6 ms·

"If you rent, you can leave whenever the heck you want and then go live wherever the heck you want. " You can do that when you own as well. You have to sell yo

by larrys 12y ago

"If you rent, you can leave whenever the heck you want and then go live wherever the heck you want. " You can do that when you own as well. You have to sell your house. After all you can't just get out of a lease whenever you want it goes according to a fixed time period. You have constraints as far as lease renewal, term and things like that. If you own you can decide at any point to sell (although certain times of the year are better obviously). "I value not fundamentally worrying if there were to be an earthquake and this place would be destroyed. I" Well first that is only a concern seriously in certain areas and second I wouldn't call that exactly something that is a common occurrence either. It's like saying "if I rent (edit fix) I don't have to worry about rebuilding if there is a fire". "hey, I think I want to go try living in Portland, or just a different neighborhood here." Ok so I understand your point now (but will leave the above comments for discussion). You actually are looking more to experience different things and not get tied down. Similar to the fact that some people would rather go to a different vacation spot each year rather than own a vacation home in the same place. In that case an argument can be made that it makes sense to actually pay more to rent than to own because you are deriving some other benefit from not owning that is actually worth more (maybe that is what you are saying..)

gfodor 12y ago
You are 100% incorrect on your first point. Selling a home is not easy nor cheap, takes time, and is wrought with uncertainty. It's usually a low liquidity environment. On the renting side, terminating a lease early is generally trivial. I've terminated several of the leases I've signed over the years mid-term by finding a new tenant for the landlord beforehand and having that person take over or sign a new lease. Landlords are usually happy to do so since they can increase the rent without losing any income.
- larrys 12y ago
  I guess in the end I just like to do what I want to do and not have to ask for permission or get approval. I purchased our offices and wanted to install a door and just did it. I want to put in an alarm system I know it potentially adds to the property value. New carpets? Sure since even if we move it has value to a new owner (not 20 years later of course...) I didn't have to clear it with anyone and I didn't have to think about all the fine print in a lease or anything else. But I do see your point.
tolmasky 12y ago
> Similar to the fact that some people would rather go to a different vacation spot each year rather than own a vacation home in the same place. In that case an argument can be made that it makes sense to actually pay more to rent than to own because you are deriving some other benefit from not owning that is actually worth more (maybe that is what you are saying..) Yup, I think you've come up with a really helpful analogy, that's definitely how I feel. Like the OP, I wanted to show that there were some things I valued that would make me want to rent even if it proved to be more expensive in the long run.
- larrys 12y ago
  As another example I always buy a car for cash and never lease. I want to be able to wake up any morning and get a new car exactly when I want. And I don't want to have to obsess over miles on the car or at least have it quantified "12k miles .30 overage". Not even a money issue it just takes the "fun" out of it. Your point re: renting (and my point) as I pointed out in a reply in my other comment is really the gist of what I didn't like about this article. It reduced everything down to a dollar amount when the decision for everyone is much more complicated. It's actually one of the things I don't like about "Internet advice" it's really hard to come up with a comprehensive analysis of all the reasons people make certain decisions.
webwright 12y ago
"You can do that when you own as well. You have to sell your house. " This is so incredibly wrong. Selling a house can be a massive and expensive undertaking. Assuming agents are involved, you can expect to pay 6-9% of the value of the house in costs (agent fees, closing costs, etc), assuming the buyer doesn't find something that is against code or something that is starting to fail (furnace, roof, etc). You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency? You better hope the house value went up... Otherwise you're taking a $12,000-18,000 hit when you sell it. Sometimes, house values go DOWN-- and then you are under water.
- larrys 12y ago
  "You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency?" Well it goes without saying (and this is always true for anything you read on the web, right?) that the specifics of each persons circumstances need to be taken into account. Along those lines there are people that: a) Own their own business so they aren't employed by anyone and don't have a job opportunity to consider. b) Those in "a" have businesses that they intend to stick with and further may be tied down by either family or their wife's occupation (or children) c) Have considerable assets or family they wouldn't have to bail out. In any case along the lines of "family emergency" how would thinking of that situation allow anyone to ever take a chance or buy a house? What about having a startup (as only one example) and then having a "family emergency"? "Otherwise you're taking a $12,000-18,000 hit when you sell it" The main problem that I had with this article's slant is that it tried to quantify things in a way that made you think that all that mattered were dollars. Not everyone thinks like that. Or cares if they were to lose 12 to 18k they'd rather be a homeowner and live in a community as a homeowner rather than a renter in either an apartment building (with more transient residents) or as a renter in a condo or even as a renter in a neighborhood. And they are willing to part with money in order to do that. Same way some people might decide to spend $5000 on a vacation or $50,000 for an airplane (when flying the airlines obviously is cheaper in most cases).
  - webwright 12y ago
    I own two houses and I agree with you. If you're in great financial shape and you'd be happy buying a house, buy a house. The vast majority of folks (americans, anyways) AREN'T in good financial shape, however, and often overestimate the permanence of their current situation. If you have to sell your house inside 5 years, you're in iffy shape. It can be financially catastrophic if you have to move during a down market. About 30% of folks are out of the house by the end of their 6th year, when they probably thought it was going to be their home for decades (source: http://www.nahb.org/generic.aspx?genericContentID=110770&channelID=311 http://www.nahb.org/generic.aspx?genericContentID=110770&cha... ).
femto 12y ago
Or, you retain ownership of your house and become a landlord, whilst being a tenant in your location of choice. Edit: Here the question isn't whether you should buy a house, but whether you should live in the house you buy?
khuey 12y ago
You can break a lease whenever you want. Generally the most you can lose is the deposit plus rent until the unit can be filled. Compared to the transaction costs of selling a house it's negligible. The concern about the place being damaged/destroyed by an earthquake is a big one in California. Unlike fires, earthquakes are not covered by standard home insurance. And standalone earthquake insurance is prohibitively expensive for many (less than 1/5th of CA homeowners have it). Add to that the fact that (again, unlike a fire) an earthquake is likely to damage many homes in the same area at the same time which will inflate the cost to rebuild in a timely manner and you start to see the large amount of risk many owners are exposed to here.

by larrys 12y ago

gfodor 12y ago

You are 100% incorrect on your first point. Selling a home is not easy nor cheap, takes time, and is wrought with uncertainty. It's usually a low liquidity environment. On the renting side, terminating a lease early is generally trivial. I've terminated several of the leases I've signed over the years mid-term by finding a new tenant for the landlord beforehand and having that person take over or sign a new lease. Landlords are usually happy to do so since they can increase the rent without losing any income.

larrys 12y ago
I guess in the end I just like to do what I want to do and not have to ask for permission or get approval. I purchased our offices and wanted to install a door and just did it. I want to put in an alarm system I know it potentially adds to the property value. New carpets? Sure since even if we move it has value to a new owner (not 20 years later of course...) I didn't have to clear it with anyone and I didn't have to think about all the fine print in a lease or anything else. But I do see your point.

tolmasky 12y ago

> Similar to the fact that some people would rather go to a different vacation spot each year rather than own a vacation home in the same place. In that case an argument can be made that it makes sense to actually pay more to rent than to own because you are deriving some other benefit from not owning that is actually worth more (maybe that is what you are saying..) Yup, I think you've come up with a really helpful analogy, that's definitely how I feel. Like the OP, I wanted to show that there were some things I valued that would make me want to rent even if it proved to be more expensive in the long run.

larrys 12y ago
As another example I always buy a car for cash and never lease. I want to be able to wake up any morning and get a new car exactly when I want. And I don't want to have to obsess over miles on the car or at least have it quantified "12k miles .30 overage". Not even a money issue it just takes the "fun" out of it. Your point re: renting (and my point) as I pointed out in a reply in my other comment is really the gist of what I didn't like about this article. It reduced everything down to a dollar amount when the decision for everyone is much more complicated. It's actually one of the things I don't like about "Internet advice" it's really hard to come up with a comprehensive analysis of all the reasons people make certain decisions.

webwright 12y ago

"You can do that when you own as well. You have to sell your house. " This is so incredibly wrong. Selling a house can be a massive and expensive undertaking. Assuming agents are involved, you can expect to pay 6-9% of the value of the house in costs (agent fees, closing costs, etc), assuming the buyer doesn't find something that is against code or something that is starting to fail (furnace, roof, etc). You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency? You better hope the house value went up... Otherwise you're taking a $12,000-18,000 hit when you sell it. Sometimes, house values go DOWN-- and then you are under water.

larrys 12y ago
"You buy a house tomorrow for $200k and want to sell it in 18 months because of a job opportunity or family emergency?" Well it goes without saying (and this is always true for anything you read on the web, right?) that the specifics of each persons circumstances need to be taken into account. Along those lines there are people that: a) Own their own business so they aren't employed by anyone and don't have a job opportunity to consider. b) Those in "a" have businesses that they intend to stick with and further may be tied down by either family or their wife's occupation (or children) c) Have considerable assets or family they wouldn't have to bail out. In any case along the lines of "family emergency" how would thinking of that situation allow anyone to ever take a chance or buy a house? What about having a startup (as only one example) and then having a "family emergency"? "Otherwise you're taking a $12,000-18,000 hit when you sell it" The main problem that I had with this article's slant is that it tried to quantify things in a way that made you think that all that mattered were dollars. Not everyone thinks like that. Or cares if they were to lose 12 to 18k they'd rather be a homeowner and live in a community as a homeowner rather than a renter in either an apartment building (with more transient residents) or as a renter in a condo or even as a renter in a neighborhood. And they are willing to part with money in order to do that. Same way some people might decide to spend $5000 on a vacation or $50,000 for an airplane (when flying the airlines obviously is cheaper in most cases).
- webwright 12y ago
  I own two houses and I agree with you. If you're in great financial shape and you'd be happy buying a house, buy a house. The vast majority of folks (americans, anyways) AREN'T in good financial shape, however, and often overestimate the permanence of their current situation. If you have to sell your house inside 5 years, you're in iffy shape. It can be financially catastrophic if you have to move during a down market. About 30% of folks are out of the house by the end of their 6th year, when they probably thought it was going to be their home for decades (source: http://www.nahb.org/generic.aspx?genericContentID=110770&channelID=311 http://www.nahb.org/generic.aspx?genericContentID=110770&cha... ).

femto 12y ago

Or, you retain ownership of your house and become a landlord, whilst being a tenant in your location of choice. Edit: Here the question isn't whether you should buy a house, but whether you should live in the house you buy?

khuey 12y ago

You can break a lease whenever you want. Generally the most you can lose is the deposit plus rent until the unit can be filled. Compared to the transaction costs of selling a house it's negligible. The concern about the place being damaged/destroyed by an earthquake is a big one in California. Unlike fires, earthquakes are not covered by standard home insurance. And standalone earthquake insurance is prohibitively expensive for many (less than 1/5th of CA homeowners have it). Add to that the fact that (again, unlike a fire) an earthquake is likely to damage many homes in the same area at the same time which will inflate the cost to rebuild in a timely manner and you start to see the large amount of risk many owners are exposed to here.