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I've seen a few threads on different forums with people trying to claim that renting is better financially long term than owning
Are those same people finally ready to admit that they made a disastrous choice? If you have not yet purchased a home, you're either going to continue to pay ridiculously high + climbing rent or you will be forced to overpay on a house by 150K and get a 6% interest rate instead of a 3% interest rate you could have gotten if you pulled the trigger 3 years ago
I seriously feel bad for lifelong renters. Most of them are now in a situation where it's borderline impossible to ever become financially independent (assuming they don't make a huge income)
I've seen a few threads on different forums with people trying to claim that renting is better financially long term than owning
Are those same people finally ready to admit that they made a disastrous choice? If you have not yet purchased a home, you're either going to continue to pay ridiculously high + climbing rent or you will be forced to overpay on a house by 150K and get a 6% interest rate instead of a 3% interest rate you could have gotten if you pulled the trigger 3 years ago
I seriously feel bad for lifelong renters. Most of them are now in a situation where it's borderline impossible to ever become financially independent (assuming they don't make a huge income)
In 2019 I was paying $1800pm rent for a 3x2 apartment in Arizona. Interestingly, last night I got curious about the rental market there and looked up that apartment complex and the rent is now $3000pm. Even their 2x2 apartments are over $2000 in the area I was renting.
For sale price comparison, a 1x1 condo I thought about buying to serve as a glorified hotel room was $120k in 2018, and 1x1 condos in the same complex are now selling for $400k.
I had a vision of buying the 1x1 in Arizona and another 1x1 in a nearby state where I enjoyed vacationing, both around the $120k range in 2018, but personal circumstances didn’t permit. BOTH of those markets have seen very similar growth - BOTH condo complexes have recent $400k sales… so my $240k 2-condo vision is now an $800k lost opportunity
I don't think renting is a disastrous choice. There are all sorts of good reasons to rent instead of buying.
Either people have a good reason to rent or they can not qualify for a mortgage and they never could qualify for a mortgage, so buying has never been an option for some people.
Quote:
.....Do you happen to be in sales?....
No, I am not in sales. I'm a landlord, so I am perfectly happy that so many people are tenants. But even though I make my living off of their labor, that doesn't mean that there are not excellent reasons to be renting instead of buying.
No, I am not in sales. I'm a landlord, so I am perfectly happy that so many people are tenants. But even though I make my living off of their labor, that doesn't mean that there are not excellent reasons to be renting instead of buying.
I didn’t ask you the question so the answer is somewhat irrelevant at least to my inquiry, but since you responded is your significant other a nurse or in nursing school?
So are lifelong renters finally ready to admit they made a disastrous choice??
I do not see that happening.
When we were young for our first home, we bought a Tri-plex [three separate houses on one lot], Which gave us a house for us to live in and two rentals. We paid zero-down and the mortgage payments came from the rental income. We were both in college fulltime and we both worked fulltime for Minimum-Wage.
Once we fully realized that we could own homes without making any down payment and without any of our earned income being spent on mortgage payments, we stuck to that theme for years up past my retirement.
From 1985 on we have had renters.
Many times I have had long conversations with tenants.
The only time I have known tenants whose mindset included that they were capable of owning a home while working Minimum-Wage has been Chinese immigrants.
All American-born tenants have solidly held the belief they were renters because some rich person is at fault. It is someone else' fault that they were not wealthy and had no idea how to manage their finances.
It would be much easier for a life-long tenant to turn into a butterfly than it would be for one of them to suddenly accept the fact that they could own a home.
Here in 2022, I have tenants renting 1 bedroom 1 bath single-occupancy efficiency apartments, kitchenette [with microwave, hot plate, refrigerator] shared laundry room, all utilities provided, for $450 a month.
I seriously feel bad for lifelong renters. Most of them are now in a situation where it's borderline impossible to ever become financially independent (assuming they don't make a huge income)
When I graduated from college in the late 1970s, interest rates were sky high and down payment requirements were prohibitive....so I guess it was in that environment that I made my "choice to be a life-long renter" (as you put it).
Never really any regrets...over the years the lifestyle allowed me to appropriate a larger share of my income to the "disposable" category, so I was able to have fun while others were paying in to the long term commitments they made when they decided to become homeowners.
And, my career moved me around the country several times, so my being a renter definitely simplified that aspect.
Your post seems like someone looking for an opportunity to gloat. And I just don't see it that way. There were a lot of goodtimes I would have had to forfeit in order to be a homeowner. YMMV
I bought my first house in 1992 for about $105,000. I no longer live in that home, but Redfin says it's current value is about 5.5x that amount. Sound pretty good? Well, maybe.
If instead I'd put that money into the S&P 500, today I'd have an asset worth about 9.5x what I'd invested. And this assumes I did not reinvest the dividends, but instead used them to help pay my rent. Today those dividends would average $1400/mo.
So as an investor/renter today I'd have an asset worth about $400,000 more than the homeowner. The dividends did not cover all of the rent, but when you factor in the expenses that renters do not pay directly (property taxes, maintenance, etc) the out of pocket annual cost for shelter is not terribly different, and certainly not enough to make up the difference in asset value.
Of course this assumes buying the home in cash. Factoring in the use of loans gets more complicated, and I'll leave that to some other enterprising soul out there. In short, however, the situation for the renter/investor is hardly "disastrous".
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