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I am temporarily relocating for work, and planning to use this as an excuse to sell my house in CA. I have reached the realization that I just have zero desire to be a homeowner. I have spent SO much money and time on this house, but it's never good enough; I always see something else that could be improved, updated, or fixed. I dislike dealing with contractors and repair people. I love the idea of not being invested in a property and just calling the apartment office if something needs to be fixed.
Has anyone else reached the same realization, and what were your reasons? How do you explain this to your family? I am expecting some pushback from my parents for renting when I can technically afford to own a home, but just don't want the hassle.
They take the lump sum from sales in high cost of living areas , invest the lump sum and move to cheaper areas and rent .
That lump sum may not only pay the rent , but most of their living expenses ,all while the investment is still growing.
We did ..
Except we took the money no longer in the house , rented and bought a very lucrative real estate business ....we sold everything off , retired and have a nice comfortable retirement and are able to buy multiple homes today with the money we made ...
So it isn’t about renting as much as what you do with the money
Depending on what stats you look at, about 63% of Americans own their home.
The other 37% is a mix of reasons for not owning, but a great many of them just don't aspire to ownership. There is nothing wrong with that.
I am long-term owner, with an owner mentality, but we are not the same and should not think all should have the same expectations, wants, and needs.
You may be a life-long renter. Your desires may change in 5 or 10 years. Whatever.
Live your life!
They take the lump sum from sales in high cost of living areas , invest the lump sum and move to cheaper areas and rent .
That lump sum may not only pay the rent , but most of their living expenses ,all while the investment is still growing.
We did ..
Except we took the money no longer in the house , rented and bought a very lucrative real estate business ....we sold everything off , retired and have a nice comfortable retirement and are able to buy multiple homes today with the money we made ...
So it isn’t about renting as much as what you do with the money
The equity in my home would cover about half the rent or equivalent living arrangement, assuming invested at 3%. More if we downsized, but we are comfortable as we are.
The annual upkeep, taxes, etc, would easily cover the other half.
That may appeal to us one day.
The equity in my home would cover about half the rent or equivalent living arrangement, assuming invested at 3%. More if we downsized, but we are comfortable as we are.
The annual upkeep, taxes, etc, would easily cover the other half.
That may appeal to us one day.
The long term averages for a balanced fund are 2x that.
But our case it isnt just the money in the home ..it was the money in the home being invested in the real estate business which took a few hundred thousand and multiplied it in to multiple 7 figures .
So it. Isn’t the money in the home that supports us now , it is what the money in the home grew to.
Even if we had the house the equity would be about 600k today ....that is nothing compared to what we can live on because that money no longer tied up in the home grew at a much greater rate elsewhere ...even if we subtract out taxes and 15 years of rent we can buy multiple homes like we had .
So the equation is not just about the equity in the house if the decision to rent and invest elsewhere is done earlier
Last edited by mathjak107; 04-04-2021 at 06:57 AM..
The long term averages for a balanced fund are 2x that.
But in our case it wasn’t the money in the home ..it was the money in the home being invested in the real estate business which took a few hundred thousand and multiplied it in to multiple 7 figures .
So it. Isn’t the money in the home that supports us now , it is what the money in the home grew to.
Even if we had the house the equity would be about 600k today ....that is nothing compared to what we can live on because that money no longer tied up in the home grew at a much greater rate elsewhere ...even if we subtract out taxes and 15 years of rent we can buy multiple homes like we had .
So the equation is not just about the equity in the house if the decision to rent and invest elsewhere is done earlier
Not everyone works in the realm you do and describe.
The average person works with earmarks for finances, and has to observe a budget.
The OP who doesn't want to own needs to be focused on OP's wants and needs and capabilities.
And, on living life without worrying about Mom and Dad micro-managing and micro-overbearing, as much as distraction regarding maximizing investment potential.
Everyone is going to be be different and their investing outcomes would be different as well as the resources they have at different times in their lives so they can even have choices of plunking down large lump sums somewhere else while renting
I mean when I sold our first coop we took the proceeds ,bought a house in 1987 for 169k and today that house is 900k.
Prior to the coop we could not have paid rent and invested any difference but the coop appreciated a lot and we sold
If instead we didn’t plunk the 169k down and put it in the fidelity insight growth model , which I have been using since 1987 ,that money today would be 7.9 million today and that includes the lost decade for stocks , the Great Recession, the dot com bust and the pandemic. Had that money been put in the fidelity insight sector model instead ,that portfolio is 11.83 million today without a penny added .
You can see that we could easily subtract out rent and taxes and have a way better financial picture today then had we kept that house .
So part of the equation is what the equity or resources you have to work with is . Obviously someone starting out is likely paying rent with little to invest .so these choices tend to come much later.
Our real estate venture produced exceptional results ..but the fidelity insight models are available for everyone to use.
Even an s&p fund would have been close to the insight results coming in about a million less
So again , it isn’t a comparison of the equity in the house to the income it generates , it is what the money not invested in the house grew to over the same time frame and the income it generates now ..
It is like the 900k in the house generates 36k a year if we sold the house and drew 4% inflation adjusted
But the original amount put in the insight model grew and today generates many times that today even after subtracting out decades of rent and taxes
———————————
Per 100k invested
I am temporarily relocating for work, and planning to use this as an excuse to sell my house in CA. I have reached the realization that I just have zero desire to be a homeowner. I have spent SO much money and time on this house, but it's never good enough; I always see something else that could be improved, updated, or fixed. I dislike dealing with contractors and repair people. I love the idea of not being invested in a property and just calling the apartment office if something needs to be fixed.
Has anyone else reached the same realization, and what were your reasons? How do you explain this to your family? I am expecting some pushback from my parents for renting when I can technically afford to own a home, but just don't want the hassle.
Theres probably not a homeowner who doesnt see that. It depends on whether you can be satisfied where you are. Right now, I prefer home ownership, as its security to me. If you rent a house, the homeowner can always decide to sell, and you are forced to move. If you rent an apartment, you are at the mercy of the people living on the other side of the wall. For me, home ownership is security. Sure, theres lots I really need to do to this house, but I may, or may not, get it done, but I can live with it. Thats not to say in a year from now that I might decide to sell and rent somewhere. But for now, its where Im at.
As a widow there are many days when I do not care for being a homeowner. Since my house is older, something always needs to be done and I have to prioritize the most important things. But on the plus side I have my own large yard and it's fenced so my dog has freedom and I don't have to listen to noisy neighbors or smell their cooking.
Now as I get older I might consider a condo or a townhome but for now I would be paying $400-$600 more a month to rent something comparable to what I already have. And my house is an asset for when I do sell down the road.
No one has mentioned aesthetics. One reason i own my home as a retiree is i need to surround my self with the colors and textures i prefer. And to indulge in a few horticultural whims outside. It’s a drawback to renting.
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