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I agree with Ramit that it shouldn’t be characterized as throwing your money away. But. What it leaves out is by purchasing you’ve essentially fixed your cost

I agree with Ramit that it shouldn’t be characterized as throwing your money away. But. What it leaves out is by purchasing you’ve essentially fixed your cost of housing. Which is important when you consider. 1. Inflation 2. The ever increasing wealth divide allowing landlords to charge more for rent knowing their tenants can never qualify for the alternative of buying their own home instead. This is something I wish I understood earlier.

dublinben 3y ago
You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. I don't know any homeowners who would describe their housing costs as "fixed" and stress-free.
- antisthenes 3y ago
  > You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. As a renter, these costs are essentially passed on to you anyway, so there's functionally no difference.
  - indecisive_user 3y ago
    The difference is in predictability. When you sign a 12 month lease, you know more or less how much you'll spend towards housing for the next year and it's easy to accurately predict a cost ceiling. When you own a home, you know the minimum you'll spend is the mortgage+taxes but in an unlucky year your AC goes out and you get a hole in the roof that insurance doesn't cover and suddenly you've spent 20k that you didn't plan on.
    - antisthenes 3y ago
      Only if you have the planning capabilities of a 5-year old. A house doesn't have that many things that can go wrong with it that would be unforseen expenses. AC, water pipe leak, appliance breakdown, roof replacement. None of these cost above $8k, and for bigger things there is home insurance (e.g. tree fell on a house). Many of these things can be mitigated with a cheap fix that will last you those 12 months until you have the funds to do it properly. Also, I see this sentiment a lot from people who have no problem dropping a $15-20k down payment on an car, but somehow spending that money for home maintenance is "scary" and "unpredictable".
paulcole 3y ago
> What it leaves out is by purchasing you’ve essentially fixed your cost of housing. You’ve fixed the minimum cost of your housing. You need to budget for unpredictable extras. With renting, I know my maximum spend over a shorter timeline.

dublinben 3y ago

You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. I don't know any homeowners who would describe their housing costs as "fixed" and stress-free.

antisthenes 3y ago
> You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. As a renter, these costs are essentially passed on to you anyway, so there's functionally no difference.
- indecisive_user 3y ago
  The difference is in predictability. When you sign a 12 month lease, you know more or less how much you'll spend towards housing for the next year and it's easy to accurately predict a cost ceiling. When you own a home, you know the minimum you'll spend is the mortgage+taxes but in an unlucky year your AC goes out and you get a hole in the roof that insurance doesn't cover and suddenly you've spent 20k that you didn't plan on.
  - antisthenes 3y ago
    Only if you have the planning capabilities of a 5-year old. A house doesn't have that many things that can go wrong with it that would be unforseen expenses. AC, water pipe leak, appliance breakdown, roof replacement. None of these cost above $8k, and for bigger things there is home insurance (e.g. tree fell on a house). Many of these things can be mitigated with a cheap fix that will last you those 12 months until you have the funds to do it properly. Also, I see this sentiment a lot from people who have no problem dropping a $15-20k down payment on an car, but somehow spending that money for home maintenance is "scary" and "unpredictable".

paulcole 3y ago

> What it leaves out is by purchasing you’ve essentially fixed your cost of housing. You’ve fixed the minimum cost of your housing. You need to budget for unpredictable extras. With renting, I know my maximum spend over a shorter timeline.