is it OK to rent "forever"? (San Jose: renters, condominium)

[Perma Bear]

Originally Posted by silverkris

So how did you do it, and where?

I bought as close to where I live as I can. It’s a condo in one of the better inner Bay Area cities. I’m
Sad it’s not the peninsula but that’s okay. I’ll probably inherit anyway. After a year I’ll rent it out and go back to saving as much as I can.

[silverkris]

Originally Posted by Perma Bear

I bought as close to where I live as I can. It’s a condo in one of the better inner Bay Area cities. I’m
Sad it’s not the peninsula but that’s okay. I’ll probably inherit anyway. After a year I’ll rent it out and go back to saving as much as I can.

Good for you - you finally buckled down and did it!

[joliefrijole71]

I'm for it too! I was born and raised in NYC all of my life, growing up in an apartment. I'm ok with a small cottage if it had to be a house or a mobile home. But then, there's the extra costs of property tax, repairs, homeowners insurance, etc that I'm happier with less financial responsibilities. I have enough as it is.

[Mister 7]

Originally Posted by joliefrijole71

I'm for it too! I was born and raised in NYC all of my life, growing up in an apartment. I'm ok with a small cottage if it had to be a house or a mobile home. But then, there's the extra costs of property tax, repairs, homeowners insurance, etc that I'm happier with less financial responsibilities. I have enough as it is.

If you live in NYC then yes, homeownership will be very, very expensive...

But just so you know, owning a home has the insurance and tax built into the mortgage payment....and most of the time you're paying a lower payment than rent.

My mortgage is $50 cheaper for a really, really nice house than the rent for a townhouse I was in previously.

Plus, your payment stays the same for 30 years, never rises with inflation. 20 years into it $XXXX amount is way cheaper than it was the day you closed.

I get it, I lived in Los Angeles, some people are fine renting their whole lives because homeownership is so expensive.

I just couldn't do it any longer. We spent over 50k in rent in 2 years. Fifty grand is a ton of money, just gone, in a landlord's pocket.

I'm just a few years into a mortgage and due to our smart buying and the booming market here now, already have about $80,000 in equity.

That's basically like money in the bank (that you don't want to spend).

[IdahoanAgain]

I guess you need to figure out how much rent vs a monthly mortgage payment is. If the rents are comparable to mortgage payments then you have to add in utilities and upkeep. Then add in amenities and upkeep of those. If a good housing deal falls into your lap then you would be foolish to ignore it. The home owning idea is that you buy in your youth while your health is vigorous and money flows through your wallet so that by the time your earning power has decreased or stopped you have your house fully paid off and can relax and focus on enjoying what is left of your life in ease of worry and expense. Really, though, you can rent all of your life, if you can afford to retire in luxury.

[Mister 7]

Originally Posted by IdahoanAgain

I guess you need to figure out how much rent vs a monthly mortgage payment is. If the rents are comparable to mortgage payments then you have to add in utilities and upkeep. Then add in amenities and upkeep of those. If a good housing deal falls into your lap then you would be foolish to ignore it. The home owning idea is that you buy in your youth while your health is vigorous and money flows through your wallet so that by the time your earning power has decreased or stopped you have your house fully paid off and can relax and focus on enjoying what is left of your life in ease of worry and expense. Really, though, you can rent all of your life, if you can afford to retire in luxury.

That's the goal. I was late to the party....35 when I bought my first home. But it'll be nice and paid off right at 65-- retirement age, if not sooner.

I couldn't imagine renting my whole life, even if I could still afford a decent retirement. I just have this thing about throwing money away.

[AA702]

Sometimes people do not consider the costs of ownership and they end up broke fixing the house that they bought. When its an older house and they are unable to do the repairs themselves it can get costly.

[Mister 7]

Originally Posted by AA702

Sometimes people do not consider the costs of ownership and they end up broke fixing the house that they bought. When its an older house and they are unable to do the repairs themselves it can get costly.

I think that can be avoided for the most part, unless someone is just a stupid consumer.

You get a thorough inspection of the house you're buying (don't skimp on this part), and I wouldn't be looking at some old old house to buy in the first place.

[allison7]

If it's all you can afford, it's not throwing money away. You have to pay for a home to live one way or the other, and some people like renting because they don't like the expense, maintenance and responsibility that comes with home ownership. I would avoid older homes in need of repair. You can be hit with many surprises.

I scrimped, saved, and bought a brand new townhome a few years ago. I love it, maintenance is minimal, and the equity I have now is the best part.

[BugsyPal]

Originally Posted by RoadLessTraveled2015

Is renting forever in the Bay Area throwing money away? Is there anything wrong with renting forever?

Long as you accept fact that by renting you have no real control over your housing destiny, then no, there isn't anything wrong with being a long term renter. Main thing is absent ownership of a house/home/apartment to use for retirement "savings" (and I use that term loosely), you need to be investing/saving for retirement with a solid plan.

What happens to many renters is they reach late middle age and or their senior/elderly years not only having low savings/income/investments, but facing a housing market (renting) that they cannot control. Unless the apartment in question falls under some sort of rent control laws, is subsidized by federal and or local government, that is pure market rate then you'll forever be at the mercy of a landlord.

Awhile back a very elderly lady out in California ( think she was > 80) faced eviction from her long term home because LL wanted her out (think property was going to be or had been sold), and there wasn't much anyone could do.

Now if you have savings/investments then when or if time comes to pack up and move, you are able to go where your budget allows. If you have *nothing* or meager savings and basically reliant upon SS alone, then your housing choices in later years are likely to be grim.

For the record it has been proven time and time again investing in the S&P 500 gives far better returns than home ownership. This even factoring in periods of economic recessions or other upheavals. So again being a long term renter isn't an issue; just build a nice nest egg for retirement and rainy day fund.