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Old 04-11-2021, 10:52 PM
 
7,275 posts, read 5,522,633 times
Reputation: 9462

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Quote:
Originally Posted by Libertyforever12 View Post
You show no understanding of opportunity cost in your original post. Let me go back to the basics.
Lol, again, my post is what it is, you have absolutely zero knowledge of the opportunity cost associated with anything I wrote.

If you actually read the this thread, you would see where it is implied when speaking of "rent vs own", it is an apples to apples decision, meaning the same/similar house. Not renting a one bedroom apartment somewhere for $500/mth, or buying a $500k home.



Quote:
Originally Posted by Libertyforever12 View Post
This is like arguing if I buy this candy, I would have this candy. If I don't buy this candy, I have no candy. Have the candy is better than no candy, thus buying the candy is better than not buying the candy.
Actually, I am arguing when making a rent vs own argument, it needs to be an apples to apples comparison. Instead, the poster I am responding to is saying how much better it is to rent, but then reveals it is because the house they owned cost a whole lot more. Well duh, no kidding it cost less to pay less rent for a lesser home.

Quote:
Originally Posted by Libertyforever12 View Post
This above is a stupid argument because you are only looking at having the candy vs no candy, while ignoring the money you spent on the candy. If you don't buy the candy, you can spend the same amount of money on something else.
Again, not making the argument, again, go read the thread because it appears you still have not, or have not comprehended it.

The poster I am responding to is making the claim renting is better, but fails to reveal at the moment that it is better because they are renting a much lower cost apartment than the home they were in. That is not even close to a basic rent vs own argument, it is not comparing the same homes at all. That is like debating what is cheaper, leasing a Corolla, or buying a Lexis.

Quote:
Originally Posted by Libertyforever12 View Post
In the above quote my you, if you want to incorporate opportunity cost, it would be something like this:

If I was renting, I would have to make the rent, but I would have other investmets which I won't have if I spent my capital on the house instead. Depends on what my other investmets are, it may generate return more or less than the rent I am paying. So I may be better or or worse off as a renter vs a buyer of a house.
Ah, but see, I am not arguing rent vs own, so your example is moot.

But to address your example; your example is implying all things equal, the two homes, one to rent, one to buy, are equal in cost to the person. So the argument is "better to buy it or lease it". That is fine, but the poster I responded to did not have two similar homes, was not an apples to apples comparison, the poster sold a home that was costing him much more per month than the apartment, was worth much more than the apartment. I mean no duh a person is going to save money renting a place at a much lower cost.

I am not arguing this, I am arguing the rent vs own is an apples to apples comparison, not apples to oranges. has nothing to do with your constant "opportunity cost" argument, it is not part of the discussion at all.

So if I sold now and went to rent a one bedroom condo, my monthly cost of course will be lower, however, the condo is 630 sqft and is valued at $250k, while my house is 2500 sqft and is valued at 2.2 million. SO why in the world would I use this as a basis to compare what is better, to rent or own? Makes zero sense.
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Old 04-11-2021, 11:22 PM
 
Location: Round Rock, Texas
12,317 posts, read 12,174,101 times
Reputation: 16897
Quote:
Originally Posted by Airborneguy View Post
I agree with you that people over 60 or so, flush with home sale cash, have a serious decision to make. Buying might not be worth it at that point. But even then, a smart purchase can appreciate a lot in the 15-20 years that a 60 year old should have left.
Yup, I'd be one of those people who plans on renting after selling our current family home. My aim is to retire at 62, and when I do, we plan on selling our home and not tie our funds up in another home. If things work out, we'd be renting a one or two bed condo, bayfront or oceanfront, on the Texas coast....though Muskie and his Starbase plans may make it more expensive than we'd care to spend lol.

My reasons for renting at that age are:

Don't want to be tied down to one location.
Don't want to deal with home maintenance.
Yes, I know we'd be footing the landlord's property taxes, but I still don't want to directly be on the hook for property taxes.
Want little encumbrances and a home is an encumberance.
At that age and with the proceeds from the current home, appreciation and such just wouldn't matter much to me. Equity isn't anything tangible until you sell (unless you borrow, of course) and I don't want to deal with selling a home.
Our kids will likely have their own homes.

I've been a homeowner since I purchased my first condo at 21. I felt (and still do) feel homeownership is the right path for me. That being said, as a senior, I don't think I'll feel the same way and will definitely see the positives in renting. Being able to move freely and not be committed for years to a particular location is very liberating. I'm pretty bent on living by water (hubby believes in 'happy wife') but if for some reason it doesn't turn out as planned, we wouldn't have to worry about selling a property. We'd just wait until the lease is up and move. Likely we'll have far less stuff too since we wouldn't be living in a 3700 sq ft home anymore. We also wouldn't be dealing with all the upkeep of a half acre lot either.

There are positives in both renting and owning and sometimes it depends on where you are in life.
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Old 04-11-2021, 11:28 PM
 
32 posts, read 9,080 times
Reputation: 85
Quote:
Originally Posted by k350 View Post
It will be nice here in a few years when my home is paid off, I will have all that money to do whatever with. If I was renting, that rent would be continuing forever. Aside from having the home with no mortgage, I have the equity in it, over double from what I paid, sitting around $2.2 million now. If I was renting, the owner would not only be paying off the mortgage with the rent, but also have all the equity, and I would still be having to make the rent.
I had to go back to this post. What you said in this post had nothing to due with the apple to orange comparison you claimed. It completely exposed your lack of understanding regarding on opportunity cost. I am trying to see if I can give you the benefit of the doubt but I just can't.
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Old 04-11-2021, 11:32 PM
 
Location: Round Rock, Texas
12,317 posts, read 12,174,101 times
Reputation: 16897
Quote:
Originally Posted by NORTY FLATZ View Post
I suppose the nice thing about owning, is that you can pay it off. Then, it's just upkeep and taxes (and other ancillary costs.)

Once you have no payments, it DOES open up other choices...

Renters never "pay it off" so they're robbed of the feeling of accomplishment.

That's gotta be a real bummer. Work your whole life, and still get spit on by a landlord...always wanting more.
I honestly don't care about whether our home is paid off or not. Since we purchased this home (and it was more expensive) when we were in our thirties, in all likelihood it won't be paid off when I want to retire. I've accomplished other things in my life and paying off a home loan isn't really that big of a deal to me. Buying my first piece of real estate a few years out of high school and after working lots of hours to get the downpayment was a bigger deal to me.

By the time we sell the taxes and ancillary costs are going to be substantial as well. Heck, they pretty much already are. If Austin, Texas area continues to be red hot, the taxes may be equivalent to a mortgage for some.

And not every renter has such a horrid experience with a landlord, where they feel that they are 'spit on'...my friend is a lifelong renter, who has lived in her duplex for decades. She's had nothing but a great relationship with her landlord.

Like I said, there are pros and cons to renting. My husband has never cared about owning..and this isn't a guy who is a slouch in life either. He does pretty well for himself...it's just that owning a home was never something he cared much about. Meeting me changed that, but even now he's along for the ride, lol. Each individual is different as to what their priorities are. Not owning wouldn't rob my husband of a feeling of accomplishment because he gets accomplishment in other ways, ways that are particularly important to HIM.
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Old 04-12-2021, 12:31 AM
 
7,275 posts, read 5,522,633 times
Reputation: 9462
Quote:
Originally Posted by Libertyforever12 View Post
I had to go back to this post. What you said in this post had nothing to due with the apple to orange comparison you claimed. It completely exposed your lack of understanding regarding on opportunity cost. I am trying to see if I can give you the benefit of the doubt but I just can't.
Incorrect. I stated "I", "I" being the key word.

I did not mention anything about other people, everyone, nothing, I said "I"...


"It will be nice here in a few years when my home is paid off, I will have all that money to do whatever with. If I was renting, that rent would be continuing forever. Aside from having the home with no mortgage, I have the equity in it, over double from what I paid, sitting around $2.2 million now. If I was renting, the owner would not only be paying off the mortgage with the rent, but also have all the equity, and I would still be having to make the rent."

What part of this post addresses anyone other than myself? Where did I compare anything? It is a fact, if I were to continue to rent, I would still be paying rent.

It is a fact that I have the equity in it, and that the mortgage is paid off.

It is now sitting at double what I paid, an equivalent home rents for around $8k/mth guestimate, which is significantly higher than my mortgage by thousands a month. If I was renting this place, the owner would be paying much less than what he is renting it for, just as the rent I collect from my condo is about $1500/mth more than the mortgage is for it.

It is a fact that if I was renting my home, I would still be renting and paying out $8000/mth, and the owner would have done paid it off. The owner also would have the equity in it, I would not. What is the issue you have with this?

I am having trouble understanding what issue you have with my post. Most importantly, I wonder why you keep harping on opportunity cost, when it is obvious when it comes to homes, whether renting or buying, there are numerous intangible benefits to consider, there are these benefits to consider when making the decision to rent or own. But I was not discussing costs, benefits, none of that, merely addressing to the other poster why when making the claim they did regarding rent vs own, they are not mentioning up front that this includes a much lower cost apartment, and now tossed in it is a rent stabilized apartment. It is not an apples to apples comparison the poster first implied.
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Old 04-12-2021, 01:14 AM
 
87,940 posts, read 85,664,894 times
Reputation: 63434
Quote:
Originally Posted by NORTY FLATZ View Post
I suppose the nice thing about owning, is that you can pay it off. Then, it's just upkeep and taxes (and other ancillary costs.)

Once you have no payments, it DOES open up other choices...

Renters never "pay it off" so they're robbed of the feeling of accomplishment.

That's gotta be a real bummer. Work your whole life, and still get spit on by a landlord...always wanting more.
Again , a nonsense assumption and statement that does not apply to all ..

Where we live is transparent to a landlord ...it is 320 apartments in the two buildings ...we never even see the owners nor do they control our rent .

Renting has allowed us the ability to grow more wealth than most homeowners ever see simply because we got to deploy the money no longer in a home elsewhere
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Old 04-12-2021, 03:48 AM
 
87,940 posts, read 85,664,894 times
Reputation: 63434
The biggest problem with the idea that after the mortgage is paid off you have money to invest is you lost the biggest friend you have in investing and that is time .

The shorter the time frame you allow the more pressure you put on a shorter time frame to produce good results ...

It would suck finally paying off the mortgage as a priority and up there in age , only to now hit the lost decade for stocks ...

So Channeling more than you should in to a non liquid investment like a house at the expense of other investing can be hurtful to the growth of wealth and not helpful..

Time makes even poor markets work out just fine so losing time is not a good idea , especially when you already have the appreciation locked in on that house ...

Hypothetically one would have given up 56% since last March , almost 20% average annual return the last 3 years , 18% cagr the last 5 years , 15% cagr the last 10 years ,in a simple index fund with any extra money they paid towards a mortgage to save 3 or 4%.

Our real estate venture was far more lucrative than even equities were.

So that money generated by a renter with the choice of buying another house or renting and investing that lump sum grew a lot of wealth despite having some higher housing costs maybe.

Remember buying now resets that expense pointer and you can easily be spending more for housing buying today and giving up that growth in other investments too .

So all this nonsense about renters having nothing is just bull as a general statement ...most renters are renters because they have no choice or even money to buy so many always had and will have nothing ....but that does not mean those with choices didn’t do far better as renters when looking at housing costs and opportunity for that money not tied up in a house

Last edited by mathjak107; 04-12-2021 at 04:24 AM..
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Old 04-12-2021, 07:58 AM
 
Location: East Coast of the United States
21,479 posts, read 22,638,466 times
Reputation: 17892
Quote:
Originally Posted by mathjak107 View Post
So all this nonsense about renters having nothing is just bull as a general statement ...most renters are renters because they have no choice or even money to buy so many always had and will have nothing ....but that does not mean those with choices didn’t do far better as renters when looking at housing costs and opportunity for that money not tied up in a house
If you are okay with renting an apartment, then rent an apartment. If you want to own and live in a house, then own and live in a house.

That is the bottom line and the way I see it. Life is about choices.
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Old 04-12-2021, 08:04 AM
 
32 posts, read 9,080 times
Reputation: 85
Quote:
Originally Posted by NORTY FLATZ View Post
I suppose the nice thing about owning, is that you can pay it off. Then, it's just upkeep and taxes (and other ancillary costs.)

Once you have no payments, it DOES open up other choices...

Renters never "pay it off" so they're robbed of the feeling of accomplishment.

That's gotta be a real bummer. Work your whole life, and still get spit on by a landlord...always wanting more.
I get that some people have that feeling of accomplishment, but not everyone do. Some people are more logical.

Renting is no different than any other producer/consumer transactions. I really hope you don't have the feeling of getting spit on by the seller whenever you purchase grocery, electricity, water utilities, internet service, clothes, gasoline,and etc. Technically, you can try to produce everything by yourself, but that is not how modern society works. Our high standard of living is build upon us making transactions with others. If you do have the feeling of being spit on by the seller, I really suggest you go see a psychiatrist.
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Old 04-12-2021, 08:08 AM
 
87,940 posts, read 85,664,894 times
Reputation: 63434
Quote:
Originally Posted by BigCityDreamer View Post
If you are okay with renting an apartment, then rent an apartment. If you want to own and live in a house, then own and live in a house.

That is the bottom line and the way I see it. Life is about choices.
except many dont have choices because they lack the resources to buy , while still others dont realize they have choices..

this renters are losers thing and renters are throwing away money statements can take someone who really does not want to own and has resources to buy or invest but they are brow beat in to thinking buying is the only way from these one size fits all comments we keep seeing .
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