6 ms·

I grew up in Germany, where, for reasons I don't really know or understand right now, paying rent has been common and normal across a large part of the populati

by anyfoo 5y ago

I grew up in Germany, where, for reasons I don't really know or understand right now, paying rent has been common and normal across a large part of the population since long before I was born. Buying an apartment or even house to live in almost seemed to be more like a "luxury" for rich people to me. I moved to the US a decade ago, and (I knew this before) the mindset seems to be that renting is only a temporary situation, until you finally settle down buying "your" house to raise your family in. People talk about their "first house" or "starter home", terms that aren't really common in Germany at all. Buying property isn't totally uncommon there, but often happens much later in life, and many people are happy never doing so at all. I always felt that differing mindset has been doing me a service, as I feel zero compulsion to buy property until the conditions are really fully satisfactory. I am aware that any rent I pay is "gone", while the mortgage ultimately pays into a principal, but so far the overall equation taking everything into account (also including those aspects without a directly gaugeable monetary value that the article mentions) did not tip over towards owning yet.

__turbobrew__ 5y ago
Something else to factor is that Germany probably has much stronger rental protections than many US states. Renter-landlord rights are fundamentally at tension so jurisdictions have to choose where that balance lies. If rights are lopsided towards the landlord it becomes much less desirable to rent because you have little control over your living situation.
- anyfoo 5y ago
  Almost certainly, yeah. I try to counteract this by choosing "good landlords" (a lesson I learned after my first apartment here, which was owned by a corporation that was terrible to deal with), but there's only so much you can do of course. Right now we lucked out, and it feels mutually beneficial.
schimmy_changa 5y ago
A big piece of this is that 30-year mortgages in the USA are strongly subsidized and encouraged (see, mortgage interest tax deduction, loan guarantees, flood insurance, sewer and road system subsidies, etc). So for a middle-class person, there's a giant incentive to buy a house as it's the next-best thing after 401k matches to 'free money'. Meanwhile, as we continue to not build housing (a trend over the last ~50 years), the price of renting continues to increase and the value of a house that you had previously bought also increases. I would rather avoid buying a house for flexibility reasons, but it just seems like such a waste when I compare against my peers who have bought property. Hopefully things change, but these are some of the reasons why it's such a good deal in Germany vs the US to rent. (granted I don't know much about the German side)
- anyfoo 5y ago
  > Meanwhile, as we continue to not build housing (a trend over the last ~50 years), the price of renting continues to increase and the value of a house that you had previously bought also increases. Yeah, that of course would be the major incentive to buy a house. But on the other hand, living in the Bay Area, buying into this market feels a bit like gambling to me. Do I really believe property prices will come crashing down? Not really. Am I certain enough to lock myself into a suboptimal situation at a gargantuan price? Also no...
- deleted 5y ago
  [deleted]
jlokier 5y ago
Aside from finance, a big motivation to buy a home in the UK is to have more self-determination in your home life. Renting places you under someone else's control to a large extent. You often can't decorate much. Can't fit better windows, and windows where I've rented have usually been poor quality. Can't replace the washing machine even if it's not working properly. Can't put up shelves. Can't fit solar panels or better insulation, or replace carpets. Sometimes you can't even paint the walls. In the town where I live nearly all rental properties are "furnished", to the point that there aren't many unfurnished properties to choose from. This means you can't change the furniture - couches, tables, curtains (drapes), beds, wardrobes etc. Often there is an old TV you would never choose for yourself. Of course you do make some choices when you decide where to move into, but there may not be anything particularly to your own taste, and what you want will change over time anyway. Aside from the lack of self-determination while in there, there is a constant threat of "no reason" evictions which landlords exercise from time to time. Because no reason is given, it doesn't take much. I've seen it done sometimes by rental property agents just so they can advertise a large rent increase on the open market which would not seem reasonable applied to the existing tenant - that time, the landlord didn't particularly want the tenant out, but the agent saw a chance to get their new-tenancy fees and advised the landlord to evict. Long term stability in a rental property is a luxury in some areas, and finding another property nearby may not be possible. Got a child in school? Don't assume they will be able to stay in the same school. I have encountered rental situations where it is required to pay 12 months rent up front every year during the tenancy (on top of 1.5 months deposit) - but only if you're not well off enough to qualify for monthly rental payment. This sucks if the reason you are moving is because of a no-reason eviction from a previous place, so you quickly need to find another property as well as 13.5 months worth of rent at short notice. Naturally, you can't use the deposit from the previous place in that scenario as you won't get it in time, and you won't get all of it. Speaking of 12 months, in the town where I live and I gather in many others, 12 month tenancies are the maximum you can get. Technically every year there's a new tenancy, usually with new contract fees to pay, and the possibility they might decide not to renew it. If you're really unlucky there might be a new credit and income check each renewal, which you will fail if you fell on hard times, such as between jobs. This duration is because UK law has additional tenant protections with tenancies longer than 12 months. So of course landlords don't offer them.

by anyfoo 5y ago

__turbobrew__ 5y ago

Something else to factor is that Germany probably has much stronger rental protections than many US states. Renter-landlord rights are fundamentally at tension so jurisdictions have to choose where that balance lies. If rights are lopsided towards the landlord it becomes much less desirable to rent because you have little control over your living situation.

anyfoo 5y ago
Almost certainly, yeah. I try to counteract this by choosing "good landlords" (a lesson I learned after my first apartment here, which was owned by a corporation that was terrible to deal with), but there's only so much you can do of course. Right now we lucked out, and it feels mutually beneficial.

schimmy_changa 5y ago

A big piece of this is that 30-year mortgages in the USA are strongly subsidized and encouraged (see, mortgage interest tax deduction, loan guarantees, flood insurance, sewer and road system subsidies, etc). So for a middle-class person, there's a giant incentive to buy a house as it's the next-best thing after 401k matches to 'free money'. Meanwhile, as we continue to not build housing (a trend over the last ~50 years), the price of renting continues to increase and the value of a house that you had previously bought also increases. I would rather avoid buying a house for flexibility reasons, but it just seems like such a waste when I compare against my peers who have bought property. Hopefully things change, but these are some of the reasons why it's such a good deal in Germany vs the US to rent. (granted I don't know much about the German side)

anyfoo 5y ago
> Meanwhile, as we continue to not build housing (a trend over the last ~50 years), the price of renting continues to increase and the value of a house that you had previously bought also increases. Yeah, that of course would be the major incentive to buy a house. But on the other hand, living in the Bay Area, buying into this market feels a bit like gambling to me. Do I really believe property prices will come crashing down? Not really. Am I certain enough to lock myself into a suboptimal situation at a gargantuan price? Also no...
deleted 5y ago
[deleted]

jlokier 5y ago

Aside from finance, a big motivation to buy a home in the UK is to have more self-determination in your home life. Renting places you under someone else's control to a large extent. You often can't decorate much. Can't fit better windows, and windows where I've rented have usually been poor quality. Can't replace the washing machine even if it's not working properly. Can't put up shelves. Can't fit solar panels or better insulation, or replace carpets. Sometimes you can't even paint the walls. In the town where I live nearly all rental properties are "furnished", to the point that there aren't many unfurnished properties to choose from. This means you can't change the furniture - couches, tables, curtains (drapes), beds, wardrobes etc. Often there is an old TV you would never choose for yourself. Of course you do make some choices when you decide where to move into, but there may not be anything particularly to your own taste, and what you want will change over time anyway. Aside from the lack of self-determination while in there, there is a constant threat of "no reason" evictions which landlords exercise from time to time. Because no reason is given, it doesn't take much. I've seen it done sometimes by rental property agents just so they can advertise a large rent increase on the open market which would not seem reasonable applied to the existing tenant - that time, the landlord didn't particularly want the tenant out, but the agent saw a chance to get their new-tenancy fees and advised the landlord to evict. Long term stability in a rental property is a luxury in some areas, and finding another property nearby may not be possible. Got a child in school? Don't assume they will be able to stay in the same school. I have encountered rental situations where it is required to pay 12 months rent up front every year during the tenancy (on top of 1.5 months deposit) - but only if you're not well off enough to qualify for monthly rental payment. This sucks if the reason you are moving is because of a no-reason eviction from a previous place, so you quickly need to find another property as well as 13.5 months worth of rent at short notice. Naturally, you can't use the deposit from the previous place in that scenario as you won't get it in time, and you won't get all of it. Speaking of 12 months, in the town where I live and I gather in many others, 12 month tenancies are the maximum you can get. Technically every year there's a new tenancy, usually with new contract fees to pay, and the possibility they might decide not to renew it. If you're really unlucky there might be a new credit and income check each renewal, which you will fail if you fell on hard times, such as between jobs. This duration is because UK law has additional tenant protections with tenancies longer than 12 months. So of course landlords don't offer them.