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> The Flexibility of Renting Is Undervalued And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle

by kibwen 1y ago

> The Flexibility of Renting Is Undervalued And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle rather than as a basic necessity. And it's not just a necessity because it shelters you from the elements and gives you storage for your stuff; it anchors you in a neighborhood and allows you to begin forming a local community. The flexibility of renting that this article glorifies is itself anathema to knowing and befriending your neighbors on anything but the shortest of terms; even if you don't intend to move, you have no guarantee that they won't up and exercise that flexibility. This is a major contributor to the modern loneliness epidemic.

pedalpete 1y ago
As a renter who has recently been given notice that I must vacate my apartment in 90 days, you'd think I'd agree with you. However, I think this depends highly on the personality of the renter/owner, and that is the point this article misses. If someone is, like myself, comfortable with risks, I'm ok with changing neighbors, locations, and I've lived on 3 different continents and 9 cities? If you're someone who craves stability, then this isn't for you, and you're proably better off buying a house.
- onecommentman 1y ago
  Values stability. You crave an addictive substance. By choosing the word “crave”, it sounds like you are pathologizing the choice to buy a home, perhaps from a need to validate your personal life choice to rent in spite of facing a forced vacation of your residence. Or perhaps you have financial interests in real estate companies that manage apartments.
  - pedalpete 1y ago
    I think that's somewhat appropriate. I live in Australia where buying a home does seem more of a pathology than a smart economic choice.
- const_cast 1y ago
  Homes are not low-risk or stable at all - you transfer the risk to your job. If you lose your employment and you have a home, that's a much riskier situation than if you're renting. Because, if you cant find a job in time or in a very small location radius, you must sell. The mobility of renting lowers the risk associated with extraordinary life events which requires relocation.
  - projectazorian 1y ago
    If you live in a non-rent-stabilized apartment in a market where annual rent increases are the norm, then by renting you condemn yourself to permanent downward mobility unless your income increases by more than your rent every year. 8-10% annual rent increases are not unusual at all in NYC/LA/SF - maybe you can get a 10% raise every year, but I'd wager even most HN posters can't. For this reason alone, it makes sense to grind to homeownership as quickly as possible if you live in a top tier market. Those locations also de-risk homeownership a bit since they have the largest job markets and highest real estate demand. If you live anywhere else in the US then I agree, renting starts to look a lot more attractive.
    - const_cast 1y ago
      Not this simple: for early career software engineers, 10% pay raise per year is pretty low. I would expect 20% per year if you move companies. Can't really move companies easily if you're owning a home, ergo, about 10% potential loss per year over renting, not including the difference in investments you could achieve by having more liquid income w renting vs buying. Buying DOES make sense. I think it almost never makes sense if you're early in your career. The ceiling is just too high to give up potential earnings that early. The closer you get to the ceiling though, the more sense buying a home makes.
filoleg 1y ago
> the stability of buying It depends. Personally, after witnessing both sides of the coin second-hand, I am not leaning in the direction of either buying or renting in absolute. It is highly dependent on the context and circumstances of a specific situation/market. I am aware that this is just an anecdote (i.e., it isn't going to say much about the overall state of things across all states in the US), but there is a specific example I'd witnessed myself, which led me to believe that this is a bit more complicated than just "renting is the move" and "buying is the move." TLDR: one of my former coworkers bought a condo in Queen Anne neighborhood of Seattle (which is a highly desirable and expensive neighborhood in that metro area). Within the first year of his ownership, the pipes behind his laundry machine burst due to no fault of his own (while he was at work), and it ended up flooding the apartment of the neighbor below. It decimated the flooring of both his own unit and the unit of the neighbor below. He ended up was facing the costs of unfucking his own condo AND the unit below. I don't remember the numbers off the top of my head at all (as the whole thing happened around 2018-2019, and I wasn't really involved in any direct way at all), but I remember that he did the math and (based upon the numbers, reasonably) ended up selling his condo as soon as he'd finished fixing his own unit + paying for the fixes to the unit below. Meanwhile, I am currently renting, and if the pipes in my unit burst and end up flooding the neighbors below, it would be mostly the problem of the property management company running my building to deal with, not mine. This alone make me feel way more stable than if I'd owned the unit I live in atm.
- tehwebguy 1y ago
  Buying a condo is half buying and half renting.
  - bombcar 1y ago
    A condo somehow combines the worst aspects of buying and renting.
    - devonkim 1y ago
      That would be an HOA moreso than the features of a condo, although a condo tends to imply an HOA in the US. The irony of my experiences with an HOA is that its actions tended to suppress my property value rather than preserve or grow it.
wavemode 1y ago
I don't know many homeowners who formed "local communities" with their neighbors. I know a few, but not many. And I know renters who know all their neighbors well. Seems more like a personality trait than something enabled by owning where you live.
- bdangubic 1y ago
  100% this - it is exception, small exception that communities can be formed with neighbours. take home-owners associations into the equation and there is higher likelyhood you’ll punch someone than have a beer with them
  - PlanksVariable 1y ago
    0% this - neighborhoods with single family homes are more likely to have families, and kids often create friendships that carry over to parent friendships. And if anybody in the neighborhood takes the initiative to plan block parties, dinner parties, etc., that really helps a community take root. This just doesn't happen as often with apartments, where people are more transient and more likely to be single and/or childless.
    - oblio 1y ago
      Only in places with non family friendly apartments. 80% of Eastern Europe, for example, would disagree with you.
      - bdangubic 1y ago
        I am strictly talking about USA and I believe this entire thread is. I am originally from Eastern Europe, grew up in a 12-story building and can still recipe names of pretty much everyone that lived in the building when I left in 1992. Not only in that building but also a 10-story adjecent building :)
    - baubino 1y ago
      This really just depends on the city. These kinds of generalizations just don’t hold for different cities with different cultures of community. I, for one, spent my entire childhood living in apartments, as did everyone I knew (and probably almost everyone does in large cities) and now am raising my own family in an apartment in a neighborhood with lots of other families. This kind of living is the norm in many places.
firecall 1y ago
Absolutely agree with this! We need, as a society, to bring back generational communities. Our workplaces are not our families! I'll also add, that once you have children, owning your home is a very welcome level of stability. Nothing worse than looking for a new rental and potentially being forced to upend all your routines and find new schools for the kids as you cant rent in the same area anymore!
- bdangubic 1y ago
  I know three families that owned and had to move cause they could not afford to live in the house they own (gerrimandering- related…) owning does not shield you from shit like that, maybe in rural america but definitely not in/around the cities
  - 9x39 1y ago
    Almost everyone I know has a significant portion of their wealth in home equity. The renters I know tend to have much lower wealth. This is reflected broadly in the US wealth distribution. You brought up a good point though, and that’s the trap of being house poor. Too many owners fail to look / have not been taught to factor local property taxes and maintenance costs into their homes. My network definitely has people caught unaware by escrow shortages, siding costs, roof costs, HVAC stack costs. Despite it all, US homeowners seem to edge out renters, but it doesn’t have to be causative, either. https://www.aspeninstitute.org/wp-content/uploads/2024/11/ASAPN0431-From-Rent-to-Riches-Report-241113-WEB.pdf https://www.aspeninstitute.org/wp-content/uploads/2024/11/AS...
    - bluefirebrand 1y ago
      It is way better to be house poor than to be a renter, because at least the house is generally an appreciating asset
      - bdangubic 1y ago
        this is a fantasy people have bought in the last X years because government has done everything imaginable to get people to own homes.
AfterHIA 1y ago
I live in a traditional middle class neighborhood and half the houses are rentals for college kids and people who can't buy. I'm not sure who to agree with here.
bdangubic 1y ago
I owned for the last 25 years (3 houses, 8, 8 and 9 years) and am very social person. I do not have a single neighbour friend in all these years. what you are describing is (in vast majority of cases especially in urban areas) just wishful thinking.
- hudon 1y ago
  yes, because he forgot about the car. The reason we don’t befriend our neighbors is because as soon as we leave our home, we put ourselves in a metal cage, ensuring no one will talk to us if we don’t want them to. Befriending your neighbors kind of works in a city but only REALLY works in Amish communities.
- phillygta 1y ago
  Disagree that it's wishful thinking. Making friends with your neighbors requires a commitment to community - it has less to do with being a social person and more to do with recognizing the mutual benefits.
  - bdangubic 1y ago
    Making friends with your neighbors requires a commitment to community I can make all the commitment I want to date Beyonce but at the end of the day it takes two to dance :)
- litoE 1y ago
  This was also our experience while owning three homes in single-family neighborhoods over a 35-year period. We knew our neighbors enough to say "hello", but that was it, and we never associated with them. However, 13 years ago we bought an apartment in a large high-rise condominium building. To our surprise - because that was not a consideration when we moved - we have made many good friends among our neighbors. We go out to dinner together, we invite each other to our homes and to family celebrations. The downside is an aspect of communal living. For example, we needed a new carpet in the building's lobby, so all the owners voted on the color. The majority chose green and we hate green, but we have to live with it.
- 1y ago
davewritescode 1y ago
I don’t think renting or buying makes a difference in communities. I had a much better relationship with my neighbors when I rented vs now where I own my own home. I chalk up the difference to the fact that a lot of people my age couldn’t afford to live where I moved so my neighborhood is full of wealthier older people who I have nothing in common with.
subarctic 1y ago
I'd argue it's not undervalued, lots of people are aware of this benefit and that's why so many people want to own their own home despite renting being the better financial option on paper. It's strange the article doesn't mention it though.
hmmokidk 1y ago
Befriending is a weak argument, unless there’s something I am missing. Growing up my family kind of befriended one neighbor, and we just know what they’re up to and who bought and demolished their home. So like… Is that really that important?
mizzao 1y ago
It seems like the position in this article pops up frequently among the FIRE crowd... anyone know why this is? It does seem to square with the objective function of maximize financial outcome as much as possible (perhaps ignoring other goals).
- ethbr1 1y ago
  Because it's an easy "hot take" to post for people hungry to change their lives? Arguing the actual optimal approach would require crunching numbers, which would take time by authors and readers, ergo the surfeit of "Here's why you crunching the numbers doesn't matter" popular content. Also, just to call out one of the many gaps in this particular post: buying a home is a double hedge against inflation. Given that (1) your debt is denominated in buy-date currency, while your real property value will be inflation-adjusted & (2) in the US at least, buying a home is the easiest way to borrow to invest with, given low mortgage rates (compared to other loans) + <100% down + fixed-rate 30 year mortgages with refinance at buyer's discretion.
rurp 1y ago
Yep, owning gives you a lot more control over your living situation. I do think the financial case is really overrated, especially if you get hit with some expensive repairs, but that's not what I like about owning a house. A lot of people, including myself, have had some really nasty scrambles when a lease didn't get renewed like they were expecting and suddenly had to move in a hurry. That can really suck, especially if it happens at a bad time like with a new kid or sick relative. Owning also lets you invest in your space a lot more, and I'm not really talking about fancy remodels that cost tens of thousands. More like smaller projects like adding a nice catio, buying workout equipment that fits your space, or setting up a nice home office in a dedicated room. My partner and I held off on all sorts of purchases and projects like that while we were renting because each would have been a huge hassle to move, and might not have fit in the next place we lived. The costs are manageable for a long term improvement, but I wouldn't want to toss one out in a year. Now that we own a house we have have gone ahead with a lot of those additions and they make our living situation much more pleasant.

by kibwen 1y ago

pedalpete 1y ago

As a renter who has recently been given notice that I must vacate my apartment in 90 days, you'd think I'd agree with you. However, I think this depends highly on the personality of the renter/owner, and that is the point this article misses. If someone is, like myself, comfortable with risks, I'm ok with changing neighbors, locations, and I've lived on 3 different continents and 9 cities? If you're someone who craves stability, then this isn't for you, and you're proably better off buying a house.

onecommentman 1y ago
Values stability. You crave an addictive substance. By choosing the word “crave”, it sounds like you are pathologizing the choice to buy a home, perhaps from a need to validate your personal life choice to rent in spite of facing a forced vacation of your residence. Or perhaps you have financial interests in real estate companies that manage apartments.
- pedalpete 1y ago
  I think that's somewhat appropriate. I live in Australia where buying a home does seem more of a pathology than a smart economic choice.
const_cast 1y ago
Homes are not low-risk or stable at all - you transfer the risk to your job. If you lose your employment and you have a home, that's a much riskier situation than if you're renting. Because, if you cant find a job in time or in a very small location radius, you must sell. The mobility of renting lowers the risk associated with extraordinary life events which requires relocation.
- projectazorian 1y ago
  If you live in a non-rent-stabilized apartment in a market where annual rent increases are the norm, then by renting you condemn yourself to permanent downward mobility unless your income increases by more than your rent every year. 8-10% annual rent increases are not unusual at all in NYC/LA/SF - maybe you can get a 10% raise every year, but I'd wager even most HN posters can't. For this reason alone, it makes sense to grind to homeownership as quickly as possible if you live in a top tier market. Those locations also de-risk homeownership a bit since they have the largest job markets and highest real estate demand. If you live anywhere else in the US then I agree, renting starts to look a lot more attractive.
  - const_cast 1y ago
    Not this simple: for early career software engineers, 10% pay raise per year is pretty low. I would expect 20% per year if you move companies. Can't really move companies easily if you're owning a home, ergo, about 10% potential loss per year over renting, not including the difference in investments you could achieve by having more liquid income w renting vs buying. Buying DOES make sense. I think it almost never makes sense if you're early in your career. The ceiling is just too high to give up potential earnings that early. The closer you get to the ceiling though, the more sense buying a home makes.

filoleg 1y ago

> the stability of buying It depends. Personally, after witnessing both sides of the coin second-hand, I am not leaning in the direction of either buying or renting in absolute. It is highly dependent on the context and circumstances of a specific situation/market. I am aware that this is just an anecdote (i.e., it isn't going to say much about the overall state of things across all states in the US), but there is a specific example I'd witnessed myself, which led me to believe that this is a bit more complicated than just "renting is the move" and "buying is the move." TLDR: one of my former coworkers bought a condo in Queen Anne neighborhood of Seattle (which is a highly desirable and expensive neighborhood in that metro area). Within the first year of his ownership, the pipes behind his laundry machine burst due to no fault of his own (while he was at work), and it ended up flooding the apartment of the neighbor below. It decimated the flooring of both his own unit and the unit of the neighbor below. He ended up was facing the costs of unfucking his own condo AND the unit below. I don't remember the numbers off the top of my head at all (as the whole thing happened around 2018-2019, and I wasn't really involved in any direct way at all), but I remember that he did the math and (based upon the numbers, reasonably) ended up selling his condo as soon as he'd finished fixing his own unit + paying for the fixes to the unit below. Meanwhile, I am currently renting, and if the pipes in my unit burst and end up flooding the neighbors below, it would be mostly the problem of the property management company running my building to deal with, not mine. This alone make me feel way more stable than if I'd owned the unit I live in atm.

tehwebguy 1y ago
Buying a condo is half buying and half renting.
- bombcar 1y ago
  A condo somehow combines the worst aspects of buying and renting.
  - devonkim 1y ago
    That would be an HOA moreso than the features of a condo, although a condo tends to imply an HOA in the US. The irony of my experiences with an HOA is that its actions tended to suppress my property value rather than preserve or grow it.

wavemode 1y ago

I don't know many homeowners who formed "local communities" with their neighbors. I know a few, but not many. And I know renters who know all their neighbors well. Seems more like a personality trait than something enabled by owning where you live.

bdangubic 1y ago
100% this - it is exception, small exception that communities can be formed with neighbours. take home-owners associations into the equation and there is higher likelyhood you’ll punch someone than have a beer with them
- PlanksVariable 1y ago
  0% this - neighborhoods with single family homes are more likely to have families, and kids often create friendships that carry over to parent friendships. And if anybody in the neighborhood takes the initiative to plan block parties, dinner parties, etc., that really helps a community take root. This just doesn't happen as often with apartments, where people are more transient and more likely to be single and/or childless.
  - oblio 1y ago
    Only in places with non family friendly apartments. 80% of Eastern Europe, for example, would disagree with you.
    - bdangubic 1y ago
      I am strictly talking about USA and I believe this entire thread is. I am originally from Eastern Europe, grew up in a 12-story building and can still recipe names of pretty much everyone that lived in the building when I left in 1992. Not only in that building but also a 10-story adjecent building :)
  - baubino 1y ago
    This really just depends on the city. These kinds of generalizations just don’t hold for different cities with different cultures of community. I, for one, spent my entire childhood living in apartments, as did everyone I knew (and probably almost everyone does in large cities) and now am raising my own family in an apartment in a neighborhood with lots of other families. This kind of living is the norm in many places.

firecall 1y ago

Absolutely agree with this! We need, as a society, to bring back generational communities. Our workplaces are not our families! I'll also add, that once you have children, owning your home is a very welcome level of stability. Nothing worse than looking for a new rental and potentially being forced to upend all your routines and find new schools for the kids as you cant rent in the same area anymore!

bdangubic 1y ago
I know three families that owned and had to move cause they could not afford to live in the house they own (gerrimandering- related…) owning does not shield you from shit like that, maybe in rural america but definitely not in/around the cities
- 9x39 1y ago
  Almost everyone I know has a significant portion of their wealth in home equity. The renters I know tend to have much lower wealth. This is reflected broadly in the US wealth distribution. You brought up a good point though, and that’s the trap of being house poor. Too many owners fail to look / have not been taught to factor local property taxes and maintenance costs into their homes. My network definitely has people caught unaware by escrow shortages, siding costs, roof costs, HVAC stack costs. Despite it all, US homeowners seem to edge out renters, but it doesn’t have to be causative, either. https://www.aspeninstitute.org/wp-content/uploads/2024/11/ASAPN0431-From-Rent-to-Riches-Report-241113-WEB.pdf https://www.aspeninstitute.org/wp-content/uploads/2024/11/AS...
  - bluefirebrand 1y ago
    It is way better to be house poor than to be a renter, because at least the house is generally an appreciating asset
    - bdangubic 1y ago
      this is a fantasy people have bought in the last X years because government has done everything imaginable to get people to own homes.

AfterHIA 1y ago

I live in a traditional middle class neighborhood and half the houses are rentals for college kids and people who can't buy. I'm not sure who to agree with here.

bdangubic 1y ago

I owned for the last 25 years (3 houses, 8, 8 and 9 years) and am very social person. I do not have a single neighbour friend in all these years. what you are describing is (in vast majority of cases especially in urban areas) just wishful thinking.

hudon 1y ago
yes, because he forgot about the car. The reason we don’t befriend our neighbors is because as soon as we leave our home, we put ourselves in a metal cage, ensuring no one will talk to us if we don’t want them to. Befriending your neighbors kind of works in a city but only REALLY works in Amish communities.
phillygta 1y ago
Disagree that it's wishful thinking. Making friends with your neighbors requires a commitment to community - it has less to do with being a social person and more to do with recognizing the mutual benefits.
- bdangubic 1y ago
  Making friends with your neighbors requires a commitment to community I can make all the commitment I want to date Beyonce but at the end of the day it takes two to dance :)
litoE 1y ago
This was also our experience while owning three homes in single-family neighborhoods over a 35-year period. We knew our neighbors enough to say "hello", but that was it, and we never associated with them. However, 13 years ago we bought an apartment in a large high-rise condominium building. To our surprise - because that was not a consideration when we moved - we have made many good friends among our neighbors. We go out to dinner together, we invite each other to our homes and to family celebrations. The downside is an aspect of communal living. For example, we needed a new carpet in the building's lobby, so all the owners voted on the color. The majority chose green and we hate green, but we have to live with it.
1y ago

davewritescode 1y ago

I don’t think renting or buying makes a difference in communities. I had a much better relationship with my neighbors when I rented vs now where I own my own home. I chalk up the difference to the fact that a lot of people my age couldn’t afford to live where I moved so my neighborhood is full of wealthier older people who I have nothing in common with.

subarctic 1y ago

I'd argue it's not undervalued, lots of people are aware of this benefit and that's why so many people want to own their own home despite renting being the better financial option on paper. It's strange the article doesn't mention it though.

hmmokidk 1y ago

Befriending is a weak argument, unless there’s something I am missing. Growing up my family kind of befriended one neighbor, and we just know what they’re up to and who bought and demolished their home. So like… Is that really that important?

mizzao 1y ago

It seems like the position in this article pops up frequently among the FIRE crowd... anyone know why this is? It does seem to square with the objective function of maximize financial outcome as much as possible (perhaps ignoring other goals).

ethbr1 1y ago
Because it's an easy "hot take" to post for people hungry to change their lives? Arguing the actual optimal approach would require crunching numbers, which would take time by authors and readers, ergo the surfeit of "Here's why you crunching the numbers doesn't matter" popular content. Also, just to call out one of the many gaps in this particular post: buying a home is a double hedge against inflation. Given that (1) your debt is denominated in buy-date currency, while your real property value will be inflation-adjusted & (2) in the US at least, buying a home is the easiest way to borrow to invest with, given low mortgage rates (compared to other loans) + <100% down + fixed-rate 30 year mortgages with refinance at buyer's discretion.

rurp 1y ago

Yep, owning gives you a lot more control over your living situation. I do think the financial case is really overrated, especially if you get hit with some expensive repairs, but that's not what I like about owning a house. A lot of people, including myself, have had some really nasty scrambles when a lease didn't get renewed like they were expecting and suddenly had to move in a hurry. That can really suck, especially if it happens at a bad time like with a new kid or sick relative. Owning also lets you invest in your space a lot more, and I'm not really talking about fancy remodels that cost tens of thousands. More like smaller projects like adding a nice catio, buying workout equipment that fits your space, or setting up a nice home office in a dedicated room. My partner and I held off on all sorts of purchases and projects like that while we were renting because each would have been a huge hassle to move, and might not have fit in the next place we lived. The costs are manageable for a long term improvement, but I wouldn't want to toss one out in a year. Now that we own a house we have have gone ahead with a lot of those additions and they make our living situation much more pleasant.