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By the way... a few years ago, I was in San Francisco driving my old 1970 Plymouth and got rear ended by a new Honda... my car had zero damage, the Honda had over $5000 and had to be towed away... my trailer hitch went right though the radiator and into the engine...
Oh so true.
I'd rather ride in this, than some of the tin cans people buy now days ...
I doubt that. That car is about a 1938 Plymouth. iT MIGHT BE FUN FOR A WHILE, BUT WITH NO ac, mohair seats, maybe an AM radio, and just about enough power for county roads, no Interstates, you would tire of it quickly. ( O' and tires , no radials or run flats ) Just basic transportation in the late thirties and early forties. Ford was the leader with the V8.
many cars back then were all steel, no plastic, but at the same time the factories could not stamp out large pcs. hence the center of the roof being vinyl and wood. They were no better or worse than all the others on the street that were built with thicker steel. Being a body chop guy took a lot of talent, they Fixed the cars instead of today when a small fender bender turned into a total.
Your Grandfather was correct for his day, not so anymore. Most buyers are using debt as part of there existence and the lack of earning enough money to get by. Many people see a new car as an investment if it can double your gas mileage , and if it will be safer on the road. I find people using old worn out unsafe vehicles all the time,full of very young children. That in my mind is irresponsible !
Most of those people are throwing away money and using the "safety" or gas mileage of a new car as an excuse to throw away that money. There are plenty of safe but economical cars that aren't brand new, and his grandfather certainly was correct about cars not being an investment.
You can add Thirtysomethings to the list of folks not buying houses. I know several people in their 30's that are renting, because a house is too expensive.
Most of those people are throwing away money and using the "safety" or gas mileage of a new car as an excuse to throw away that money. There are plenty of safe but economical cars that aren't brand new, and his grandfather certainly was correct about cars not being an investment.
Not always true I have made a profi on several cars.mostly vintage ones over the years. It's all about buying the right car or truck, at the right time. Automobile buying is usually not well planed. A slick salesmen will have you in that brand new ride faster than you have the time to really think about.
It becomes a problem when you owe more than the item is worth... use to see it all the time in the car business... someone would buy a new high performance car and find they owed more than the car was worth when they needed to make a change to something more family oriented or less expensive on gas...
If the item is paid for or equity exists... a person is never trapped... just sell for market price, pocket the cash and move on.
There are 4 types of Real Estate that I am familiar with.
Owner/User... buys for shelter and amenities
Investor... buys for long term gains and to build equity
Speculator... buys hoping to flip and cash out
Developer... buys to build/improve by adding value.
The one of the four I have never been is a Speculator...
But most younger people are not going to have much equity when they sell for the first time. I bought a condo in 2003, sold it in 2011 for less than I bought it for. I came away with about $1500 , way less than the cash I forked out for the down payment. So I would have been far better off renting.
But most younger people are not going to have much equity when they sell for the first time. I bought a condo in 2003, sold it in 2011 for less than I bought it for. I came away with about $1500 , way less than the cash I forked out for the down payment. So I would have been far better off renting.
In addition to location, location, location... I would say timing is a close second.
So far, I've been fortunate in that all my "Losses" have been on paper...
Many feel exactly the way you do and say no to every owning again...
Owning and renting are often lifestyle choices with Condos and Town Homes somewhere in the middle.
My passion is restoring Antique Cars and that is how I really got into Real Estate... I needed the space to store cars... not an easy thing to do in the city limits...
At one time, my Real Estate equity "On Paper" was amazing... but just like the paper losses none have been realized...
I know a lot of folks with the only thing of real value is the Real Estate they own...
But most younger people are not going to have much equity when they sell for the first time. I bought a condo in 2003, sold it in 2011 for less than I bought it for. I came away with about $1500 , way less than the cash I forked out for the down payment. So I would have been far better off renting.
I guess I would be called a developer. I have owned I house , stent 4 years restoring ,Sold 4 years ago in SW Michigan. I broke even, but I had to come way down to move it. In the past I have built 3 houses. they were all money makers. Did the best on the beach in Florida, built on a barrier island, no bridge. It was a small beach house, quite simple. Lived in it 6 months, sold for four times cost. Gave me lots of cash to build my mountain home in the Blue Ridge, another winner, nut I lived there 18 years first.
Young people may lose out financially, even if they stay in a property for 10 years. There may career or industry changes that may be more beneficial to move. After getting laid off, I had the option of a taking $6k paycut for a local job, or go unemployment and look for something better. I opted to move for $20k raise in another city with the same cost of living. If I had been tied down locally, it would have cost me $26k/yr($20k raise without the $6k pay cut). I am sure others have done better. Is it worth it to give up $25k/yr?
In this economy, many are underwater and living off unemployment. The opportunity cost could be easily $50k/yr between unemployment and a great career move in another city, and also losing the home to foreclosure.
In this economy, many are underwater and living off unemployment. The opportunity cost could be easily $50k/yr between unemployment and a great career move in another city, and also losing the home to foreclosure.
I agree with this reasoning.
But, the caveat is that this problem only becomes prominent when the housing market lacks "normal" pricing and liquidity. Given those conditions, home ownership should have no benefit vs. renting, as far an economist is concerned; the price of a square foot of something bought vs. something rented should reflect all the costs and benefits of each, with the net comparison being equal.
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