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> Paying off a mortgage is a form of “forced savings,” Nope, stopped reading there. The whole thing is inane. Most people don't get an option of not paying any

> Paying off a mortgage is a form of “forced savings,” Nope, stopped reading there. The whole thing is inane. Most people don't get an option of not paying anyone anything for their housing at all. Only extremely well off landlords and some retirees with fully paid off mortgages do. Someone owns the building where you live. Either that person is you, and you are paying off your own debt; or that person is someone else, and you are paying off theirs. This article argues at great length for you to let someone else pocket all of that wealth rather than retaining some of it yourself. If you pay mortgage, there is hope that one day you will have paid it off and no longer have to. If you pay rent, only your landlord profits.

pohl 4y ago
Yeah, that line jumped out at me as the same weak sauce that makes people say things like "taxation is theft".
led_tasso 4y ago
[dead]
- thesuitonym 4y ago
  Great that you found an exception to the rule, but that is not the reality for the majority of this articles readers.
- tsukikage 4y ago
  ...true, I was forgetting that. I don't, sadly, live in a part of the world that really believes in government ownership or management of anything at all except perhaps the military; our government has spent the last decade slowly dismantling the public institutions that do exist, largely unopposed. Things like social housing, financial support to cover rent, and so on are also options if you are in a part of the world where those things are viable parts of the political discourse.
raverbashing 4y ago
"forced savings" as opposed to "forced payment"? Hard not to laugh Sure, sometimes renting makes more sense than owning outright. For short term needs, changing needs, etc. Or if renting is cheaper than a mortgage But building equity is important and home ownership is one way of doing that
senko 4y ago
> Someone owns the building where you live. Either that person is you, and you are paying off your own debt; or that person is someone else, and you are paying off theirs. > If you pay mortgage, there is hope that one day you will have paid it off and no longer have to. If you pay rent, only your landlord profits. This argument only makes sense if the (monthly) rent payments are more than mortgage payments + maintenance costs. In most cases, that's not true.
- vidanay 4y ago
  > In most cases, that's not true. Are you claiming that most landlords operate at a loss? I don't buy that.
  - senko 4y ago
    No. That would assume the property itself has no value.
  - fargle 4y ago
    you guys are both right, kinda. no, landlords do not willingly operate at a loss. in a really bad market (housing glut) they may be forced to. that's not the situation right now, at least in highly populated areas. rents are usually going to be at least 20-30% higher than mortgage + expenses, or else the landlords will start selling or go bankrupt. however, that's the mortgage payment and interest rate from the time it was bought, not necessarily today. so if the landlord bought that investment property 5 years ago, his costs are probably less than 1/2 of what it would cost you today. even if the market rent goes lower than that, he can still be profitable. so, right now, temporarily, it can be slightly cheaper month-to-month to rent in a lot of markets in the us. the fact that's what the markets are doing says some things about the current and future home sale prices.
    - tsukikage 4y ago
      Note there is also a distinction to be made between the absolute money leaving the bank account every month, and the portion of that money that is paying off the principal of the loan. For renting to be better value than buying, the rent has to be cheaper than just the interest part of the mortgage payment plus whatever portion of the maintenance costs is for things a landlord could be persuaded to cover, a somewhat lower bar than the entire payment. Being able to actually afford the whole amount remains a concern, of course. Where I live obtaining mortgages for any significant portion of the cost of a property is generally hard for people on anything close to an average income or below, and so landlords can get away with charging rents that are literally higher than the total mortgage payment would be. Even though the tenant can demonstrably afford the repayments - they are literally paying a landlord more every month! - the bank will not lend more than a fixed multiple of their salary and so they cannot buy. I understand this is something of a local issue, though.
readthenotes1 4y ago
after your first property tax bill, you realize that you have local taxing authorities as landlords (as well as federal). we never really own our real estate (and i can't just leave and take it with me)
- antisthenes 4y ago
  Taxes pay for schools and ongoing infrastructure maintenance, as well as services, like trash collection. Do you like having drinkable water in your house and not having piles of trash on the sidewalks (Or having walkable sidewalks at all)? Do you like talking to educated neighbors? Yeah, those taxes pay for that. If you want to get as close to "owning your own land", move 100 miles out of a metropolitan area. Just don't complain about having no roads, no water, internet, electricity or access to the hospital when you need it most.
  - Turing_Machine 4y ago
    > Do you like having drinkable water in your house and not having piles of trash on the sidewalks These are poor examples. Privately-owned water systems and trash collection are both very common, at least in the United States. Where I live now, both are city services. Where I lived immediately before, both were private. > move 100 miles out of a metropolitan area. Just don't complain about having no roads, no water, internet, electricity or access to the hospital when you need it most. Most houses in rural areas of the United States have perfectly adequate roads, have a private well, and get their electricity from a rural electric cooperative. Internet was tough, but Starlink has mostly solved that.
  - jjav 4y ago
    > Taxes pay for schools and ongoing infrastructure maintenance, as well as services, like trash collection. > Do you like having drinkable water in your house and not having piles of trash on the sidewalks At least here, taxes don't pay for either of those things. Water is billed by the water agency and trash collection is a private company with their own billing.
  - fortran77 4y ago
hotpotamus 4y ago
As someone with a paid off mortgage (sort of), I can tell you that you still have to pay the State of Texas a Property/Wealth tax every year. They tell us we'll actually have power for this next extreme cold front, so maybe they actually put those to use in the last couple years.
deleted 4y ago
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deleted 4y ago
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voisin 4y ago
> If you pay rent, only your landlord profits. This ignores the opportunity cost of the delta between equity component of the house’s financing, mortgage payments, and rent.
fortran77 4y ago
You're forgetting the very significant property tax.

pohl 4y ago

Yeah, that line jumped out at me as the same weak sauce that makes people say things like "taxation is theft".

led_tasso 4y ago

[dead]

thesuitonym 4y ago
Great that you found an exception to the rule, but that is not the reality for the majority of this articles readers.
tsukikage 4y ago
...true, I was forgetting that. I don't, sadly, live in a part of the world that really believes in government ownership or management of anything at all except perhaps the military; our government has spent the last decade slowly dismantling the public institutions that do exist, largely unopposed. Things like social housing, financial support to cover rent, and so on are also options if you are in a part of the world where those things are viable parts of the political discourse.

raverbashing 4y ago

"forced savings" as opposed to "forced payment"? Hard not to laugh Sure, sometimes renting makes more sense than owning outright. For short term needs, changing needs, etc. Or if renting is cheaper than a mortgage But building equity is important and home ownership is one way of doing that

senko 4y ago

> Someone owns the building where you live. Either that person is you, and you are paying off your own debt; or that person is someone else, and you are paying off theirs. > If you pay mortgage, there is hope that one day you will have paid it off and no longer have to. If you pay rent, only your landlord profits. This argument only makes sense if the (monthly) rent payments are more than mortgage payments + maintenance costs. In most cases, that's not true.

vidanay 4y ago
> In most cases, that's not true. Are you claiming that most landlords operate at a loss? I don't buy that.
- senko 4y ago
  No. That would assume the property itself has no value.
- fargle 4y ago
  you guys are both right, kinda. no, landlords do not willingly operate at a loss. in a really bad market (housing glut) they may be forced to. that's not the situation right now, at least in highly populated areas. rents are usually going to be at least 20-30% higher than mortgage + expenses, or else the landlords will start selling or go bankrupt. however, that's the mortgage payment and interest rate from the time it was bought, not necessarily today. so if the landlord bought that investment property 5 years ago, his costs are probably less than 1/2 of what it would cost you today. even if the market rent goes lower than that, he can still be profitable. so, right now, temporarily, it can be slightly cheaper month-to-month to rent in a lot of markets in the us. the fact that's what the markets are doing says some things about the current and future home sale prices.
  - tsukikage 4y ago
    Note there is also a distinction to be made between the absolute money leaving the bank account every month, and the portion of that money that is paying off the principal of the loan. For renting to be better value than buying, the rent has to be cheaper than just the interest part of the mortgage payment plus whatever portion of the maintenance costs is for things a landlord could be persuaded to cover, a somewhat lower bar than the entire payment. Being able to actually afford the whole amount remains a concern, of course. Where I live obtaining mortgages for any significant portion of the cost of a property is generally hard for people on anything close to an average income or below, and so landlords can get away with charging rents that are literally higher than the total mortgage payment would be. Even though the tenant can demonstrably afford the repayments - they are literally paying a landlord more every month! - the bank will not lend more than a fixed multiple of their salary and so they cannot buy. I understand this is something of a local issue, though.

readthenotes1 4y ago

after your first property tax bill, you realize that you have local taxing authorities as landlords (as well as federal). we never really own our real estate (and i can't just leave and take it with me)

antisthenes 4y ago
Taxes pay for schools and ongoing infrastructure maintenance, as well as services, like trash collection. Do you like having drinkable water in your house and not having piles of trash on the sidewalks (Or having walkable sidewalks at all)? Do you like talking to educated neighbors? Yeah, those taxes pay for that. If you want to get as close to "owning your own land", move 100 miles out of a metropolitan area. Just don't complain about having no roads, no water, internet, electricity or access to the hospital when you need it most.
- Turing_Machine 4y ago
  > Do you like having drinkable water in your house and not having piles of trash on the sidewalks These are poor examples. Privately-owned water systems and trash collection are both very common, at least in the United States. Where I live now, both are city services. Where I lived immediately before, both were private. > move 100 miles out of a metropolitan area. Just don't complain about having no roads, no water, internet, electricity or access to the hospital when you need it most. Most houses in rural areas of the United States have perfectly adequate roads, have a private well, and get their electricity from a rural electric cooperative. Internet was tough, but Starlink has mostly solved that.
- jjav 4y ago
  > Taxes pay for schools and ongoing infrastructure maintenance, as well as services, like trash collection. > Do you like having drinkable water in your house and not having piles of trash on the sidewalks At least here, taxes don't pay for either of those things. Water is billed by the water agency and trash collection is a private company with their own billing.
- fortran77 4y ago

hotpotamus 4y ago

As someone with a paid off mortgage (sort of), I can tell you that you still have to pay the State of Texas a Property/Wealth tax every year. They tell us we'll actually have power for this next extreme cold front, so maybe they actually put those to use in the last couple years.

deleted 4y ago

[deleted]

deleted 4y ago

[deleted]

voisin 4y ago

> If you pay rent, only your landlord profits. This ignores the opportunity cost of the delta between equity component of the house’s financing, mortgage payments, and rent.

fortran77 4y ago

You're forgetting the very significant property tax.