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> “I don’t believe in houses or mortgages. Who in their right mind would spend their lifetime paying for a building they never get to spend time in because they

> “I don’t believe in houses or mortgages. Who in their right mind would spend their lifetime paying for a building they never get to spend time in because they are always working?” > The intentional poor are “looking for something real that goes beyond commodity,” said Karen Halnon, a sociology professor at Pennsylvania State University and author of "Consumption of Inequality." See, the historical edition of "something real" and the mainstream reason to pay for the house is called "your children". I don't expect many of these people are raising any, so there you go.

lelele 13y ago
> See, the historical edition of "something real" and the mainstream reason to pay for the house is called "your children". Your children need you way more than a pretty room. If saving on accommodation lets you spend less hours in the office and more hours with them, they will be happier for sure. The amount of space paid for and wasted in average houses is mind-blowing. Pay for what you use, not what you think you need. That's the gist of the article.
codegeek 13y ago
Exactly. I bought a house right after my first kid was born (second on the way) and I would not trade it for anything else. Yes I am paying the mortgage+ taxes and what not but I know that my kids are getting the environment we want as a family to grow up. Yes you can always argue that kids can be raised in rented apartments, condos etc. but to each his own. I recently painted one of the rooms for the kid and loved doing it. Imagine dealing with landlords asking for permission to put a nail on the wall. Many more things like this. tl;dr: People buy houses not because they see it as investment in terms of money (well thats also there to an extent but besides the point in this context), they buy it to call it their home where they have the freedom to do whatever the heck they want.
- atwebb 13y ago
  As someone forced to rent with kids for the past several years (apparently contracting isn't a real job to banks), you got it exactly right. Floating around, without a defined base is really difficult and affects you more than you realize. Though you have to pay for upkeep on a house (and HOA/insurance/taxes) renting brings it's own issues (fees,deposits,moving expenses) and, in our area, rents are about 30-50% higher than a mortgage for a comparable house in a comparable neighborhood. Not to mention, the nice, stable neighborhoods don't have much rental action around here.
  - VLM 13y ago
    "rents are about 30-50% higher than a mortgage for a comparable house in a comparable neighborhood." That's HIGHLY unusual and perhaps a very local phenomena. If accurate, you should buy a house, for cash perhaps, and rent it out to get phenomenal returns. Perhaps you're not accounting for insurance, or prop tax, or utilities as part of the rent or something. Usually, arbitrage sets in, and in the long run, renting money from the bank ends up costing about as much as renting land from an owner.
    - atwebb 13y ago
      Franklin or certain (well lots of areas) of Nashville just don't have many available rentals (worth a damn). I had lots of trouble finding anything around $1/sqft/month to rent but buying is around $.5-.75/sqft/month. There's also several private colleges in Nashville so that may contribute to higher rental demand as well. Now, I didn't do a full ROI on it since I'm not coming from an investment only perspective and there are certainly other factors but I am including taxes and insurance. You are most certainly correct that buying a house for cash would make sense, but if that seems like a truly viable option for a younger family then you have lost touch with reality in a big way. Rent's like that don't seem highly unusual either, there's a large swath of people who cannot qualify at the moment but have plenty of monthly cash flow so they are driving rents up. If investors see this and buy in desirable areas, well, that reduces supply as well... Let's say you can buy a house and pay $1,500/month (all inclusive). As an investor, you've got to factor in maintenance (say $200 a month to account for large ones and if you have the tenants do the lawn care) and, most likely, a 6-8% property management fee (unless you're a big time investor or you treat it like it's your job). So, now you need close to $1,800-850 just to break even, let alone make a profit. Rent is already 17-20% higher than buying and the investor still needs a profit, depending on the area and demand that can be pretty steep but should be at least 12-15%, so there you go. EDIT: I should also note that TN is known for it's low COL, I can't imagine this situation gets too much better in more populated areas.
      - VLM 13y ago
        "You are most certainly correct that buying a house for cash would make sense, but if that seems like a truly viable option for a younger family then you have lost touch with reality in a big way." Well, yes, my point is not that you would do it, but someone "must" see it an do it. Its like the old joke about getting an economists attention and pointing to a $20 bill laying on the floor, and the economist refusing to pick up the $20, saying, "thats impossible, by the efficient market hypothesis $20 bills can't be laying on the floor ready to be picked up by anyone." If my house maint only cost $200/month long term I'd be pretty happy. Or it would have collapsed around me as I live here. The killer isn't so much the multi $1K class expenses like roofs and HVAC, but the $750 appliances, theres so darn many, all value engineered to fail in five years, and the uncountable $100 trips to home depot.
- onion2k 13y ago
  "I bought a house right after my first kid..." I don't think it's right to buy children. ;)
  - codegeek 13y ago
    fixed it for you.
- VLM 13y ago
  "Imagine dealing with landlords asking for permission to put a nail on the wall." LOL back in the real world, it never costs a penny over the security deposit. Usually people who cry the loudest about home=freedom live in a HOA where you need to ask the Warden's permission to plant flowers, which I always find pretty amusing. Thank god I'm free of that landlord, although now the HOA controls my every decision and waking moment... In my younger years I found that you tend to get what you optimize for WRT real estate. So if you optimize solely for location size and price, all you get is a good location size and price. The landlord will probably be a total jerk or insane. My bachelor pad was not the most convenient and relatively small and somewhat expensive but the landlord was awesome and reasonable and fast and effective. "permitted" to paint? Heck, he not only permitted it, he paid for it. You tend to get what you optimize for.
  - codegeek 13y ago
    "back in the real world, it never costs a penny over the security deposit." Funny you say that. I have had many landlords in the past when I was renting and at least 2 of them were shady and tried to take a portion out of my deposit with false claims that I did something wrong. One specific case, the landlord claimed that renters are supposed to pay for carpet cleaning when leaving. We had nothing of that in the contract. I pointed it out and her response "thats the state law" and she forwarded me a PDF of the state law for landlord/tenants. Guess what, I actually found a section in that same PDF that clearly said that tenants are not responsible for usual wear and tear cleaning unless agreed in the contract. Overall, I think you are missing the point of why to own vs rent. I would rather deal with an HOA than a scheming landlord.
    - VLM 13y ago
      "Point is: you cannot generalize." Why? You get what you optimize for. Sometimes it doesn't work, but usually it does. Also in the olden days a landlord might have gotten away with bait and switch, but it seems unlikely it'll happen now. Also given crooks, why risk more financial assets than necessary; I don't get the desire to deal with a HOA over a landlord. I don't trust that homeless person with $5, so I'll hand my wallet to that panhandler instead; what could possibly go wrong?
Adirael 13y ago
Why are children the reason to buy instead of rent? My parents were renting till I was around 13. Then they bought a house. Years later they sold it and moved to a different one (they bought that one too). It never made a difference to me.
- DanBC 13y ago
  In theory they get a big load to buy a house, and pay it off over their lifetime, and about when they finish work or soon after they die, leaving you the house. You either move in or sell it, giving you a lump sum. Or they don't die, but need expensive medical care. Being able to sell the house to pay those bills is handy.
- tekalon 13y ago
  Kids cause damage. They spill on carpets and draw on walls. My biggest reason for me personally, be able to take down walls, paint, dig holes, build XYZ without asking landlords permission.
microcolonel 13y ago
You have to remember that for dudes(still typically willing to work more), are not finding those relationships attractive, especially when they're in a tight spot. They're trapped between welfare and work, and the group is growing; do you think these people care about mainstream motivations or even peer pressure?
buckbova 13y ago
A house is also an investment in the future. I'm sure these folk don't believe in the future either.
- yardie 13y ago
  The future says there is a backlog of overvalued houses for the next 3-5 years. A house can be a good investment, but it becomes a bad investment if you are caught when the bubble bursts.
  - buckbova 13y ago
    A real estate bubble burst, which we already went through just recently, doesn't affect current homeowners. It only affects those who need to sell at that moment and have been a homeowner for a short while. I am betting my home will be worth well more than it's worth right now in 3 to 5 years. But, I'm in a coastal city where homes are always in demand.
    - yardie 13y ago
      I grew up in a coastal city (Miami) and watched prices climb 100k, then bolted to 500k-600k before settling back into 100k-200k again. Houses were always in demand but prices were constrained by average salary (35k avg) until investors got involved and banks took the constraints off mortgage requirements. I watched a friend put her college graduation money as down payment on a 4 bedroom house and struggle (she couldn't afford to go out, couldn't even afford to eat meat) for a few years all in the vain belief that it was an investment. She aged about 10 years in that period time.
Luc 13y ago
Perhaps there's something peculiar to where you live, but I've never felt I needed to buy a house, and I have kids and pets, and I'm not shy about putting nails in the walls either. 'Brits buy, Germans rent' http://www.theguardian.com/money/2011/mar/19/brits-buy-germans-rent http://www.theguardian.com/money/2011/mar/19/brits-buy-germa...
- hackerboos 13y ago
  There's no security in the rental market in the UK. You can be out of your home or have large rent increases with very little notice. In contrast with Germany which has strong rights for tenants including gasp rent control which seems to be hated here on HN.
  - VLM 13y ago
    No lease contracts in .uk? Do car leases work that way in the .uk, like if the car mfgr decides to sell the car out from underneath you even if you're up to date on payments they just send the repo guy out to take it without warning?
    - hackerboos 13y ago
      Cars leases are different rental leases. In the UK rental leases are very weak.
DanBC 13y ago
The guy in the photo in the article has 2 children. I find it odd that he lives in a hobbit hole, but then travels 4,000 km to avoid winter. Why not just live somewhere more temperate?

lelele 13y ago

> See, the historical edition of "something real" and the mainstream reason to pay for the house is called "your children". Your children need you way more than a pretty room. If saving on accommodation lets you spend less hours in the office and more hours with them, they will be happier for sure. The amount of space paid for and wasted in average houses is mind-blowing. Pay for what you use, not what you think you need. That's the gist of the article.

codegeek 13y ago

Exactly. I bought a house right after my first kid was born (second on the way) and I would not trade it for anything else. Yes I am paying the mortgage+ taxes and what not but I know that my kids are getting the environment we want as a family to grow up. Yes you can always argue that kids can be raised in rented apartments, condos etc. but to each his own. I recently painted one of the rooms for the kid and loved doing it. Imagine dealing with landlords asking for permission to put a nail on the wall. Many more things like this. tl;dr: People buy houses not because they see it as investment in terms of money (well thats also there to an extent but besides the point in this context), they buy it to call it their home where they have the freedom to do whatever the heck they want.

atwebb 13y ago
As someone forced to rent with kids for the past several years (apparently contracting isn't a real job to banks), you got it exactly right. Floating around, without a defined base is really difficult and affects you more than you realize. Though you have to pay for upkeep on a house (and HOA/insurance/taxes) renting brings it's own issues (fees,deposits,moving expenses) and, in our area, rents are about 30-50% higher than a mortgage for a comparable house in a comparable neighborhood. Not to mention, the nice, stable neighborhoods don't have much rental action around here.
- VLM 13y ago
  "rents are about 30-50% higher than a mortgage for a comparable house in a comparable neighborhood." That's HIGHLY unusual and perhaps a very local phenomena. If accurate, you should buy a house, for cash perhaps, and rent it out to get phenomenal returns. Perhaps you're not accounting for insurance, or prop tax, or utilities as part of the rent or something. Usually, arbitrage sets in, and in the long run, renting money from the bank ends up costing about as much as renting land from an owner.
  - atwebb 13y ago
    Franklin or certain (well lots of areas) of Nashville just don't have many available rentals (worth a damn). I had lots of trouble finding anything around $1/sqft/month to rent but buying is around $.5-.75/sqft/month. There's also several private colleges in Nashville so that may contribute to higher rental demand as well. Now, I didn't do a full ROI on it since I'm not coming from an investment only perspective and there are certainly other factors but I am including taxes and insurance. You are most certainly correct that buying a house for cash would make sense, but if that seems like a truly viable option for a younger family then you have lost touch with reality in a big way. Rent's like that don't seem highly unusual either, there's a large swath of people who cannot qualify at the moment but have plenty of monthly cash flow so they are driving rents up. If investors see this and buy in desirable areas, well, that reduces supply as well... Let's say you can buy a house and pay $1,500/month (all inclusive). As an investor, you've got to factor in maintenance (say $200 a month to account for large ones and if you have the tenants do the lawn care) and, most likely, a 6-8% property management fee (unless you're a big time investor or you treat it like it's your job). So, now you need close to $1,800-850 just to break even, let alone make a profit. Rent is already 17-20% higher than buying and the investor still needs a profit, depending on the area and demand that can be pretty steep but should be at least 12-15%, so there you go. EDIT: I should also note that TN is known for it's low COL, I can't imagine this situation gets too much better in more populated areas.
    - VLM 13y ago
      "You are most certainly correct that buying a house for cash would make sense, but if that seems like a truly viable option for a younger family then you have lost touch with reality in a big way." Well, yes, my point is not that you would do it, but someone "must" see it an do it. Its like the old joke about getting an economists attention and pointing to a $20 bill laying on the floor, and the economist refusing to pick up the $20, saying, "thats impossible, by the efficient market hypothesis $20 bills can't be laying on the floor ready to be picked up by anyone." If my house maint only cost $200/month long term I'd be pretty happy. Or it would have collapsed around me as I live here. The killer isn't so much the multi $1K class expenses like roofs and HVAC, but the $750 appliances, theres so darn many, all value engineered to fail in five years, and the uncountable $100 trips to home depot.
onion2k 13y ago
"I bought a house right after my first kid..." I don't think it's right to buy children. ;)
- codegeek 13y ago
  fixed it for you.
VLM 13y ago
"Imagine dealing with landlords asking for permission to put a nail on the wall." LOL back in the real world, it never costs a penny over the security deposit. Usually people who cry the loudest about home=freedom live in a HOA where you need to ask the Warden's permission to plant flowers, which I always find pretty amusing. Thank god I'm free of that landlord, although now the HOA controls my every decision and waking moment... In my younger years I found that you tend to get what you optimize for WRT real estate. So if you optimize solely for location size and price, all you get is a good location size and price. The landlord will probably be a total jerk or insane. My bachelor pad was not the most convenient and relatively small and somewhat expensive but the landlord was awesome and reasonable and fast and effective. "permitted" to paint? Heck, he not only permitted it, he paid for it. You tend to get what you optimize for.
- codegeek 13y ago
  "back in the real world, it never costs a penny over the security deposit." Funny you say that. I have had many landlords in the past when I was renting and at least 2 of them were shady and tried to take a portion out of my deposit with false claims that I did something wrong. One specific case, the landlord claimed that renters are supposed to pay for carpet cleaning when leaving. We had nothing of that in the contract. I pointed it out and her response "thats the state law" and she forwarded me a PDF of the state law for landlord/tenants. Guess what, I actually found a section in that same PDF that clearly said that tenants are not responsible for usual wear and tear cleaning unless agreed in the contract. Overall, I think you are missing the point of why to own vs rent. I would rather deal with an HOA than a scheming landlord.
  - VLM 13y ago
    "Point is: you cannot generalize." Why? You get what you optimize for. Sometimes it doesn't work, but usually it does. Also in the olden days a landlord might have gotten away with bait and switch, but it seems unlikely it'll happen now. Also given crooks, why risk more financial assets than necessary; I don't get the desire to deal with a HOA over a landlord. I don't trust that homeless person with $5, so I'll hand my wallet to that panhandler instead; what could possibly go wrong?

Adirael 13y ago

Why are children the reason to buy instead of rent? My parents were renting till I was around 13. Then they bought a house. Years later they sold it and moved to a different one (they bought that one too). It never made a difference to me.

DanBC 13y ago
In theory they get a big load to buy a house, and pay it off over their lifetime, and about when they finish work or soon after they die, leaving you the house. You either move in or sell it, giving you a lump sum. Or they don't die, but need expensive medical care. Being able to sell the house to pay those bills is handy.
tekalon 13y ago
Kids cause damage. They spill on carpets and draw on walls. My biggest reason for me personally, be able to take down walls, paint, dig holes, build XYZ without asking landlords permission.

microcolonel 13y ago

You have to remember that for dudes(still typically willing to work more), are not finding those relationships attractive, especially when they're in a tight spot. They're trapped between welfare and work, and the group is growing; do you think these people care about mainstream motivations or even peer pressure?

buckbova 13y ago

A house is also an investment in the future. I'm sure these folk don't believe in the future either.

yardie 13y ago
The future says there is a backlog of overvalued houses for the next 3-5 years. A house can be a good investment, but it becomes a bad investment if you are caught when the bubble bursts.
- buckbova 13y ago
  A real estate bubble burst, which we already went through just recently, doesn't affect current homeowners. It only affects those who need to sell at that moment and have been a homeowner for a short while. I am betting my home will be worth well more than it's worth right now in 3 to 5 years. But, I'm in a coastal city where homes are always in demand.
  - yardie 13y ago
    I grew up in a coastal city (Miami) and watched prices climb 100k, then bolted to 500k-600k before settling back into 100k-200k again. Houses were always in demand but prices were constrained by average salary (35k avg) until investors got involved and banks took the constraints off mortgage requirements. I watched a friend put her college graduation money as down payment on a 4 bedroom house and struggle (she couldn't afford to go out, couldn't even afford to eat meat) for a few years all in the vain belief that it was an investment. She aged about 10 years in that period time.

Luc 13y ago

Perhaps there's something peculiar to where you live, but I've never felt I needed to buy a house, and I have kids and pets, and I'm not shy about putting nails in the walls either. 'Brits buy, Germans rent' http://www.theguardian.com/money/2011/mar/19/brits-buy-germans-rent http://www.theguardian.com/money/2011/mar/19/brits-buy-germa...

hackerboos 13y ago
There's no security in the rental market in the UK. You can be out of your home or have large rent increases with very little notice. In contrast with Germany which has strong rights for tenants including gasp rent control which seems to be hated here on HN.
- VLM 13y ago
  No lease contracts in .uk? Do car leases work that way in the .uk, like if the car mfgr decides to sell the car out from underneath you even if you're up to date on payments they just send the repo guy out to take it without warning?
  - hackerboos 13y ago
    Cars leases are different rental leases. In the UK rental leases are very weak.

DanBC 13y ago

The guy in the photo in the article has 2 children. I find it odd that he lives in a hobbit hole, but then travels 4,000 km to avoid winter. Why not just live somewhere more temperate?