5 ms·

The main problem with owning is illiquidity and associated immobility. If you rent you can quickly down shift if you run into trouble. If you own the transactio

by fspeech 12y ago

The main problem with owning is illiquidity and associated immobility. If you rent you can quickly down shift if you run into trouble. If you own the transaction cost is much higher if you need to move. The main advantage of owning one's own residence is tax and stability (the flip side of the illiquidity problem). Owner's equivalent rent is not a taxable income. Capital appreciation works in your favor rather than against you when you rent. In short owning one's own home is both economically and psychologically rewarding if you have long term stable income.

NoMoreNicksLeft 12y ago
> The main problem with owning is illiquidity and associated immobility. If you rent you can quickly down shift if you run into trouble. Where are you getting these lease-free rental units? True, you're less on the hook with a 12 month lease, and the liability is lower than a 30 year mortgage... But this is a very mild difference. That job's not going to wait for you to sell your house or for your lease to end. > If you own the transaction cost is much higher if you need to move. If you own, then eventually you're not paying anything at all for a place to live. And don't bother to mention property tax... you're paying that if you rent, too, it's just hidden. This is a manufactured debate, it's meant to appeal to twentysomethings' bohemian aspirations. Someone wants them mobile so they can herd them around like migrant workers.
- sheepmullet 12y ago
  Breaking lease is far simpler and cheaper than selling. It's never taken me more than 2-3 weeks to find someone to take over the lease whereas it can take months to sell a house. Because of this ease whenever I move jobs I always move house to be closer to work (after passing probation) because in my area changing jobs can easily add an hour a day to your commute.
  - seanmcdirmid 12y ago
    Depends on the country really...in Switzerland you can be on the hook for a lot more than in the states, where breaking a lease typically only loses your deposit.
- swalkergibson 12y ago
  This is unequivocally accurate. I own three investment properties plus my own home. Each one is profitable, including the house that I live in. It seems to me that the majority of this argument is that rents will not increase. That is a fallacy. All else being equal, each time you move from a place, you will likely be paying more rent because of the inevitable march of time.
  - bane 12y ago
    And the only things a renter can do to reduce their monthly housing burden is downsize or move to less desirable location. A homeowner's monthly burden is either static or reducing (if they're paying down the principle early), and they have all kinds of things they can use to offset that monthly housing burden, like rent spare rooms out, or use part of their home for a business.
    - judk 12y ago
      > rent spare rooms out, or use part of their home for a business. Renters do this too. they have strictly more options than owners.
      - bane 12y ago
        Most rental agreements strictly forbid this. I can't compare irregular activities to irregular activities because you can always escalate it to some nonsense money making action favoring one side over another. But supposing your agreement explicitly allows sub let's without landlord arbitrary approval, the owner is still coming out on top because the activity is simply reducing their monthly outlay while still building equity, the renter is only reducing outlay, but still has zero equity at the end of the day. More importantly, my mortgage payment will stay the same, fixed in dollars at the year I borrowed the money (in my case 2006 dollars). While rents will continue to increase. For example, at some point in the future, I'll theoretically even be able to rent a single bedroom out that will cover my entire mortgage payment simply because of this simple truth. I'll live "for free". But your base rent price will continue increasing such that you're monthly burden will stay a significant part of your monthly income. Even if you pass along as much as you can to a subletter, that percentage won't change much while mine will continuously reduce.
- hnnewguy 12y ago
  >This is a manufactured debate, it's meant to appeal to twentysomethings' bohemian aspirations. The actual "manufactured debate" is the one manufactured by the massive housing complex that tries to tell people that rent is throwing away money and it's always better to buy. Buy now! If you don't like your home, you can always sell it for more, later! This tale has been empowered by the fact that we just went through a global, disproportionate, 20 year rise in house prices and extremely low interest rates that created much wealth for one of the largest cohorts in history. Everyone under 40 (at least) is skewed by this happenstance. Some have even managed to become wealthy from it. The fact is, in an economically efficient world people would be indifferent between buying and renting. So there are many individual factors to consider, many of which are covered by this calculator. TISNTAFL. Buying a home isn't free wealth (nor is renting). There are always tradeoffs. >Someone wants them mobile so they can herd them around like migrant workers. And maybe someone wants them to buy homes so they can't easily switch jobs or relocate, and are pinned down like wage-slaves?
  - NoMoreNicksLeft 12y ago
    And yet, right now as we speak, they're out there buying up these homes for chump change, paying cash for foreclosed homes gone to auction, and then renting them back to you for what you'd have paid in mortgage, plus extra on top of that to cover expenses. You'll always be a sharecropper, now that you've been taught to believe that anything else is foolish. Once I can afford enough to do it, I'll buy another home myself and rent it out to someone like you. And I'll stand there with a sheepish grin while he laughs that he got one over on me, hoping that he never realizes otherwise.
    - hnnewguy 12y ago
      >I'll buy another home myself and rent it out to someone like you Except I own my home... I love people who have determined that they've found some trick to beat the market. "Oversized asset returns! All you need to do is buy real estate!". How many late-night TV seminars did you attend to to obtain this knowledge? One day the cheap money will disappear, and the speculators (like you) will go bankrupt. Then they'll stiff their creditors, blame the banks, and the public will pick up the tab...again.

by fspeech 12y ago

NoMoreNicksLeft 12y ago

> The main problem with owning is illiquidity and associated immobility. If you rent you can quickly down shift if you run into trouble. Where are you getting these lease-free rental units? True, you're less on the hook with a 12 month lease, and the liability is lower than a 30 year mortgage... But this is a very mild difference. That job's not going to wait for you to sell your house or for your lease to end. > If you own the transaction cost is much higher if you need to move. If you own, then eventually you're not paying anything at all for a place to live. And don't bother to mention property tax... you're paying that if you rent, too, it's just hidden. This is a manufactured debate, it's meant to appeal to twentysomethings' bohemian aspirations. Someone wants them mobile so they can herd them around like migrant workers.

sheepmullet 12y ago
Breaking lease is far simpler and cheaper than selling. It's never taken me more than 2-3 weeks to find someone to take over the lease whereas it can take months to sell a house. Because of this ease whenever I move jobs I always move house to be closer to work (after passing probation) because in my area changing jobs can easily add an hour a day to your commute.
- seanmcdirmid 12y ago
  Depends on the country really...in Switzerland you can be on the hook for a lot more than in the states, where breaking a lease typically only loses your deposit.
swalkergibson 12y ago
This is unequivocally accurate. I own three investment properties plus my own home. Each one is profitable, including the house that I live in. It seems to me that the majority of this argument is that rents will not increase. That is a fallacy. All else being equal, each time you move from a place, you will likely be paying more rent because of the inevitable march of time.
- bane 12y ago
  And the only things a renter can do to reduce their monthly housing burden is downsize or move to less desirable location. A homeowner's monthly burden is either static or reducing (if they're paying down the principle early), and they have all kinds of things they can use to offset that monthly housing burden, like rent spare rooms out, or use part of their home for a business.
  - judk 12y ago
    > rent spare rooms out, or use part of their home for a business. Renters do this too. they have strictly more options than owners.
    - bane 12y ago
      Most rental agreements strictly forbid this. I can't compare irregular activities to irregular activities because you can always escalate it to some nonsense money making action favoring one side over another. But supposing your agreement explicitly allows sub let's without landlord arbitrary approval, the owner is still coming out on top because the activity is simply reducing their monthly outlay while still building equity, the renter is only reducing outlay, but still has zero equity at the end of the day. More importantly, my mortgage payment will stay the same, fixed in dollars at the year I borrowed the money (in my case 2006 dollars). While rents will continue to increase. For example, at some point in the future, I'll theoretically even be able to rent a single bedroom out that will cover my entire mortgage payment simply because of this simple truth. I'll live "for free". But your base rent price will continue increasing such that you're monthly burden will stay a significant part of your monthly income. Even if you pass along as much as you can to a subletter, that percentage won't change much while mine will continuously reduce.
hnnewguy 12y ago
>This is a manufactured debate, it's meant to appeal to twentysomethings' bohemian aspirations. The actual "manufactured debate" is the one manufactured by the massive housing complex that tries to tell people that rent is throwing away money and it's always better to buy. Buy now! If you don't like your home, you can always sell it for more, later! This tale has been empowered by the fact that we just went through a global, disproportionate, 20 year rise in house prices and extremely low interest rates that created much wealth for one of the largest cohorts in history. Everyone under 40 (at least) is skewed by this happenstance. Some have even managed to become wealthy from it. The fact is, in an economically efficient world people would be indifferent between buying and renting. So there are many individual factors to consider, many of which are covered by this calculator. TISNTAFL. Buying a home isn't free wealth (nor is renting). There are always tradeoffs. >Someone wants them mobile so they can herd them around like migrant workers. And maybe someone wants them to buy homes so they can't easily switch jobs or relocate, and are pinned down like wage-slaves?
- NoMoreNicksLeft 12y ago
  And yet, right now as we speak, they're out there buying up these homes for chump change, paying cash for foreclosed homes gone to auction, and then renting them back to you for what you'd have paid in mortgage, plus extra on top of that to cover expenses. You'll always be a sharecropper, now that you've been taught to believe that anything else is foolish. Once I can afford enough to do it, I'll buy another home myself and rent it out to someone like you. And I'll stand there with a sheepish grin while he laughs that he got one over on me, hoping that he never realizes otherwise.
  - hnnewguy 12y ago
    >I'll buy another home myself and rent it out to someone like you Except I own my home... I love people who have determined that they've found some trick to beat the market. "Oversized asset returns! All you need to do is buy real estate!". How many late-night TV seminars did you attend to to obtain this knowledge? One day the cheap money will disappear, and the speculators (like you) will go bankrupt. Then they'll stiff their creditors, blame the banks, and the public will pick up the tab...again.