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Old 03-22-2011, 02:52 AM
 
Location: Texas
44,256 posts, read 64,099,601 times
Reputation: 73914

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I think he's also overlooking the fact that in some states, your home is protected in the case of civil lawsuit, etc. So for some, it is a necessary part of portfolio diversification.
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Old 03-22-2011, 02:53 AM
 
16,433 posts, read 22,118,524 times
Reputation: 9622
Based purely on my personal experience (a survey of one...) renting is better than owning. I agree with the authors conclusions. Property taxes are going to be a trap as government goes broke and runs out of cows to milk. Maintenance is very costly, and most people will have to move for one reason or another in their lifetime. Even in retirement when you think you will stay put, one partner or both will most likely need assisted living and have to liquidate any property or assets. It's a game you can't win unless you are lucky. If you're lucky, just play the lottery.
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Old 03-22-2011, 08:09 AM
 
Location: Charleston, SC
5,615 posts, read 14,742,758 times
Reputation: 2555
Quote:
Originally Posted by ciscovpn View Post
Listen to the author. He seems to insist that buying a house is the most ridiculous thing you can do with your money.

why i am never going to own a home again: Tech Ticker, Yahoo! Finance
Links like this make me wonder if the author is just fishing for views and knows that what they're saying makes no sense.
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Old 03-22-2011, 12:49 PM
 
Location: Albuquerque
5,548 posts, read 16,033,213 times
Reputation: 2756
Quote:
Originally Posted by timfountain
... goes on and on about how owning is a terrible investment
... traditionally low return, ... renting has no return on capital
at all, none, zip, nada. What a fruitcake.
That's not being a fruitcake.

There is no justification for making an illiquid, inconvenient investment that pays 0.5%
( or something like that ) rather than doing the alternative that pays nothing.

What the author missed was the issue of timing. There is an old investment saw:

"Don't tell me what to buy. Tell me when to buy it."

There were great times to buy stocks and crappy times.
There were great times to buy gold and crappy times.
There were great times to buy a house and crappy times.

The money is made in the buying, not the selling. This goes both for those investing long and short.

Quote:
Originally Posted by Bideshi
Property taxes are going to be a trap as government goes
broke and runs out of cows to milk. Maintenance is very costly,
Tenents pay for both of these things in any rental that makes a profit such as multi-unit
dwellings and apartment complexes. It's buried in your rent one way or another - sooner or later.

The property owner isn't going to say "Gosh! My taxes went up. How am I going to make money now?"

For all those "rent till prices recover" properties out there, this does not apply.
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Old 03-22-2011, 01:06 PM
 
532 posts, read 1,459,927 times
Reputation: 465
Anyone I ever spoke to about this subject that was older and had never bought had 1 of 2 responses:
a.) They wish they had bought years ago.
b.) They very defensively bragged about how happy they were not having to pay Real Estate taxes (even though they are as mentioned here many times).

Even assuming the .5% annual return for housing is correct ,you're getting .5% return on borrowed money.Today in many areas buying and renting are close in monthly cost,not like it was 5 years ago where renting was much cheaper.

Very few people will have the discipline to invest their money monthly never missing a month as the house forces you to do.

Honestly in a room filled with homeowners how is that renter going to feel about themselves ?
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Old 03-22-2011, 02:04 PM
 
Location: Albuquerque
5,548 posts, read 16,033,213 times
Reputation: 2756
Quote:
Originally Posted by beachouse
Even assuming the .5% annual return for housing is
correct, you're getting .5% return on borrowed money.
As gains are amplified with leverage, so are losses.

That 0.5% return is an average over decades.

Again, timing is everything. During up-markets, gains are likely
to be much higher than 0.5%. Whenever prices for this market
head up, they are also likely to move higher than historical norms.

Likewise, when prices go South, they aren't going to do it in nice,
gentle 0.5% annual increments. The highly leveraged buyer's
equity can vanish pretty fast. Ever got a margin call? It sux.
Quote:
Originally Posted by beachouse
Honestly in a room filled with homeowners how
is that renter going to feel about themselves ?
Footloose and fancy free?
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Old 03-22-2011, 02:04 PM
 
10,004 posts, read 11,080,714 times
Reputation: 6298
Quote:
Originally Posted by sacramento916 View Post
The guys a moron. Yes, people have lost money on their homes. However, many others have built a fortune on real estate.

Everyone needs a place to live anyways. Answer this question:

WHO HAS EVER GOTTEN RICH FROM RENTING?

ZERO. There you go.

Moron.
ITS A HOME...what is this getting rich stuff>???..this thinking is what caused the damn problem in the first place. Its not an investment its a PLACE TO LIVE...arrrgggghhh
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Old 03-22-2011, 02:12 PM
 
Location: Union County
6,150 posts, read 9,975,353 times
Reputation: 5831
Quote:
Originally Posted by beachouse View Post
Anyone I ever spoke to about this subject that was older and had never bought had 1 of 2 responses:
a.) They wish they had bought years ago.
b.) They very defensively bragged about how happy they were not having to pay Real Estate taxes (even though they are as mentioned here many times).

Even assuming the .5% annual return for housing is correct ,you're getting .5% return on borrowed money.Today in many areas buying and renting are close in monthly cost,not like it was 5 years ago where renting was much cheaper.

Very few people will have the discipline to invest their money monthly never missing a month as the house forces you to do.

Honestly in a room filled with homeowners how is that renter going to feel about themselves ?
"homeowners"? - Not that many people actually own their home.

I wonder how those underwater and unable to get out from under the house would feel in a room filled with renters.
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Old 03-22-2011, 03:23 PM
 
Location: Barrington
63,919 posts, read 46,479,588 times
Reputation: 20674
Quote:
Originally Posted by jp03 View Post
ITS A HOME...what is this getting rich stuff>???..this thinking is what caused the damn problem in the first place. Its not an investment its a PLACE TO LIVE...arrrgggghhh

The article's author seems to forget one cannot live in their investment portfolio. Some may have noticed the author also champions not sending your kids to college. Now here I thought he was going to take the poor investment tack and he did. Who pays for the education is a private matter.

He then goes on to try to persuade te reader that people can all do just as well without an undergraduate degree. Guess he does not get that an undergraduate degree is now the equivelent of what a hidh school dipolma used to be, in terms of so many entry level positions and promotions.

All things being equal, corporate america including health care, favors the kid with a degree, unless it's a dead end position.
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Old 03-22-2011, 03:28 PM
 
18,837 posts, read 37,224,712 times
Reputation: 26458
Well, I had a home, on one income, and it drove me into the ground. I bought a modest home, well able to afford payments on my salary...but it seemed like every month there was an "issue", like this broke, or a flood, or whatever...and I don't know how to fix stuff...sure, buy a book...well, I was also working 60 hours a week, and raising kids alone...then, there is, the "oh, you don't have a job here any more"...more and more common for folks in the US...so, now, you are stuck in a house, in a place where you don't have a job...jobs now require flexibility to move. An upside for folks who don't have a home...you can afford to move, and get a better job...many folks are stuck in upside down mortgages, so they can't move...if you can, you are in a better position for jobs.
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