Are you okay with renting or do you get sad about it sometimes? (401k, poor)
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I was a homeowner for 24 years. Everywhere I live rent is substantially higher than a mortgage payment and I have equity to use, so I do it. Right now I'm renting out the home i own and renting in another town where I work.
Knock on wood, my tenant has had no issues and I am pretty much riding on that. I really like renting. I like having neighbors (We are having brunch on the lawn on christmas day. Awesome!) I like the convenience, I like the low maintenance. I don't like the crappy kitchen cabinets or the rusty front door. I also have to rent a storage unit because there isn't enough space here. And my rent is more than 30% of my income. Luckily I make extra each month on renting my house so it's working out.
I'm a teacher so my summer project is to sell that house and find somewhere else to live here. Preferably with a lower monthly burden and a smaller down payment so I can invest some of my equity in something else.
At the end of 10 years of renting, you have nothing. At the end of 10 years of home ownership, you have equity. That is pretty much the bottom line and I do worry for my future since I am older and alone. I understand you have to "fix" stuff in your own home. But given the cost of most rentals (and I don't mean renting from some lady whose kid has gone off to college and she is filling the spare room, but rather market rents).
Again, I can only speak for South Florida, though.
You don't need to stay in a house the rest of your life (although that would be my choice given my age).
I was a homeowner for 24 years. Everywhere I live rent is substantially higher than a mortgage payment and I have equity to use, so I do it. Right now I'm renting out the home i own and renting in another town where I work.
Knock on wood, my tenant has had no issues and I am pretty much riding on that. I really like renting. I like having neighbors (We are having brunch on the lawn on christmas day. Awesome!) I like the convenience, I like the low maintenance. I don't like the crappy kitchen cabinets or the rusty front door. I also have to rent a storage unit because there isn't enough space here. And my rent is more than 30% of my income. Luckily I make extra each month on renting my house so it's working out.
I'm a teacher so my summer project is to sell that house and find somewhere else to live here. Preferably with a lower monthly burden and a smaller down payment so I can invest some of my equity in something else.
You make some interesting points. I am not very social - I don't even like running into people when I go to get the mail or their large dogs (I am afraid of large dogs). I think for an introverted person apartment (or condo) life can be less enjoyable than it is for a social person.
No I don't feel bad about renting. I guess some people see it as less than...but I think a lot of people rent these days just because things are so expensive these days. Renting is just easier if you don't want to take care of a property.
Sure I'd like to own one day, but I think I'd get bored in the same place for so long.
I guess because I have experienced both (like many of you). To me, there is just no comparison, even aside from the financial aspect of home ownership.
But I need to make peace with it because at my income level I will never qualify for a mortgage. I am kind of too old to start something new, but too young to move into a "senior community", which are generally far more affordable.
No I don't feel bad about renting. I guess some people see it as less than...but I think a lot of people rent these days just because things are so expensive these days. Renting is just easier if you don't want to take care of a property.
Sure I'd like to own one day, but I think I'd get bored in the same place for so long.
I don't think people should feel bad about renting. I lived in more expensive areas where I never thought I could afford to buy so I was fine and at least i had a roof over my head and could take care of myself. My parents always said if I needed a place to live i could live with them.
I'm not bored and I had to move 2 hours from friends and from places I like to go, but i am so happy with my own home that it's all a wash. It's a great feeling to have a place where you live by your own rules and no one can tell you that you have to move. It's a great feeling to own a home and be a property owner. I have no need to impress anyone, I see a rental or a home as a place to live and a car as transportation. I'm grateful for what I have.
At the end of 10 years of renting, you have nothing. At the end of 10 years of home ownership, you have equity. That is pretty much the bottom line and I do worry for my future since I am older and alone. I understand you have to "fix" stuff in your own home. But given the cost of most rentals (and I don't mean renting from some lady whose kid has gone off to college and she is filling the spare room, but rather market rents).
Again, I can only speak for South Florida, though.
You don't need to stay in a house the rest of your life (although that would be my choice given my age).
no that certainly ain't the bottom line . a renter can have far more equity in other investments .
i easily could have bought another home back in 2003 . we kiss the ground that we didn't . we invested that money in a real estate venture in manhattan instead . so we rented since then , and we can buy many homes today with the way the investments panned out .
this " ALL renters "got nothing mentality is a load of crap ... renters span from the very poor to the very rich .. they all have different choices and resources to grow wealth with . it is not just black and white , like you can pay rent for 10 years and have nothing to show for it .
the real question is "if you don't invest in a home " where did you invest ?
if the answer is no where then yeah , a renter has nothing but if they deployed the capital elsewhere rather then a home , they may have surpassed the homeowner by a huge margin in growing wealth with that money .
in fact we own investment co-op apartments in a very prestigious building in manhattan on central park south .
that is what we did with the money we would have sunk in to a house . we had rent stabilized tenants in our apartments who chose not to buy when the building went co-op in the 1980's .
most of them just were happy living in this nice building across from the park and either put their money in to buying a business or investing elsewhere . quite a few were worth more than we were . so if anyone thinks of rent stabilized tenants as poor you can be sadly mistaken .
we bought out 7 of the 9 leases for 100k each as these renter / boomers were in such fine financial shape they decided to take the money , retire and move a bit earlier ..
there are so many renters with lots of wealth and choices of whether to buy or plunk the money elsewhere . people are selling real estate all the time or business's and have lump sums of money and choices . others get inheritances or win law suits , life insurance , equity investments , etc . so people who rent are not all poor who have no money to invest if they rent or have no choice as far as buying a home or plunking that money to work for them elsewhere .
about 25% to 40% of all home sales are all cash deals depending on the year . that means there are alternative choice for those who want to rent and are inclined to invest that money elsewhere .
Last edited by mathjak107; 12-22-2018 at 02:21 AM..
So you made your money in Real Estate, like many do. Yes, the stats on home sales being cash does not surprise me with so many investors picking up properties.
Your thread sounds as if I have offended somehow. The premise of my thread was simply that it is my dream to own a home as I am unhappy renting, but will never be able to be a homeowner given my age and income (kind of too late to start over). I never once said or meant to imply any stereotypes about renters.
I don't live in a place as expensive as Manhattan. Where I live, it is simply cheaper to buy than rent (with other things being equal such as the neighborhood). It makes me sad that my money is thrown away each month, yet I don't make enough to buy. Sorry, I know that is whining...just venting, I guess.
There are no rent-stable buildings here that I am unaware of. I don't think Florida has such a thing. Maybe in senior communities?
So there is more to owning a home than building equity and calling a place yours.
Even if you got all those financial benefits (tax benefits etc), you still are responsible for it and if you do not want to spend time mowing lawn, shoveling, repairing things, calling in service people to service your furnace, etc, and sometimes you just do not want to - neither timewise nor energy-wise.
If you dont want to do all that work, there is no law that says you MUST own a home. Thats the reason for an apartment.
If you need to leave the house/apartment for some reason (job change, undesirable neighbors, etc) in an apartment you have the freedom to leave when your lease is up, but a home is harder to leave.
I guess to see if you would enjoy doing all that work, rent a home where you have to do that as part of your rent.
If i had a family and had to raise kids in the home or apartment, i would feel different perhaps. I'd have help to do that work..and then maybe i'd want a home to raise kids in.
We've gone over this over and over again. If it was, then landlord's would go out of business. Instead, real estate is one of the best ways to become wealthy. Long-term, it is much better financially to own. The longer we are talking about, the better owning is.
If for no other reason than the mortgage stays the same and then stops, owning is better. Renting only goes up in cost and NEVER stops. Even if you don't take into account selling the home, you are better off owning.
It is very basic math. If the landlord is paying for EVERYTHING you would have to pay for to own and still coming out ahead, you are paying more than owning.
You can talk about repairs, maintenance, roof replacements, vacancy, real estate taxes, closing costs, and on and on all you want, but guess what, the landlord pays for all those AND STILL COMES OUT AHEAD.
Yes, there are specific exceptions, but the vast majority of people will be better off owning.
If the choice is to rent house A for 10+ years, or buy house A, then you are likely correct. If you are saying you cannot find a rental that is cheaper than owning a home, you are dead wrong.
That is because you do not look at the many intangibles. If a renter only bought (i.e. rented) what they needed, when they needed it, where they needed it, it would be WAY cheaper to rent. Rent a studio apartment close to work when you are single. If you get a roommate in a few years, then get a 2-BR. If you have kids later, then get a 3-BR apartment.
Instead of doing yard work, a renter can take a part time job or work overtime at their real job. Put that money in the bank. Instead of a 45-minute commute, live closer in a rental and take a 5-minute commute and put the transportation money in the bank.
The ability to move and be flexible on housing needs is very much in the renters favor.
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