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Owning things also brings liabilities. Hit a pothole and pop a car tire -> 250 dollars down the drain. Own a house and roof starts leaking? -> 10k dollars down

Owning things also brings liabilities. Hit a pothole and pop a car tire -> 250 dollars down the drain. Own a house and roof starts leaking? -> 10k dollars down the drain. There are certainly a huge class of people for which owning a car or a house makes sense, but there are also a lot of people who might be able to afford a car, but when compared to the total costs of maintenance + depreciation + unexpected repairs + parking + insurance + time spent keeping it running (getting gas, finding parking, taking it to the shop), going Car less and using uber + transit + bike + rentals on weekends makes much more sense

aetherson 8y ago
I mean, these things are all priced into renting. There's some virtue in paying them in a predictable, steady rate instead of getting spikes of bad luck, but it's not like you pay less for car tires on an Uber, or for roofs in a rental unit, than you do as a car owner or a home owner. And if you want predictability, you should be able to get insurance, or just reserve a chunk of your income for a "home maintenance fund." (EDIT: I guess that to the extent that you live in a multi-story rental building, you and other renters above and below you share the costs of the single roof above you. But that's, first, not the major cost of home ownership, second, not applicable to all renting, and third, probably a small enough savings that it's eaten up by profits to your landlord and the costs of maintaining a super.)
- zacherates 8y ago
  That's true, but it's much easier to pay for the 20% of a car that you actually use when you're renting it as needed. While it's less obvious with housing the same applies: People buy houses that are bigger than they need at any given moment so that they have the space they need to entertain guests, or house prospective (or past) children, etc. It's much cheaper for me to put my parents up in a hotel when they come to town, than to keep a guest room idle for the next 20 years of my mortgage.
  - aetherson 8y ago
    The utilization argument about rental cars is valid when and if we get driverless cars. Until then, the amount that you pay the driver completely destroys that savings. (And in fact you pay for more wear on tires, gas/electricity, and other per-mile costs with rideshare, because the car travels more on your behalf than would a car you own.) How much house you want/need is a valid concern, but not one that really cuts towards the question of renting or owning your primary residence. You can buy a house without a guest room. I did!
- conjectures 8y ago
  Yes and no. Yes: rented stuff is generally more expensive in expectation - you're paying for LandLord2.0's marketing department. No: you own a home and the roof leaks - good luck getting the insurance to see to it promptly, even after half a dozen phone calls. If you are truly time poor and cash rich I suppose it could make sense to rent most things.
  - aetherson 8y ago
    Lots of people also have difficulty getting their landlord to fix maintenance problems promptly. I think this is an orthogonal issue. There's definitely a case for "paying money to make other people handle shit instead of you." There are lots and lots and lots and lots of opportunities to do this. You can go to a restaurant instead of cooking. You can have food delivered instead of going to a restaurant! You can hire a driver, whether it's through an Uber or through paying the salary of a personal chauffeur. You can hire maids, whether directly or by staying at a hotel. But, again, I don't think this really is that closely related to renting versus buying.
- ansy 8y ago
  This assumes a perfectly efficient market with no opportunity for arbitrage. Sometimes what you can get in rent is less than what it costs to maintain a property, but it’s still better than letting it remain empty. Assuming the owner is even that financially disciplined. And again, sometimes people just don’t understand the finances. Sometimes the rent people can charge is far higher than the cost to maintain property. But that doesn’t mean the owner is selling or that the renter is in a position to buy. One is not categorically better than the other in all situations.
  - aetherson 8y ago
    Okay, sure, but I don't see the OP of this subthread saying, "Stay on the lookout for arbitrage opportunities!" I see them not understanding that just because you don't go to the tire shop personally doesn't mean that you don't pay for the tire.
rootusrootus 8y ago
It's not like the pothole ceased to exist, or the need for a new tire, or house, or roof, etc. Someone will still own those things, still be responsible for fixing them. And they will pass those costs on to the renter. So are you really saving money? It's like buying everything at a convenience store. That convenience has value, and an associated cost. I guess for people who are comfortable forever being tenants, it could work pretty well. Certainly there is a class of people who are comfortable being the landlord.
- wvenable 8y ago
  It's not about saving money; it's about not having the savings and resources to deal with unpredictable costs. That's the situation for a lot of people.
  - rootusrootus 8y ago
    Sorta like the allegory of the boot, I imagine. To be fair, though, you can buy insurance for those unpredictable costs.
    - wvenable 8y ago
      But that increases the cost of owning to the point where the difference in 'renting' might not be significant.

aetherson 8y ago

I mean, these things are all priced into renting. There's some virtue in paying them in a predictable, steady rate instead of getting spikes of bad luck, but it's not like you pay less for car tires on an Uber, or for roofs in a rental unit, than you do as a car owner or a home owner. And if you want predictability, you should be able to get insurance, or just reserve a chunk of your income for a "home maintenance fund." (EDIT: I guess that to the extent that you live in a multi-story rental building, you and other renters above and below you share the costs of the single roof above you. But that's, first, not the major cost of home ownership, second, not applicable to all renting, and third, probably a small enough savings that it's eaten up by profits to your landlord and the costs of maintaining a super.)

zacherates 8y ago
That's true, but it's much easier to pay for the 20% of a car that you actually use when you're renting it as needed. While it's less obvious with housing the same applies: People buy houses that are bigger than they need at any given moment so that they have the space they need to entertain guests, or house prospective (or past) children, etc. It's much cheaper for me to put my parents up in a hotel when they come to town, than to keep a guest room idle for the next 20 years of my mortgage.
- aetherson 8y ago
  The utilization argument about rental cars is valid when and if we get driverless cars. Until then, the amount that you pay the driver completely destroys that savings. (And in fact you pay for more wear on tires, gas/electricity, and other per-mile costs with rideshare, because the car travels more on your behalf than would a car you own.) How much house you want/need is a valid concern, but not one that really cuts towards the question of renting or owning your primary residence. You can buy a house without a guest room. I did!
conjectures 8y ago
Yes and no. Yes: rented stuff is generally more expensive in expectation - you're paying for LandLord2.0's marketing department. No: you own a home and the roof leaks - good luck getting the insurance to see to it promptly, even after half a dozen phone calls. If you are truly time poor and cash rich I suppose it could make sense to rent most things.
- aetherson 8y ago
  Lots of people also have difficulty getting their landlord to fix maintenance problems promptly. I think this is an orthogonal issue. There's definitely a case for "paying money to make other people handle shit instead of you." There are lots and lots and lots and lots of opportunities to do this. You can go to a restaurant instead of cooking. You can have food delivered instead of going to a restaurant! You can hire a driver, whether it's through an Uber or through paying the salary of a personal chauffeur. You can hire maids, whether directly or by staying at a hotel. But, again, I don't think this really is that closely related to renting versus buying.
ansy 8y ago
This assumes a perfectly efficient market with no opportunity for arbitrage. Sometimes what you can get in rent is less than what it costs to maintain a property, but it’s still better than letting it remain empty. Assuming the owner is even that financially disciplined. And again, sometimes people just don’t understand the finances. Sometimes the rent people can charge is far higher than the cost to maintain property. But that doesn’t mean the owner is selling or that the renter is in a position to buy. One is not categorically better than the other in all situations.
- aetherson 8y ago
  Okay, sure, but I don't see the OP of this subthread saying, "Stay on the lookout for arbitrage opportunities!" I see them not understanding that just because you don't go to the tire shop personally doesn't mean that you don't pay for the tire.

rootusrootus 8y ago

It's not like the pothole ceased to exist, or the need for a new tire, or house, or roof, etc. Someone will still own those things, still be responsible for fixing them. And they will pass those costs on to the renter. So are you really saving money? It's like buying everything at a convenience store. That convenience has value, and an associated cost. I guess for people who are comfortable forever being tenants, it could work pretty well. Certainly there is a class of people who are comfortable being the landlord.

wvenable 8y ago
It's not about saving money; it's about not having the savings and resources to deal with unpredictable costs. That's the situation for a lot of people.
- rootusrootus 8y ago
  Sorta like the allegory of the boot, I imagine. To be fair, though, you can buy insurance for those unpredictable costs.
  - wvenable 8y ago
    But that increases the cost of owning to the point where the difference in 'renting' might not be significant.