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If I had money I would build tiny houses. That would be very, um, constructive.
No you wouldn't. Because if it was profitable, others would be doing it. The fact that it's rare means there isn't much money in it. But you keep living the fantasy....
Most renters cannot buy so there is no cashflow surplus for those who cannot buy.
Wrong, once again. I've been a renter 3 times in my life. In all three instances I bought a home after renting. In two instances I started renting with almost zero money in the bank. Once, right after getting done with trade school. Once, right after my divorce and moving to a new state.
In every instance, I put buying a home as a TOP priority. I scrimped, cut back, ate lots of low cost meals, never went to movies or out to eat, and ALWAYS questioned whether I REALLY needed to buy something when I was at a store.
Renters CAN buy. Who do you think buys starter homes?
If that is all I can earn I will necessarily have to live on that; I expect eventually to pursue seasonal homelessness to save on rent when I can no longer afford year-round shelter. Yeah I have a friend with no degree who got hired at a mattress store to do payroll; within three years he bought a house and now he pays less to own that house than I pay to rent a crappy room in an eight-person house.. I'm sure I could do that job well but as not a people person and with sucky jobs under my belt I have no idea how to get a job like that.
This excuse tops them all. Of ALL the jobs that require people skills, payroll would be at the bottom of the list.
I appreciate your knowledge and experience but later in life when retired the ability to live in a paid off home which can be reverse mortgaged if need arises is beneficial.
Otherwise that retirement income will be tied up in rent.
paying rent in retirement is no problem as long as the money not tied up is generating more than the rent increases.
Hoomeowners build equity every month when they make an amortizing mortgage payment plus every month their home value appreciates. Try doing that with your rent. (And yes I know you can but the average paycheck-to-paycheck renter cannot.)
Property values go down too; sometimes they plunge 70%.
In my opinion, the real economic value in buying a home is semi locking in your housing costs. As the years go by and the cost of living increases, your housing expense does not keep pace. In my state, property taxes cannot rise much either.
Which beats the pants off paying the same number of dollars for rent while getting zero back, zero equity, zero appreciation and another rent increase.
The big jackpot comes when you sell for a $500K untaxed capital gain, or when you hold the property until death and your heirs happily enjoy a million-dollar pass on capital gain taxes thanks to a magical basis step-up.
Rent is not an investment. It's an agreement whereby a landlord agrees to provide a service (roof over their head) to a renter for a specified cost. The thing you get "back" is a place to live. Just like the grocery store gives "back" food when you pay them.
You envy is starting to reach pathological proportions.....
Which beats the pants off paying the same number of dollars for rent while getting zero back, zero equity, zero appreciation and another rent increase.
The big jackpot comes when you sell for a $500K untaxed capital gain, or when you hold the property until death and your heirs happily enjoy a million-dollar pass on capital gain taxes thanks to a magical basis step-up.
So, set yourself up to become a homeowner. Start with increasing your income.
Rent is not an investment. It's an agreement whereby a landlord agrees to provide a service (roof over their head) to a renter for a specified cost. The thing you get "back" is a place to live. Just like the grocery store gives "back" food when you pay them.
You envy is starting to reach pathological proportions.....
living in a home you purchased is an expense ,it represents your housing costs.
you write checks all year for it and its up keep.
whether more or less than renting is variable in each situation but in any case you are taking money out of your piggy bank each year to live there.
sure you can sell it but you can rent and sell any investment you own just the same .
I can rent and liquidate the investments I bought instead of that house anytime I want .
I can buy another house or other investments and rent but it is all the same regardless.
our cost of housing is just that, it is an expense as long as we consume it.
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paying rent in retirement is no problem as long as the money not tied up is generating more than the rent increases.
Yes that is obvious but what about if another 2008 were to occur while in retirement? Or the presumption is a person is substantially diversified as to weather those economical downturns?
With a residence paid off there is always the residence.
Some people who started early pay off their mortgage early and still in their prime earning years have sufficient surplus for money making endeavours. There are many ways fortunately to slice that pie.
I see the point of not buying in housing inflated areas-Pacific Heights, Lower Manhattan, etc. but housing ownership is perfectly feasible in some areas. A 20 or 30 year mortgage is fixed payment whereas rent will increase in the same 20-30year cycle. And that is fortuitous for someone who purchases in a pre-boom era and maintains their residence well into later decades. Unfortunate for those who look to purchase in an area with high residential ownership costs.
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