited by ncole1; 12-02-2014 at 08:36 AM..
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Old 12-02-2014, 08:32 AM
 
33,016 posts, read 27,326,217 times
Reputation: 9074
Quote:
Originally Posted by ringwise View Post
Your milk analogy is flawed. Costco sells milk only in gallons (packs of 2, usually). If you want quarts, you have to go to your local supermarket or convenience store.

You're saying you want to force Costco to sell milk in smaller quantities. That will result in higher prices on milk. If you want smaller containers, you have to go where they are sold. Same with a home. There are plenty of places where there ARE small lots. But you don't want the hassle of having to move or live there.



I'm not forcing anyone to sell or to not sell anything! If a property owner WANTS to split their lot and sell the guest house, I'm okay with that it should be their call (of which you apparently disapprove!). The single family home will still prevail. Property owners and buyers would have more options but there will be no wholesale changes.
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Old 12-02-2014, 08:42 AM
 
105,874 posts, read 107,840,851 times
Reputation: 79460
Why stop there , why not allow us all to sell off rooms in our house . there are zoning laws for reasons.
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Old 12-02-2014, 08:46 AM
 
Location: NNJ
15,035 posts, read 9,999,782 times
Reputation: 17169
In regards to car...

I don't know why people still buy new cars.... cash or financed (doesn't matter). They are a complete rip-off at the price they are listed. Companies specifically price the car for the leaser; they want people to lease.. hence why all the marketing material show case lease monthly payments.

Don't want to lease or can't? Buy a used reliable car. I'm not talking about a beater. I'm talking about a car that has just completed its lease and typically has about 36k miles on the odometer and about 3 years old. Avoid the depreciation. Its not like it was in the past... most modern cars (even lower brand ones) can hit at least 100k with no problems. Do not.. I repeat.. do not... do this with a luxury brand vehicle. The cost of parts can easily outweigh the benefits (I know from personal experience and I repair my cars myself). Most luxury cars are built to look pretty in the show room and drive awsome when new. However, my experience has been they "loose their shine" (I'm not only talking about looks... mechancials too) fairly quickly with a high cost.

My observation (mostly coworkers), they buy too much car.... and to fund it... they lease. Its a really bad habit to start and kick. I bought two cars.... one to commute (cheap, econobox, good mpg) and one to keep (fun, convertable, in garage). I don't put the miles on the cars I want to keep with my daily commutes and subject them winter salt. My 15 year old fun car is still a joy to own (and work on). Think in terms of cost/mile if you are commuting While most modern cars can reach 100k easily, a high end car costing twice as much doesn't necessarily get you twice the lifetime mileage.
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Old 12-02-2014, 08:49 AM
 
33,016 posts, read 27,326,217 times
Reputation: 9074
Quote:
Originally Posted by ncole1 View Post
Rent is not going up (on average). The Fed may be diluting our currency, but rent stays the same. Don't confuse inflation with a genuine reduction in affordability. It may take more dollars to pay it, but it is not more expensive.

Fiat currencies have no value apart from purchasing power.



This is a common misconception that is based on ignoring opportunity cost of equity, opportunity cost of the owner's time, and taxes/insurance/maintenance/repair cost.



As long as one does a rent vs. buy comparison using the existing market values for rent and prices, this is already taken into account. If you add property taxes to rent, you are double-counting the property tax paid by a tenant - in fact it is built into rent.

The rent vs. buy comparison must account for the fact that owners pay the tax ON TOP OF AND IN ADDITION TO buying the house, while tenants do not pay it ON TOP OF AND IN ADDITION TO their rent. To argue otherwise is double-counting a cost.



This is disputable. A leveraged small-cap stock portfolio with a margin debt* can earn about 13% annually on average. To say you can borrow for RE but not for stocks is a double-standard.

But even an unleveraged stock portfolio can get 12% if it is in 100% small-caps.

* To be fair, margin debt is adjustable rate debt, not fixed rate debt. Thus an apples to apples comparison would be to buying RE with an ARM, not a fixed rate mortgage. In this case this moves the needle closer to favoring buying.

Being able to even be in a position that a rent/buy analysis is worthwhile is a luxury most renters do not have; even if the data screamed that I should buy I would not be in a position to buy.

My readings suggest rents ARE going up (becoming less affordable) in many markets across the country.

Last edited by freemkt; 12-02-2014 at 09:10 AM..
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Old 12-02-2014, 08:53 AM
 
18,488 posts, read 15,453,055 times
Reputation: 16144
Quote:
Originally Posted by freemkt View Post
sos


Being able to even be in a position that a rent/buy analysis is worthwhile is a luxury most renters do not have; even if the data screamed that I should buy I would not be in a position to buy.
You continue to repeat this over and over after it has been addressed already.

Quote:
Originally Posted by freemkt View Post

My readings suggest rents ARE going up (becoming less affordable) in many markets across the country.
Any references?
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Old 12-02-2014, 08:57 AM
 
Location: NNJ
15,035 posts, read 9,999,782 times
Reputation: 17169
Quote:
Originally Posted by ncole1 View Post
Rent is not going up (on average). The Fed may be diluting our currency, but rent stays the same. Don't confuse inflation with a genuine reduction in affordability. It may take more dollars to pay it, but it is not more expensive.
Apartment Rents Are Rising Steadily and Quickly - WSJ

It may not be more expensive from a value point of view but in reality rent becomes less attainable in the case of a person with a stagnant wage that does not keep up with inflation.
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