4 ms·

The author seems to think it is intrinsically bad to be a renter for life. Why?

by joubert 18y ago

JeffL 18y ago
Owning a house is just so much more expensive than renting if the value isn't going up at insane rates. You have to pay for insurance, taxes, repairs, etc. It seems to me that the "extra" cost that people pay to own their own house is simply the premium created by nice aspects of owning your own house. Whether or not that premium is worth paying is a personal choice.
- anamax 18y ago
  If you're renting, who do you think is paying the insurance, taxes, repairs, etc? Yup - you, the renter. The only time that you're not is when the house is appreciating fast enough to cover those things and the rental market is for some reason depressed. However, if house prices are appreciating, lots of folks are being priced out of buying, which makes them renters, pushing up rental prices. Businesses that don't pay all of their expenses plus some profit don't stay around long. (If there's no profit, there's no point in spending the time or tying up the capital. T-bills are a safer and less expensive way to do nothing.)
  - JeffL 18y ago
    Well, in the case of renting, I'm currently renting a house that was originally bought when the housing prices were less than half of what they are now, so I'm indirectly paying only half the property tax that I would be paying if I were to buy the same house. Also, I personally know several people who buy houses and rent them for less than the mortgage, let alone all the other costs because they are hoping to make their money back on real estate appreciation.
vaksel 18y ago
because you aren't building equity in your life, your home will be the most expensive thing you'll own, so this means when you pay it off, at age 50-60, you'll have an additional 200-300K to play with, on top of you 401K + if you don't own a home...you don't have a 100-200K home equity line that you can tap when you are in need of money, like for example if you are launching a startup and need some cash to finance it

The author seems to think it is intrinsically bad to be a renter for life. Why?

by joubert 18y ago

The author seems to think it is intrinsically bad to be a renter for life. Why?

JeffL 18y ago

Owning a house is just so much more expensive than renting if the value isn't going up at insane rates. You have to pay for insurance, taxes, repairs, etc. It seems to me that the "extra" cost that people pay to own their own house is simply the premium created by nice aspects of owning your own house. Whether or not that premium is worth paying is a personal choice.

anamax 18y ago
If you're renting, who do you think is paying the insurance, taxes, repairs, etc? Yup - you, the renter. The only time that you're not is when the house is appreciating fast enough to cover those things and the rental market is for some reason depressed. However, if house prices are appreciating, lots of folks are being priced out of buying, which makes them renters, pushing up rental prices. Businesses that don't pay all of their expenses plus some profit don't stay around long. (If there's no profit, there's no point in spending the time or tying up the capital. T-bills are a safer and less expensive way to do nothing.)
- JeffL 18y ago
  Well, in the case of renting, I'm currently renting a house that was originally bought when the housing prices were less than half of what they are now, so I'm indirectly paying only half the property tax that I would be paying if I were to buy the same house. Also, I personally know several people who buy houses and rent them for less than the mortgage, let alone all the other costs because they are hoping to make their money back on real estate appreciation.

vaksel 18y ago

because you aren't building equity in your life, your home will be the most expensive thing you'll own, so this means when you pay it off, at age 50-60, you'll have an additional 200-300K to play with, on top of you 401K + if you don't own a home...you don't have a 100-200K home equity line that you can tap when you are in need of money, like for example if you are launching a startup and need some cash to finance it