6 ms·

> I really wonder how folks who are entering the market now are able to deal with the much higher monthly payment. I’m simply choosing not to play, I’ll keep r

> I really wonder how folks who are entering the market now are able to deal with the much higher monthly payment. I’m simply choosing not to play, I’ll keep renting my place for $9900 a year in a metro area of 3.5 million, I’m not tripling my housing costs just to get ‘equity’, I’ll dump the extra 20k a year into VTI and come out ahead in the long run, equities don’t require roofs or furnaces.

bluGill 5y ago
Maybe. IF the inflation predictions are right this time your rent will jump to $50k/year, while the mortgage of those who bought stays the same, so they have the money to invest not you. That is a big if, and there are lots of different ways things can turn out. God doesn't advise me, so only time will tell what really happens...
- deleted 5y ago
  [deleted]
- harambae 5y ago
  If his $10k/year rent goes to $50k/year he probably won't want to live there anyway on account of the constant looting and rioting.
  - bluGill 5y ago
    One would assume wages go up you compensate.
    - harambae 5y ago
      Is that how it worked out in Venezuela recently with those levels of inflation?
      - bluGill 5y ago
        There is typically a lag between wages going up an inflation, and that lag will catch a lot of people, but in general it does work that way in the long run. The long run can be 10+ years though, which isn't good for the person caught in the cycle.
totalZero 5y ago
Equities can also drop 50% in a matter of weeks. Be circumspect about the risks that you willingly choose for yourself.
- randomopining 5y ago
  Indexes? Lol when has that happened and not rebound within a few months?
  - totalZero 5y ago
    Your comment reflects the level of certainty that often precedes major bearish volatility. In other words, pride comes before the fall.
    - randomopining 5y ago
      But seriously US indexes like the SP were down big at most for like 6 months. If you need the cash just hold and take out at 6 months. Keep 6 months emergency and you're set.
      - totalZero 5y ago
        There are a few indices for which that has not played out. Look at QQQ 20 years ago. I'm not trying trying he argumentative, just suggesting that past performance doesn't always dictate future performance, and past sell-offs were not always critically damped.
spfzero 5y ago
The thing is, the person owning the place you rent is looking at their asset appreciating under you. They are going to either: raise your rent to keep pace, or, sell it out from under you to someone who will rent it out for much more than you are paying. You should not count on your rent being stable in your calculations. They may still make sense, they may not.
- chii 5y ago
  Rent is a cost that is going to need to be paid whether you live in the place, or rent it out. If you live in it, you pay (or lose) imputed rent anyway. If you currently can rent for lower than the cost of capital, you are ahead (except for taxation, which does change the equation - cost of capital for investment is cheaper, usually, than for home residence due to tax incentives).

bluGill 5y ago

Maybe. IF the inflation predictions are right this time your rent will jump to $50k/year, while the mortgage of those who bought stays the same, so they have the money to invest not you. That is a big if, and there are lots of different ways things can turn out. God doesn't advise me, so only time will tell what really happens...

deleted 5y ago
[deleted]
harambae 5y ago
If his $10k/year rent goes to $50k/year he probably won't want to live there anyway on account of the constant looting and rioting.
- bluGill 5y ago
  One would assume wages go up you compensate.
  - harambae 5y ago
    Is that how it worked out in Venezuela recently with those levels of inflation?
    - bluGill 5y ago
      There is typically a lag between wages going up an inflation, and that lag will catch a lot of people, but in general it does work that way in the long run. The long run can be 10+ years though, which isn't good for the person caught in the cycle.

totalZero 5y ago

Equities can also drop 50% in a matter of weeks. Be circumspect about the risks that you willingly choose for yourself.

randomopining 5y ago
Indexes? Lol when has that happened and not rebound within a few months?
- totalZero 5y ago
  Your comment reflects the level of certainty that often precedes major bearish volatility. In other words, pride comes before the fall.
  - randomopining 5y ago
    But seriously US indexes like the SP were down big at most for like 6 months. If you need the cash just hold and take out at 6 months. Keep 6 months emergency and you're set.
    - totalZero 5y ago
      There are a few indices for which that has not played out. Look at QQQ 20 years ago. I'm not trying trying he argumentative, just suggesting that past performance doesn't always dictate future performance, and past sell-offs were not always critically damped.

spfzero 5y ago

The thing is, the person owning the place you rent is looking at their asset appreciating under you. They are going to either: raise your rent to keep pace, or, sell it out from under you to someone who will rent it out for much more than you are paying. You should not count on your rent being stable in your calculations. They may still make sense, they may not.

chii 5y ago
Rent is a cost that is going to need to be paid whether you live in the place, or rent it out. If you live in it, you pay (or lose) imputed rent anyway. If you currently can rent for lower than the cost of capital, you are ahead (except for taxation, which does change the equation - cost of capital for investment is cheaper, usually, than for home residence due to tax incentives).