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Old 05-12-2011, 03:21 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,087,251 times
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Quote:
Originally Posted by CaptainNJ View Post
but the reality is that most renters are renting because they cant save up the money for a downpayment. its a perfectly legitimate financial decision for a frugal person, but its usually not really how it goes.
Except for the fact that there are numerous government programs that allow people to get mortgages for 0~3.5% down.

So you are saying that in areas of the country where its cheaper to rent, the person who saves, etc usually buys a house despite it costing more? Yeah...that sure makes sense. I guess that explains the penny-pinching, gotta make up for the extra housing costs.
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Old 05-12-2011, 03:38 PM
 
Location: Central Texas
13,714 posts, read 31,176,487 times
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Quote:
Originally Posted by user_id View Post
In reality, homes are just a sort of status symbol. Most people don't even use the space they have, they just collect junk in it.
Sounds like you are making an arbitrary statement about what other people like and value. How do you know what most people do with the space in their home? So if a couple wants a 3 bedroom house for a future child and guest room may not occupy all that space on a daily basis, but that doesn't mean their home is a status symbol.

No doubt that for some people their home is as much a status symbol as their German car. But for many others, I think most, they own a home because they want some space. They don't want to share walls and they want to be able to hang pictures with nails without worrying about a landlord.
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Old 05-12-2011, 03:40 PM
 
Location: The Triad
34,090 posts, read 82,975,811 times
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Quote:
Originally Posted by user_id View Post
Frugality in itself isn't going to make you money
I don't think anyone denies this point...

you're about the only one who sees even making this point...
as being germane to anything. enough already.
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Old 05-12-2011, 05:23 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,087,251 times
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Quote:
Originally Posted by hoffdano View Post
Sounds like you are making an arbitrary statement about what other people like and value. How do you know what most people do with the space in their home?
There is nothing arbitrary about my statement, it was derived from 1.) Human psychology/culture, 2.) observation. Homes, in particular the size, function as a status symbol in American culture.

Quote:
Originally Posted by hoffdano View Post
So if a couple wants a 3 bedroom house for a future child and guest room may not occupy all that space on a daily basis, but that doesn't mean their home is a status symbol.
Most likely, after all, their decision to buy a home was made in a culture that uses homes as status symbols, especially in regard to the size.

Of course people tell themselves they are doing it because a "future child", of course they could wait until the "future child" actually materializes.

Quote:
Originally Posted by hoffdano View Post
But for many others, I think most, they own a home because they want some space. They don't want to share walls and they want to be able to hang pictures with nails without worrying about a landlord.
Right, you're talking about suburban American culture, here homes are king and the primary source of ones status. But my comment about status had nothing to do with rent vs own, instead, it was that Americans are inclined to live in large homes regardless of whether they rent or own because they derive status from it. Now, people also derive status from "owning", hence the numerous people willing to commit financial suicide just so they can say they "own" their home.

On the other hand, in a high cost city like NYC, San Fransisco, etc homes aren't as central to one's status. This is the problem with suburbanites coming to these communities, they are playing from the suburban hand book and look for large homes, which they can naturally not afford. Living in a 1,000 sqf home, to them, just doesn't seem right. Why? Because they correlate it with lower status....
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Old 05-12-2011, 05:28 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,087,251 times
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Quote:
Originally Posted by MrRational View Post
I don't think anyone denies this point...

you're about the only one who sees even making this point...
as being germane to anything. enough already.
Please read what I was responding to, namely "By this measure I think a lot of homeowners in expensive areas are frugal. That's how they were able to buy their house.".
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Old 05-13-2011, 08:17 AM
 
13,005 posts, read 18,908,288 times
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The biggest saving you get by renting is not taking a huge loss on the property. Figure plenty of homeowners have lost $100,000 by living there for five years. You can rent some pretty luxurious places in most areas for less than that.
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Old 05-13-2011, 08:44 AM
 
Location: The Triad
34,090 posts, read 82,975,811 times
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Quote:
Originally Posted by pvande55 View Post
The biggest saving you get by renting is not taking a huge loss on the property.
sorta maybe depends and actually very rare to happen.

Quote:
Figure plenty of homeowners have lost $100,000 by living there for five years.
You can rent some pretty luxurious places in most areas for less than that.
No. This misses the larger point.

The point being that for younger people in the current job market the ability to pick up and go to a new job and often on rather short notice is critical. Renting allows them the maximum flexibility to earn more or just keep earning when the tides change on you rather than being sucked down by the undertoad and your only option is being an "accidental landlord".
---

But there IS a flip side to this.
You still need to invest otherwise to make up the difference that having a more traditional lifestyle with a mortgage allowing you to progressively own your home would provide.

Ten years from now, in fifteen certainly (it better be)...
most of you under 30 and 30ish people will be looking around for that social stability...
and more than likely good schools and all the rest of the picket fence thing too.

You'll *want* to be financially capable of making a shift of your assets from an investment portfolio into real estate.
You'll *need* to have the ability to make the choice.

If your special snowflakeness allows you to have other options? Great.
Just don't count on that.

All of this means that you need to keep that rent payment as low as possible...
so you have enough CASH available to invest for the 45yo you.
He/She wont want to enter into a 30 year mortgage. Don't make them.
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Old 05-13-2011, 09:13 AM
 
2,053 posts, read 4,816,054 times
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I am one who couldn't possibly care less or be influenced by what my neighbors/relatives/friends think of me or do.

If I have a car, computer, house, etc. that work well according to my needs, even if I see others buying the latest, coolest (their opinion), fastest, etc. item, whatever it is, it doesn't bother me in the least.

I want a lifestyle that works for me; the bottom line is no one is going to pay one's bills if one starts debt one can't finish only to keep up with whatever other have/buy/own.

"Status", to me, is owning a house one can afford and is paid for. It doesn't matter how big one's house is, paying a mortgage does not make one a homeowner until one pays the last installment, right?! And renting in an expensive area - to show "status" - doesn't really mean much bc, after all, one is just a temporary dweller in someone else's property, at least this is my understanding.
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Old 05-13-2011, 10:20 AM
 
Location: Conejo Valley, CA
12,460 posts, read 20,087,251 times
Reputation: 4365
Quote:
Originally Posted by MrRational View Post
You'll *want* to be financially capable of making a shift of your assets from an investment portfolio into real estate.
You'll *need* to have the ability to make the choice.
This ignores whether or not real estate at the time is a good value. I'm sure most people, assuming they plan to be in the area for awhile, would prefer to own all things equal. But if ownership comes with a significant cost, as it does in many areas of the country right now, why would one want to be capable of shifting their assets?
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Old 05-13-2011, 10:41 AM
 
Location: The Triad
34,090 posts, read 82,975,811 times
Reputation: 43666
Quote:
Originally Posted by user_id View Post
This ignores whether or not real estate at the time is a good value.
Yes it does. That is a philosophical discussion.

Quote:
I'm sure most people, assuming they plan to be in the area for awhile, would prefer to own all things equal.
Plan? There are very few 30ish people who have anywhere near enough job security to plan a summer vacation let alone anchoring themselves to one location.

Quote:
But if ownership comes with a significant cost, as it does in many areas of the country right now, why would one (NOT) want to be capable of shifting their assets?
and you're off to the races yet again
have a nice trip
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