is it OK to rent "forever"? (Tracy, Fortuna: hardwood floor, apartment complex)

[neutrino78x]

Originally Posted by Mister 7

Wonder if that would be the same today?

I don't know one person who does that, and it would be next to impossible to do out there in coastal CA. Unless you're just super wealthy, and in that case one could probably afford to buy something.

In my case, I just can't afford to buy out here, but want to live here because this is my home, this is where I grew up (I grew up in Silicon Valley). If ownership was important to me, I'm sure I could move to Trumpville easily enough. Although I wouldn't be able to help my dad out anymore, if I did that. He would be living on the street.

I'm sure there are many others who are renting long term because they wish to live here but can't afford to buy in the area. There's nothing wrong with that. At least not in my opinion.

[Mister 7]

Originally Posted by neutrino78x

In my case, I just can't afford to buy out here, but want to live here because this is my home, this is where I grew up (I grew up in Silicon Valley). If ownership was important to me, I'm sure I could move to Trumpville easily enough. Although I wouldn't be able to help my dad out anymore, if I did that. He would be living on the street.

Gah, the CA elitist BS is so typical and annoying. You know what, actually? Continue to scrape by and never leave California, that's probably the best plan for you. Stay there.

Originally Posted by neutrino78x

I'm sure there are many others who are renting long term because they wish to live here but can't afford to buy in the area. There's nothing wrong with that. At least not in my opinion.

Nothing wrong with it; it's their money and livelihoods they're lining a landlord's pocket with, not mine. I could not care less what people do out there. Just a lot are going to be really screwed when they hit retirement with an apartment they don't own. The most basic asset is real estate.

[80skeys]

Originally Posted by JJonesIII

And backtracking on my individual situation, there's no way a renter would have done better.

Yeah, but did they do any worse?

[llowllevellowll]

Originally Posted by Mister 7

Gah, the CA elitist BS is so typical and annoying. You know what, actually? Continue to scrape by and never leave California, that's probably the best plan for you. Stay there.



Nothing wrong with it; it's their money and livelihoods they're lining a landlord's pocket with, not mine. I could not care less what people do out there. Just a lot are going to be really screwed when they hit retirement with an apartment they don't own. The most basic asset is real estate.

You must have missed the calculations in previous posts where it's actually much cheaper to rent than it is to own in Silicon Valley right now. In places like Knoxville -- it's a different ballgame. Maybe stick to those forums if you're not familiar with the economy here. If, for instance, you're saving $2,000k per month by renting (in addition to the down payment savings), are you really telling me that you wouldn't see them investing those monies elsewhere -- potentially stock portfolios or rental properties?

I'm originally from Ohio, lived in Texas, and have a rental property in Missouri, by the way, so don't take my criticism as some sort of "typical" west-coast liberal elitist BS... just know that you don't have a clue what you're talking about in your last post, and someone commenting on issues they're not familiar with, "Knoxville-splaining" it to us... is probably elitist too, wouldn't you say?

[Mister 7]

Originally Posted by llowllevellowll

You must have missed the calculations in previous posts where it's actually much cheaper to rent than it is to own in Silicon Valley right now. In places like Knoxville -- it's a different ballgame. Maybe stick to those forums if you're not familiar with the economy here. If, for instance, you're saving $2,000k per month by renting (in addition to the down payment savings), are you really telling me that you wouldn't see them investing those monies elsewhere -- potentially stock portfolios or rental properties?

I'm originally from Ohio, lived in Texas, and have a rental property in Missouri, by the way, so don't take my criticism as some sort of "typical" west-coast liberal elitist BS... just know that you don't have a clue what you're talking about in your last post, and someone commenting on issues they're not familiar with, "Knoxville-splaining" it to us... is probably elitist too, wouldn't you say?

Lol you're completely wrong about what I was saying and what I know. Of course it's cheaper to rent in Silicon Valley...my god, a shack costs 2 million dollars there. I'm quite aware of how California is, I lived there.

My point is the ordinary average Joe out there paying insane rent, they all have extra thousands to put into the stock market to offset never being able to buy a house? Lol. No, they're going to end up at retirement with nothing to show for it other than an apartment they don't own.

Glad to "Knoxville splain" stuff if it helps you.

[JJonesIII]

Originally Posted by 80skeys

Yeah, but did they do any worse?

Uh, yeah

And nice dodge on the rest of the comment.

[MrHoover]

Originally Posted by neutrino78x

In my case, I just can't afford to buy out here, but want to live here because this is my home, this is where I grew up (I grew up in Silicon Valley). If ownership was important to me, I'm sure I could move to Trumpville easily enough. Although I wouldn't be able to help my dad out anymore, if I did that. He would be living on the street.

I'm sure there are many others who are renting long term because they wish to live here but can't afford to buy in the area. There's nothing wrong with that. At least not in my opinion.

I’m sure if you really tried you could buy a one bedroom condo. You may not be able to buy in San Jose or Fremont but you could buy in Vallejo or Tracy.

[mysticaltyger]

Originally Posted by Mister 7

Mildly insulting CA coastal elitist crap, but ok, I am in a CA forum.

Agreed on that point.

Originally Posted by Mister 7

Think you'll still feel this way, though, when social security isn't enough to live on, and all you have is 4 walls you down't own and rent will be god knows what?

That's a valid point.

Originally Posted by Mister 7

Also, people are acting like they have the money to pay some outrageous rent payment yet still invest in the market for 30 years??? This can't be the norm..

Saving any significant percentage in the stock market isn't the norm for anyone, unfortunately. But I will tell you I have done so for the last 22--almost 23--years. And I do have a government job that is supposed to pay me a decent pension at 55 which most people won't get. That said, I always tried to save/invest as if I wasn't getting one. For both financial and personal reasons, I expect I will move to a cheaper area. I have enough invested that I could quit my job and move somewhere cheaper now. But at this point it would be a bit too tight and it would make me too dependent on a pension that has shaky funding (despite my employer putting gobs of extra money into it). I fully admit I'm not the norm. Being financially normal is the last thing I want to be. Financially normal is a stress filled nightmare as far as I'm concerned.

Originally Posted by Mister 7

I know it's difficult to impossible to acquire real estate in desirable CA, but buying a house is a very smart and solid financial decision, I hate to break it to some of you in denial.

Here's where I'm gonna disagree with you. The problem with putting an arm and a leg into real estate is that if you put a huge % of your income into a house, many people would be house poor for at least a decade. A lot can go wrong with your job, the economy, etc. in 10+ years. And it seems like whenever people stretch what they can afford to the absolute limit, the adverse economic events just pile up on them (a la 2008 financial crisis). So I think the better option for a lot of people is to just admit they can't really afford to live in an expensive area and/or be willing to live very unconventionally to save $$ (i.e. rent out their house to roommates for a decade)...but unfortunately, many don't do that either, often because of inertia, but sometimes due to feeling superior because they live in X place and believe that somehow makes them a better human being.

I want the flexibility of not being tied down to a house.

[80skeys]

Originally Posted by JJonesIII

And nice dodge on the rest of the comment.

You throw away money on rent, but you also throw away money on interest payments on a mortgage. Let's do a quick back of the envelope calculation: you borrow $250k at 4% 30-year. Over the lifetime of the loan you pay $180k in interest and let's say $3k/year in property taxes. But you also have some interest deduction on your personal taxes due to home ownership so let's just say it pays for hte property taxes. There's also some other costs to home ownership you don't have as a renter - upkeep, maintenance - I don't know how much that would be, let's say $2k/year. so over 30 years you've "thrown away" $240k. This is equivalent to 240 months of renting at $1000/month. 240 months = 20 years.

So in this scenario 20 years is the break even point - you have to wait 20 years before you see any financial benefit from home ownership versus renting in that case.
For this scenario. Other interest rates and property taxes will affect that number.

Originally Posted by Mister 7

I know it's difficult to impossible to acquire real estate in desirable CA, but buying a house is a very smart and solid financial decision, I hate to break it to some of you in denial.

As shown above, it's only smart and solid if there's a reasonably quick break-even point versus renting. You have a life expectancy of 78, so if you buy an average priced home at 4% in your 20s to your 30s, then you can expect to arrive at the break even with a couple decades left before your life expectancy. In this case it makes sense.

But at higher interest rates or larger property taxes or the later in life you buy the home, it makes less sense. At 8% interest it makes no sense because it is financially completely equivalent to renting. You have to wait 40 years for that break even point. If you buy in your 30s, then you are barely arriving at the break even point by the time you die.

[80skeys]

Originally Posted by MrHoover

I’m sure if you really tried you could buy a one bedroom condo. You may not be able to buy in San Jose or Fremont but you could buy in Vallejo or Tracy.

Or you can go farther out to the small towns in the western foothills of the Sierra, where property is much lower priced compared even to Tracy.