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The issue is that ownership used to constitute a form of wealth, but now it constitutes a relentless financial drain. When I got stationed in Northern Virginia
by torstenvl 8y ago
The issue is that ownership used to constitute a form of wealth, but now it constitutes a relentless financial drain.
When I got stationed in Northern Virginia, I thought about buying a condo. But almost everywhere I looked, there were absurd HOA fees, some as much as $400/mo. Considering I could rent a room for $750/mo, it didn't make sense to buy. If RENT < HOAFEES + MTGINTEREST, you're better off investing the money instead of pouring it into equity.
As for physical possessions, they all cost money (in rent!). Sure, I could own my own kayak and ATV. But it'll cost me $150/mo for a storage unit to keep them in. So until such time as I spend $1800/year on quad and kayak rentals (not even counting the amortized purchase prices), its more financially sound for me to rent them.
There are exceptions. I own my truck, which I bought used, and I know I'll drive it for years and years until it's beyond fixing. In the long run, it's cheaper than renting.
- grogenaut 8y agoIf how+mortgage is even slightly more than rent you still end up doing well as soon as you are able to clear the agent and closing costs in recouping. Renting is easier to move for sure. But stay there 3 years and the story may be different. Stay there 8 years and you're making out well over rent. But being statitioned I can see why you might not. Then again I have friends with rentals in 5 cities for the same reason. Still not as easy as a truck. I drive mine into the ground too. Not just to figure out if selling a used one or getting the trade-in is the most effective use. Buying new car way less effective than buying a good in shape 16 year old accurately for $1700 currently. I value more varied vehicles over one nice one. it's also nice to say well this one didn't start today oh well how bout this one.
- ModernMech 8y ago> it's also nice to say well this one didn't start today oh well how bout this one. It's also nice not to give zero fucks about a dent or scratch. Some people get so worked up keeping their cars perfect, like its jewelry or something.
- grogenaut 8y agoOh definitely. The Accord I bought for my son that I drive cause millenials don't or mine doesn't... it'd got a slightly banged up roof and a black front bumper on a gold car. I think it looks great and terrible. which for $1700 is what I'm going for.
- magduf 8y agoA 16-year-old car will kill you in a crash that a new one will let you walk away from. That's one big, important factor in the new vs. used debate. There's also the factor of how it's going to affect your job and life if your car breaks down. A 2-decade-old car is going to break down at some inopportune time, like it or not, even with the best maintenance.
- eanzenberg 8y agoFear monger. A 2002 car still has safety features such as airbags, seatbelts, anti-lock brakes that a 2018 will also have.
- avgDev 8y agoNow many more cars have curtain airbags. Safety standards have improved over the years. Crumple zones have improved. Now many cars come with back up cameras, back up sensors, line keep assist, emergency breaking. While, 2002 car may be relatively safe, I would still prefer to have the safest car on the road. Usually it will require less servicing than an old car and be more dependable too.
- grogenaut 8y agoIf I'm buying a $1700 car, I doubt I'm buying one that has advanced safety features cash wise as a comparison. Wait, no I'm NOT, this is me.
- minitoar 8y agoThis is not fear mongering, it is actually true. NHTSA reports have shown repeatedly that newer cars have fewer fatalities. Perhaps there is some other reason for this correlation, e.g. maintenance. https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812528 https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/...
- eanzenberg 8y agoThere’s so many confounding variables that will affect fatality rate such as age (in the link but not corrected for) income, education, etc.
- white-flame 8y agoThe equation wasn't "rent < hoa + mortgage payment", it was "rent < hoa + mortgage interest". There is zero equity involved in the latter equation.