10 ms·
"buying a house but renting everything that doesn't depreciate"
by smegsicle 4y ago
"buying a house but renting everything that doesn't depreciate"
- pessimizer 4y agoIt's only profitable to rent the things to you that you would be better off buying.
- lotsofpulp 4y agoRental cars, hotel room, and certain machinery/tools? Owning something has costs too, and if you are not interested in learning how to or paying someone else to maintain and secure something, then it can make sense to not buy it also. I need a vibrating plate compactor once in 10 years, and Home Depot has a stream of customers who need it all the time. I could buy it and rent it to others when I am not using it, but I have other things I want to do with my time. Therefore, it is profitable for Home Depot to rent it to me, and for me to pay a slight premium to never have to worry about it outside the few hours I needed to use it. Similarly, I have rented apartments in my 20s in places I had no intention of setting down, and buying would have been a waste of time and effort.
- janef0421 4y agoI think temporary rentals and indefinite rentals are fundamentally distinct products, so analysing them together doesn't make a lot of sense.
- lotsofpulp 4y agoAn indefinite rental sounds like a misnomer better stated as “being too poor to buy <x>”. Or maybe “insufficient supply of <x>”. Which, in this discussion would be land, in certain locations.
- ajsnigrutin 4y agoConsidering property taxes, do you really ever own your house?
- pdonis 4y agoPaying taxes on something you own in order to support services provided by a municipality is not the same as renting something you don't own. Not to mention that the cost of property tax on a typical home is much less than the rental of an equivalent home would be.
- ajsnigrutin 4y agoWell sure, but if you fall in a coma for a year, you might wake up homeless (i might be exaggerating the timeframe a bit, but the case stands).
- scythe 4y agoA lot of the time this is simply handled by placing a lien on the property due at sale or transfer. Your kids might not be able to inherit it, but inheritance is another question altogether.
- pdonis 4y ago> if you fall in a coma for a year, you might wake up homeless No, you would wake up, as scythe has already pointed out, with a tax lien on your property--which you could of course remove by paying the taxes owed. If you own your home, you can't be evicted from it the way a renter can. The only way to force you out of your home would be to take away your title to it. I'm not aware of any jurisdictions where this is actually done for non-payment of taxes, though. A much better case can be made that you don't fully own your home if you have a mortgage on it, since the lender has the right to foreclose, which means they take title to the property, if you don't make your mortgage payments for some period of time. (Ironically, your property taxes if you have a mortgage are being paid out of an escrow account, so your mortgage lender will see the consequences of non-payment well before your municipality will.)
- dahfizz 4y agoI'm sure every state is different, but there are places where the state can enforce their tax lein by foreclosing and taking ownership of your property.
- tshaddox 4y agoHome rental is temporary too, and that’s one of the big benefits.
- dahfizz 4y agoYou're always going to live somewhere. Moving is easier when you rent, but you still pay rent at the new place. The rent doesn't stop like in the case of tools or hotel rooms.
- janef0421 4y agoSome tenancies are temporary, and renting can be beneficial in those instances, but most tenancies involve occupants who permanently live in the area and would buy if it were financially feasible.
- zamfi 4y ago[citation needed] I have no doubt there are plenty of people who rent permanently in an area but would rather own. But "most"? Half of renters are under 40; according to one analysis, half of renters are young folks just looking for what they can afford in a place they're not sure they want to settle into yet: https://www.naahq.org/who-are-todays-renters https://www.naahq.org/who-are-todays-renters Granted all this is in the US, where homeownership rates hover around 65-66%. I sadly (happily?) don't know anything about the rent/own dynamics in places I have not lived.
- janef0421 4y agoBy area, I mean a metropolitan area, and I think most residents of a metropolitan area at any given time have no active plan to leave that metropolitan area.
- zamfi 4y agoYes, I understand what you mean, and I am disagreeing with you that “most” (as in > 50%) renters who have no active plan to leave a metro area would rather buy, but don’t because they can’t afford to. Some, sure. But doesn’t seem like it’s “most”.
- imtringued 4y agoEven if you have plenty of money to just buy the apartments and houses you want to live in in Germany, you must pay a tax on the purchase which is effectively a tax that only owner occupiers who move frequently pay, which massively advantages long term landlords over owner occupiers. Moving every 8 years means paying a lot of taxes if you want to own the property.
- pkphilip 4y agoAgreed. It is a lot cheaper overall to buy used rather than renting something - especially when you plan to use it for years
- ChadNauseam 4y agoEven ignoring things like renting skis, why do so many people rent their homes?
- dahfizz 4y agoThey are paying for a service. They don't want to worry about maintenance, they want to be able to move frequently, etc.
- cbsmith 4y agoThis is the main catch that the article skips over.