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living in that high cost area may not be such a bad thing for the reasons i mentioned above . selling and relocating eventually from these high cost areas usually results in a windfall locals don't see just living in that low cost area .
when we had the house in the pocono's the locals had little except their relatively cheap home . all the transplants that came from high cost areas and sold were far wealthier from it . they had that cheaper home and lots of cash to go with it from the sale of their homes .
Last edited by mathjak107; 12-07-2015 at 05:28 AM..
I have rented all my life and have been in many heated debates with homeowners on this issue. In the end, there is no right and wrong answer. For me, I have no children and am not married. I like the idea that I am always X months away from making a change whether that's moving to a new city for a better job or a new place down the road. I also hate doing upkeep and would prefer to spend my off-time outdoors hiking and such and relaxing. In short, I use my "non-roots" lifestyle to my advantage. If I had children and absolutely loved my area, I may feel differently.
And the "throwing money away by renting" argument gets old. In some instances, absolutely and in some others, not so much. I have seen homeowners who planned well lose their shirts because of market volatility and unplanned expenses while others have done quite well. ...and there is a value to not having the on-going up-keep the houses require.
In the end, it's a personal decision and I sincerely wish that there was a lot less bias in our society about not owning a home. It doesn't do those who should not be owning (for both financial and lifestyle considerations) any good.
I think renting is becoming the norm with the younger generations. Good jobs are mostly in major metro areas. Staying in your small home town is not really an option anymore.
...But if you rent that same house you still end up paying that tax indirectly.
The whole point is that the property tax on an apartment-building with 100 units is NOT 100 times the property tax on one single-family house. There's an economy-of-scale that benefits both the landlord and the tenants.
I was toying with the idea of turning my house in the countryside into a rental, but it's impractical. Why? because for the amount of monthly rent that I'd need to charge, a prospective tenant could almost afford to buy the place. The main costs aren't in the acquisition-price of the house (mortgage principal and interest), but in the taxes, the insurance and the maintenance. As a prospective landlord, I'd have to pass these costs onto my tenant. And whereas I personally can tolerate a thing or two going broken or missing in the house, I'd have to be hopping constantly to answer my tenant's complaints about the water-heater and the clogged gutters and so forth.
Further, a huge appeal of living in the countryside is autonomy and the feeling of nesting in one's own castle. That is inapposite with the psychology of renting.
In the city, things are exactly the reverse. Between high congestion and tight regulations, one never really feels like an "owner", but like a participant in a collective. If so, why bother with the toil and risk of ownership? A neighborhood might gentrify or rapidly decline; why countenance the risk?
Thus to a large measure the rent-vs.-own debate is a debate between the city and the suburb/countryside.
[quote=InchingWest;42188434]Pretty much it. Everyone also likes to think all those small time landlords are "rich", but that's oftentimes not the case. Many are just barely getting a profit once you factor in repairs and taxes, which to some is not a large enough profit to warrant the time or hassle.
So true, that's why you need to be debt free on your properties and be handy. The income from our rentals literally pays for all of the taxes and insurance with enough of a cash flow to pay for our utilities and then some. There can be years with zero profit with big ticket items like a roof but you have to be a good money manager and be prepared for contingencies. We've been landlords since the early 90's and I have to say that it was worth every headache and hard work. I was able to retire at 58 because of the rental property. We have enough money from never touching the money from the rentals until now to literally go out and pay cash for three more houses, but I'm getting lazy in my old age. I'm leaning more towards vacation properties. Girls just want to have fun now.
...that's why you need to be debt free on your properties and be handy. The income from our rentals literally pays for all of the taxes and insurance with enough of a cash flow to pay for our utilities and then some. There can be years with zero profit with big ticket items like a roof but you have to be a good money manager and be prepared for contingencies. We've been landlords since the early 90's and I have to say that it was worth every headache and hard work. I was able to retire at 58 because of the rental property....
My coworker retired at 55, with a pension, and immediately started buying/refurbishing/renting houses, with a partner - another fellow who'd recently retired. Both had had property-management experience as side-jobs while pursuing their principal careers, and both were more enthused about hands-on activities than about the sort of armchair engineering that's pursued in our regular employment. Now this "retiree" has an apartment-house with ~20 units... and is intensely happy; but also intensely busy.
By my reckoning, the whole point of retirement is to so arrange one's life, that one's time is spent in hobbies and recreational pursuits, and not in labor necessary for securing an additional income. I'd rather delay my formal retirement and accumulate a larger pension, than to retire early, only to immerse myself into what amounts to a second career.
Basically it all comes down to your personal situation. Someone mentioned that people typically buy more home than they rent, and that's true. In my case, I had my kid later in life so I still have a 6th grader and need a home large enough for both of us plus it needs to be in a location with great schools. Renting a comparable home is way more expensive than my mortgage. But if I didn't have my kid and didn't need the size and the schools, I could rent a smaller place in a different location for less.
It also comes down to personality and preferences - some people want the security of owning, knowing their rent won't go up and their landlord won't end their lease for any reason and they can do any renovations they want. Other people want the ability to pick up and move at will and no responsibility other than calling the landlord or mgmt company if something goes wrong. Neither one is right or wrong, just different strokes for different folks.
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So true, that's why you need to be debt free on your properties and be handy. The income from our rentals literally pays for all of the taxes and insurance with enough of a cash flow to pay for our utilities and then some. There can be years with zero profit with big ticket items like a roof but you have to be a good money manager and be prepared for contingencies. We've been landlords since the early 90's and I have to say that it was worth every headache and hard work. I was able to retire at 58 because of the rental property. We have enough money from never touching the money from the rentals until now to literally go out and pay cash for three more houses, but I'm getting lazy in my old age. I'm leaning more towards vacation properties. Girls just want to have fun now. 
