Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I typically agree with a lot of what the OP (and Bayarea girl) says, but I'm not really sure where the anti-ownership logic lies. It doesn't make any real sense.
It's like any other investment: continually buying and selling stocks will be a net loss if there isn't significant appreciation since you're charged trading fees, but long-term hold investors will always make money in the stock market.
Are you throwing money away by renting? Are you throwing away money by renting furniture? Appliances? I guess it depends on your view point, but in the long run? Yeah, you are throwing a certain % of money away - you'll never see it again and it's not possible to build equity by living in someone else's home. All you're doing is building their equity - why do you think they're renting it to you?
One comment that confused me was when the OP talked about selling a house not being a good investment when you re-sell in a couple of years.
What? Why would you buy with the understanding that regardless of market movement you were going to sell? Shouldn't you go into the investment knowing when your break-even point will be without considerable appreciation?
These are facts consistent with any market. If investment makes someone that nervous, maybe investing isn't for you.
As someone who came from a family that began building long-term wealth via landlording and whose made a retirement plan for himself via the same philosophy (as well as others) and who helps many others acquire income properties, I don't understand any of this logic at all.
If you are able to cash flow on an income property, it's never a bad time to buy. If you aren't up to the task of property management, outsource it!
As a long-term holder, I don't personally care if the market goes down further, just like I don't care that in March, my IRA lost quite a bit on my riskier stocks, why? Because just like my IRA bounced back last month and provided me a net positive for the year already, I know my home ownership investments are going to bounce back too.
Last edited by llowllevellowll; 05-17-2011 at 09:59 PM..
Parti Home ownership is not one anyone should walk into blindly nor is it a decision that should be made by asking the advice of a realtor. It is a very personal one. I believe in homeownership but it shouldn't make anyone broke. Just want people to make sound decisions. Nothing wrong with renting either. Of course REagents don't advocate for renting as they won't make any $$$.
I just don't think this is the right time for people to go out a buy. I'm more about saving and buying when the time and or situation makes sense.
I agree with what the other posters are saying. You ARE definitely throwing money away on rent. There is no upside to it unless you know for sure that you're not staying around long. If your plans are to stay in the long run, then buying still makes more sense. At least to me.
Even in a declining market? I'm not saying that buying didn't make sense pre-crash.... but, does it now? I mean, if you are 100% sure you're not gonna move anywhere, yeah... it's a good plan.
But... most of the people I see freaking out and buying are ones who are transferring to brand new locations. It's odd.
Quote:
Originally Posted by bayarea-girl
Meh_, I can't imagine buying something now and watching the price go down. Wondering why I didn't wait to buy. When things level out it would be a better time to buy especially if your purchase is not the forever one and you can't get back what you paid for it.
If I were in your area, I'd agree 100%.
If I were moving to MY area, I'd rent first, then buy when I found something perfect.
I know my area. We will buy a larger home... probably this year.
But... I know we aren't gonna move, and I know that RE is not gonna sink much more around here.
Otherwise? If I didn't own this place already, I'd rent.
Quote:
Originally Posted by Chuckity
Those amounts were a direct comparison on what each property fetched (not would fetch or could fetch - did fetch) on the rental market and what they are (not maybe could sell for) selling for.
If someone had a definite plan to move in 2-3 years, I wouldn't advise purchasing in my market. It's not something I would've advised in 1993 or 2003 - and most likely I won't be advising in 2013.
Would you advise anyone who wasn't gonna stay put for more than 5 years to buy now? Absolutely, positively? I think it depends on the deal, yanno?
Quote:
Originally Posted by VickiR
Renting is paying a mortgage...someone else's!
Vicki
That you get to walk away from in a year or two... and not have to sell.
I'm all for buying wisely... I just don't think people really are.
You and I live in the same area, Vicki. I know prices are good here lately for what you can get.
But....
All the relos that buy a house before they even come to visit? They're crazy.
Parti Home ownership is not one anyone should walk into blindly nor is it a decision that should be made by asking the advice of a realtor. It is a very personal one. I believe in homeownership but it shouldn't make anyone broke. Just want people to make sound decisions. Nothing wrong with renting either. Of course REagents don't advocate for renting as they won't make any $$$.
I just don't think this is the right time for people to go out a buy. I'm more about saving and buying when the time and or situation makes sense.
I help clients find rentals for free (as in, I don't accept rental commissions from landlords), so I don't really like the idea that my opinion is somehow overshadowed by the fact that I sell real estate for a living.
Aside from being a real estate agent, I'm a person just like you.
I just happen to be someone who invests part of his portfolio in the long-term holding of real estate investments - think of it just like any other stock.
If you're continually buying and selling an investment, you're probably going to lose money. It doesn't make any real sense.
If you're shopping for a home for yourself and are waiting for the home that knocks you off your feet when you walk in, that's certainly one thing and you're right, that's very personal.
But you said, quite matter of factly, in your previous post that right now wasn't a good time to buy.
That's just not true. Could there be better times to buy? Of course! Could there be worse times to buy but you'd be happier since you fell in love with a particular property? Of course!
But in an apples to apples comparison, it's often times very difficult to make the argument that renting is financially more prudent than owning, especially if you're a) in a buyer's market of any sort, and b) a long-term hold, or any combination of the two.
My townhouse wasn't very expensive, not according to my budget. It's an even better deal now that I have the combined power of my income and my husband's income.
We are planning to buy soon, but that's beside the point.
I'm not even selling my townhouse. I'm going to rent it out. Yanno what else? I may not even make a profit renting it, but I don't care. It really is in a great location. I think I might let my son rent it when he's ready to move out.
I'm thinking more of the sheer volume of people on here every day that wanna buy a house in a place they've never been (or have been to once or twice) because they think they're supposed to buy instead of rent, and they have no idea wtf they're doing.
It's mind-boggling.
What is wrong with renting for awhile until you get the feel of a place and get to know the local market? What's wrong with renting until the market stabilizes and you can feel relatively confident that you're not being shackled to a house?
It is so strange.
We leased a car not too long ago. It's a plug-in hybrid. Normally, we would not lease a car. But, with new technology and with lease incentives, the lease was SO much better than the purchase. In 3 years, we get to see if the technology has improved. If it hasn't? We can buy the car.... and we aren't losing money. It's a smart move, given the circumstances.
If we were looking at a known entity? We would've bought the car.
I apply the same logic to buying a house right now.
If I moved to another state? No way in hell would I buy a house without renting for awhile first.
And I have kids, so the "but, people with kids NEED to buy a house" thing doesn't wash with me.
Kids need their parents, a decent roof over their heads, clothes on their backs, and food in their bellies. They do NOT need a brand new house every time dad takes a transfer out of state. Not in this economy.
That is all I'm thinking about. Big picture stuff. None of this is personal for me, really.
I typically agree with a lot of what the OP (and Bayarea girl) says, but I'm not really sure where the anti-ownership logic lies. It doesn't make any real sense.
It's like any other investment: continually buying and selling stocks will be a net loss if there isn't significant appreciation since you're charged trading fees, but long-term hold investors will always make money in the stock market.
Are you throwing money away by renting? Are you throwing away money by renting furniture? Appliances? I guess it depends on your view point, but in the long run? Yeah, you are throwing a certain % of money away - you'll never see it again and it's not possible to build equity by living in someone else's home. All you're doing is building their equity - why do you think they're renting it to you?
One comment that confused me was when the OP talked about selling a house not being a good investment when you re-sell in a couple of years.
What? Why would you buy with the understanding that regardless of market movement you were going to sell? Shouldn't you go into the investment knowing when your break-even point will be without considerable appreciation?
These are facts consistent with any market. If investment makes someone that nervous, maybe investing isn't for you.
As someone who came from a family that began building long-term wealth via landlording and whose made a retirement plan for himself via the same philosophy (as well as others) and who helps many others acquire income properties, I don't understand any of this logic at all.
If you are able to cash flow on an income property, it's never a bad time to buy. If you aren't up to the task of property management, outsource it!
As a long-term holder, I don't personally care if the market goes down further, just like I don't care that in March, my IRA lost quite a bit on my riskier stocks, why? Because just like my IRA bounced back last month and provided me a net positive for the year already, I know my home ownership investments are going to bounce back too.
Nah... you got my basic point, Parti.
It is people not knowing their break even point, or even trying to figure it out, that gets me.
It's the rush to "buy because renting is bad" thing that gets me.
My townhouse wasn't very expensive, not according to my budget. It's an even better deal now that I have the combined power of my income and my husband's income.
We are planning to buy soon, but that's beside the point.
I'm not even selling my townhouse. I'm going to rent it out. Yanno what else? I may not even make a profit renting it, but I don't care. It really is in a great location. I think I might let my son rent it when he's ready to move out.
I'm thinking more of the sheer volume of people on here every day that wanna buy a house in a place they've never been (or have been to once or twice) because they think they're supposed to buy instead of rent, and they have no idea wtf they're doing.
It's mind-boggling.
What is wrong with renting for awhile until you get the feel of a place and get to know the local market? What's wrong with renting until the market stabilizes and you can feel relatively confident that you're not being shackled to a house?
It is so strange.
We leased a car not too long ago. It's a plug-in hybrid. Normally, we would not lease a car. But, with new technology and with lease incentives, the lease was SO much better than the purchase. In 3 years, we get to see if the technology has improved. If it hasn't? We can buy the car.... and we aren't losing money. It's a smart move, given the circumstances.
If we were looking at a known entity? We would've bought the car.
I apply the same logic to buying a house right now.
If I moved to another state? No way in hell would I buy a house without renting for awhile first.
And I have kids, so the "but, people with kids NEED to buy a house" thing doesn't wash with me.
Kids need their parents, a decent roof over their heads, clothes on their backs, and food in their bellies. They do NOT need a brand new house every time dad takes a transfer out of state. Not in this economy.
That is all I'm thinking about. Big picture stuff. None of this is personal for me, really.
You know, your current posts are quite a bit different from your original post. lol
You're saying things now that are very easy to agree with, and I do agree with a lot of what you're saying now.
But notice how you didn't put these expanded thoughts in your original post? You were quite a bit more broad in your OP, and I can definitely see why a few persons were perplexed by the post (I know I was )
Yeah, if you're unfamiliar with where your investment is best placed, or you're about to move elsewhere (unless it's an income property), you're much better served by renting first.
I think we all thought you were implying something a little bit different.
You know, your current posts are quite a bit different from your original post. lol
You're saying things now that are very easy to agree with, and I do agree with a lot of what you're saying now.
But notice how you didn't put these expanded thoughts in your original post? You were quite a bit more broad in your OP, and I can definitely see why a few persons were perplexed by the post (I know I was )
Yeah, if you're unfamiliar with where your investment is best placed, or you're about to move elsewhere (unless it's an income property), you're much better served by renting first.
I think we all thought you were implying something a little bit different.
I'm thinking more of the sheer volume of people on here every day that wanna buy a house in a place they've never been (or have been to once or twice) because they think they're supposed to buy instead of rent, and they have no idea wtf they're doing.
Agreed. Too bad for them. But this is not how your original post sounded. you are talking about different things now. nobody would argue that stupid investment without good knowledge of the market are good.
To your point, you're definitely right that not all buyer's are purchasing wisely even in a buyer's market.
I don't have any prime examples because a lot of my clients are of the investor-variety and they're pretty calculated in their decisions, but I know that somewhere, some goofy American is making a silly investment of some kind!
I've seen a lot of ridiculous buys and sells in the stock market of late.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
)
