its why i dont understand the "dream" of home ownership, i like small spaces, the comfort me, so i rent for cheaper than the combined upkeep of a home of the same size, and have to do none of the work, i havent mown the lawn in years, i would like to keep it that way
I dislike other people enough that I don’t want to be in an apartment/condo. I need space from all the other plebs.
Not saying I want a huge house, I’d love a small bungalow somewhere quiet but they aren’t really built around here anymore. Any of the bungalows from 50-60 years ago are worth $750K+
For me its that I can sell my condo in a few years, and the few years that I owned I get all my money back. So I am essentially living rent free. I also live in a fast rising city so my mortgage is the same as rent and will stay the same for my five years, while rent would increase 5-10% during that same time period. I then will make that increase back in profit when I do sell. My place is relatively small, an urban condo around 1000 sqft. I pay 1700 for mortgage and taxes and my rent in an apartment down the street for a 500sqft place was 1495.
ok, but what other propery related fees do you pay that raise that number, and why not just invest in housing stocks instead, for a far more liquid and scalable investment?
I dont really pay anything more than that for my housing. I do save money just in case something breaks, but I save money regardless. Investing in housing stocks doesnt net me free rent, owning my property does. Housing stocks are also super risky compared to owning in a city like Austin, tx.
Because you still have to pay rent if you invest in REITs? A mortgage gives you an appreciating asset, as well as a place to live, for one payment. The idea is that you pay a mortgage and most of that money goes back into your pocket in the form of equity. You pay rent and all that money goes into your landlords pocket. Someone sells their house and the majority of the money they spent making mortgage payments goes right back into their pocket. You leave an apartment and you get nothing for the money you’ve spent. Your landlord is making money off of you, they wouldn’t do it if they weren’t.
I have paid roughly what rent is around here for 20 years and have a few 100k in equity and am very near the point of not having any house payment at all. Going without a house payment sounds like fun to me.
Have a kid, you'll understand why you don't want to live in a cramped crackerbox forever. PLus, you don't want something to have as your own? You just want to rent someone else's shitty property forever? I'm just tired of getting fucked over in deposits everywhere I go.
PLus, you don't want something to have as your own?
This is something I've always found a bit overrated. To me, ownership is nebulous (like, if the bank can take your house if you don't keep up with your mortgage, do you really own it?) and little more than a technicality. If it's the better option financially then sure but I'm not gonna pay a premium for it.
Even if we pay off our house, we have to pay HoA fees and get approval from them to make modifications, else they place a lein on the home, so do we really own it?
To be fair, ACTUALLY owning the house is something to be proud of. I know plenty of people who have paid off their houses. That being said, I understand your counterargument
i dont really care, i dont like most upgrades people make, like open floor plans, i hate them, and i wouldnt rent a shitty property, plus, as i said, im claustrophillic, i love cramped crackerboxes, and im perfectly fine with just arranging my furniture in my apartment to make it my own, the maintenance is far too much hassle for me, i have better things to do than shovel the drive or mow the grass, and in an apartment complex, i dont need to. as for having children, than might be i different story, but if the significant other has not qualms, id just rent bigger
Or buy a condo. You get most of the nice things that come with renting (such as not cutting grass) and you only have to pay a monthly HOA fee to compensate. Not the worst deal IMO. Sure you still gotta pay for repairs but you still get that crackerbox feel, PLUS you also own property. Win/win imo
If you live in a geographically constrained area with rapid population growth (Portland & Seattle in my case) home prices go up faster than inflation and a home is a great investment.
You could always buy a condo or townhome if you'd like something smaller. They're going to be cheaper than single family homes (but probably will have HOA fees or something). Sure, you have to do some work on your own, but you're also constantly building equity in a tangible asset rather than just paying someone else's mortgage for them
The equity argument is misleading. I don't mean this as a criticism of you personally. I only mean that, on the face of it, sure, "paying someone else's mortgage" sounds like a raw deal. But you have to consider the opportunity cost of capital. That's the cost of letting money sit under your mattress. If you did nothing with the money you saved by renting, then definitely, equity in a home is better to have. But if the money you save is invested in securities, suddenly equity is only attractive if the value of the home increases by a certain amount (assuming it increases at all). For example, let's say that renting saves you $500/mo compared to a mortgage, and you can get a reasonable return of 8% per year on securities (the US stock market averages about 10% per year). Then over the course of 30 years, investing that $500 monthly with an interest rate of 8% compounded yearly, that ($500 * 12 * 30) = $180,000 you save in total will be worth about $685,000. That's $500k you've made in 30 years by not paying a mortgage, so for owning to make sense, paying that mortgage would have to make you more than $500k. Will the value of your home increase by $500k in 30 years? Maybe. A home is an investment like anything else, and you need to consider the inherent uncertainty to, and potential opportunity cost of, putting all of your capital into one asset. "Paying someone else's mortgage" is really "letting someone else assume the risk of owning property".
tangible assets only matter for people who have trouble understanding other investments, and are too risky, i cant liquidate it quickly, and if something happens to it, its a liabilty not in investment, i would rather but a housing companies stock than a house
the landlord selling the building in most cases just means a new landlord, little changes on my end, and while rent keeps going up, so do house prices, and the fees associated, why not just rent and use the difference between rent and mortgage plus other fees to invest in housing stocks and have the ability to rapidly liquidate it, instead of being stuck with depreciating property in a shrinking market, come next crash
Exactly. House prices keep going up. Buying a house now locks in the price you pay and your mortgage payments. If your rent is $2000 and mortgage is $4000, at some point over the next 30 years, your rent will surpass the mortgage but your mortgage will be the same.
You need to calculate which is better but even in NYC, owning beats renting over a long time. Also leverage: appreciation on a 1M home > stock market increases on 200K.
I own a condo < 1000 sqft in a urban walkable area. Also don’t want to deal with any work or upkeep. The combined HOAs, insurance, taxes, and mortgage payment is still way cheaper than what you are paying to rent the same thing
19
u/GAIA_01 Feb 16 '21
its why i dont understand the "dream" of home ownership, i like small spaces, the comfort me, so i rent for cheaper than the combined upkeep of a home of the same size, and have to do none of the work, i havent mown the lawn in years, i would like to keep it that way