why throw money away renting?!

[patientrenter]

[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]

I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.

About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)

[nostradamus]

As of this January I’m break-even rent/own. Been here 10 years and my calcs are based on what I was paying in rent 10 years ago when I bought. Kinda wish I sold at the peak but oh well, I still live here.

[nostradamus]

As of this January I’m break-even rent/own. Been here 10 years and my calcs are based on what I was paying in rent 10 years ago when I bought. Kinda wish I sold at the peak but oh well, I still live here.

[nostradamus]

As of this January I’m break-even rent/own. Been here 10 years and my calcs are based on what I was paying in rent 10 years ago when I bought. Kinda wish I sold at the peak but oh well, I still live here.

[nostradamus]

As of this January I’m break-even rent/own. Been here 10 years and my calcs are based on what I was paying in rent 10 years ago when I bought. Kinda wish I sold at the peak but oh well, I still live here.

[nostradamus]

As of this January I’m break-even rent/own. Been here 10 years and my calcs are based on what I was paying in rent 10 years ago when I bought. Kinda wish I sold at the peak but oh well, I still live here.

[NotCranky]

The problem is that it isn’t as easy to get into a better own vs rent scenario without buying something. Of course timing is important…but so is time.

How about the people who say you are leaving your equity “trapped” in your house instead of liberating it and putting it in higher return investments? Lets see,I could have gotten out that 250k that I have “lost” in equity and be upside down with an increased monthly payment and have a losing stock portfolio, if I had only liberated it earlier.

Lots of people who put down large payments in the bubble got it by “untrapping equity” in the bubble.Many would have been better off staying in the affordable house and watching the equity swing back down.Easy come easy go.

[NotCranky]

The problem is that it isn’t as easy to get into a better own vs rent scenario without buying something. Of course timing is important…but so is time.

How about the people who say you are leaving your equity “trapped” in your house instead of liberating it and putting it in higher return investments? Lets see,I could have gotten out that 250k that I have “lost” in equity and be upside down with an increased monthly payment and have a losing stock portfolio, if I had only liberated it earlier.

Lots of people who put down large payments in the bubble got it by “untrapping equity” in the bubble.Many would have been better off staying in the affordable house and watching the equity swing back down.Easy come easy go.

[NotCranky]

The problem is that it isn’t as easy to get into a better own vs rent scenario without buying something. Of course timing is important…but so is time.

How about the people who say you are leaving your equity “trapped” in your house instead of liberating it and putting it in higher return investments? Lets see,I could have gotten out that 250k that I have “lost” in equity and be upside down with an increased monthly payment and have a losing stock portfolio, if I had only liberated it earlier.

Lots of people who put down large payments in the bubble got it by “untrapping equity” in the bubble.Many would have been better off staying in the affordable house and watching the equity swing back down.Easy come easy go.

[NotCranky]

The problem is that it isn’t as easy to get into a better own vs rent scenario without buying something. Of course timing is important…but so is time.

How about the people who say you are leaving your equity “trapped” in your house instead of liberating it and putting it in higher return investments? Lets see,I could have gotten out that 250k that I have “lost” in equity and be upside down with an increased monthly payment and have a losing stock portfolio, if I had only liberated it earlier.

Lots of people who put down large payments in the bubble got it by “untrapping equity” in the bubble.Many would have been better off staying in the affordable house and watching the equity swing back down.Easy come easy go.

[NotCranky]

The problem is that it isn’t as easy to get into a better own vs rent scenario without buying something. Of course timing is important…but so is time.

How about the people who say you are leaving your equity “trapped” in your house instead of liberating it and putting it in higher return investments? Lets see,I could have gotten out that 250k that I have “lost” in equity and be upside down with an increased monthly payment and have a losing stock portfolio, if I had only liberated it earlier.

Lots of people who put down large payments in the bubble got it by “untrapping equity” in the bubble.Many would have been better off staying in the affordable house and watching the equity swing back down.Easy come easy go.

[temeculaguy]

As soon as you release yourself from the mindset that your house is an investment you are free to find financial nirvana. Is renting “throwing money away?” No, but neither is buying. Both are your “housing cost.” When your housing cost is the same to buy or rent, you should buy and lock in a fixed housing cost to hedge inflation. Maybe not this year but over time, inflation has it’s way. If your rent is 2k and you can buy it for under 300k, then do it, in ten years the rent will have risen but the mortgage wont. If your 2k rental costs 400k or 500k, you are throwing money away, not because renting or buying is bad, but because you increased your housing cost too much. Eliminate the potential for appreciation from the equation and you will find clarity.

Case and point: My last rental was $1500, I could have bought it in 2006 when I was first looking to rent for about 375k. Ignoring the fact that it might double in price (which it didn’t) the correct answer is to rent, choosing to rent for half the monthly outlay was the right call. When I moved two months ago I could have bought it for under 175k, if I had wanted that size/style of housing the correct answer would have been to buy at that price because it would have been cheaper or the same price. Up or down in value, my housing cost would go down or stay the same and be locked in.

[temeculaguy]

As soon as you release yourself from the mindset that your house is an investment you are free to find financial nirvana. Is renting “throwing money away?” No, but neither is buying. Both are your “housing cost.” When your housing cost is the same to buy or rent, you should buy and lock in a fixed housing cost to hedge inflation. Maybe not this year but over time, inflation has it’s way. If your rent is 2k and you can buy it for under 300k, then do it, in ten years the rent will have risen but the mortgage wont. If your 2k rental costs 400k or 500k, you are throwing money away, not because renting or buying is bad, but because you increased your housing cost too much. Eliminate the potential for appreciation from the equation and you will find clarity.

Case and point: My last rental was $1500, I could have bought it in 2006 when I was first looking to rent for about 375k. Ignoring the fact that it might double in price (which it didn’t) the correct answer is to rent, choosing to rent for half the monthly outlay was the right call. When I moved two months ago I could have bought it for under 175k, if I had wanted that size/style of housing the correct answer would have been to buy at that price because it would have been cheaper or the same price. Up or down in value, my housing cost would go down or stay the same and be locked in.

[temeculaguy]

As soon as you release yourself from the mindset that your house is an investment you are free to find financial nirvana. Is renting “throwing money away?” No, but neither is buying. Both are your “housing cost.” When your housing cost is the same to buy or rent, you should buy and lock in a fixed housing cost to hedge inflation. Maybe not this year but over time, inflation has it’s way. If your rent is 2k and you can buy it for under 300k, then do it, in ten years the rent will have risen but the mortgage wont. If your 2k rental costs 400k or 500k, you are throwing money away, not because renting or buying is bad, but because you increased your housing cost too much. Eliminate the potential for appreciation from the equation and you will find clarity.

Case and point: My last rental was $1500, I could have bought it in 2006 when I was first looking to rent for about 375k. Ignoring the fact that it might double in price (which it didn’t) the correct answer is to rent, choosing to rent for half the monthly outlay was the right call. When I moved two months ago I could have bought it for under 175k, if I had wanted that size/style of housing the correct answer would have been to buy at that price because it would have been cheaper or the same price. Up or down in value, my housing cost would go down or stay the same and be locked in.

[temeculaguy]

As soon as you release yourself from the mindset that your house is an investment you are free to find financial nirvana. Is renting “throwing money away?” No, but neither is buying. Both are your “housing cost.” When your housing cost is the same to buy or rent, you should buy and lock in a fixed housing cost to hedge inflation. Maybe not this year but over time, inflation has it’s way. If your rent is 2k and you can buy it for under 300k, then do it, in ten years the rent will have risen but the mortgage wont. If your 2k rental costs 400k or 500k, you are throwing money away, not because renting or buying is bad, but because you increased your housing cost too much. Eliminate the potential for appreciation from the equation and you will find clarity.

Case and point: My last rental was $1500, I could have bought it in 2006 when I was first looking to rent for about 375k. Ignoring the fact that it might double in price (which it didn’t) the correct answer is to rent, choosing to rent for half the monthly outlay was the right call. When I moved two months ago I could have bought it for under 175k, if I had wanted that size/style of housing the correct answer would have been to buy at that price because it would have been cheaper or the same price. Up or down in value, my housing cost would go down or stay the same and be locked in.

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