why throw money away renting?!

[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.

[EconProf]

The original subject “throwing your money away on rent” is still a falacy, in that the renter gets a place to live for a month.
The rent vs. buy decision is an ongoing discussion topic with many considerations beyond the simple one of mortgage payment vs. rent, including:
1. Tax ramifications
2. Appreciation/depreciation probabilities
3. Freedom to move
4. Pride of ownership
5. Freedom to alter/modify home
6. Cost of plumbing/el/AC/WH/roof etc. repairs & replacements (widely underestimated)
7. Opportunity cost of equity
8. Your guess of interest rate direction

One could list more, but this shows the decision is more personal and more complicated than it first appears.
Most of the posts here selectively pick the dates they use to justify their foregone conclusion. As TG shows, its all about timing. We can say with the evidence now available, that ON AVERAGE, anyone who bought before about 2002 has probably broken even pricewise. This means those who bought between 2002 and last month are behind. At the rate prices are still falling, breakeven may be back to 1999 or 1998 before we hit bottom–who knows? But the group losing or breaking even is rapidly growing in size, and may soon constitute a majority of current homeowners.

[EconProf]

The original subject “throwing your money away on rent” is still a falacy, in that the renter gets a place to live for a month.
The rent vs. buy decision is an ongoing discussion topic with many considerations beyond the simple one of mortgage payment vs. rent, including:
1. Tax ramifications
2. Appreciation/depreciation probabilities
3. Freedom to move
4. Pride of ownership
5. Freedom to alter/modify home
6. Cost of plumbing/el/AC/WH/roof etc. repairs & replacements (widely underestimated)
7. Opportunity cost of equity
8. Your guess of interest rate direction

One could list more, but this shows the decision is more personal and more complicated than it first appears.
Most of the posts here selectively pick the dates they use to justify their foregone conclusion. As TG shows, its all about timing. We can say with the evidence now available, that ON AVERAGE, anyone who bought before about 2002 has probably broken even pricewise. This means those who bought between 2002 and last month are behind. At the rate prices are still falling, breakeven may be back to 1999 or 1998 before we hit bottom–who knows? But the group losing or breaking even is rapidly growing in size, and may soon constitute a majority of current homeowners.

[EconProf]

The original subject “throwing your money away on rent” is still a falacy, in that the renter gets a place to live for a month.
The rent vs. buy decision is an ongoing discussion topic with many considerations beyond the simple one of mortgage payment vs. rent, including:
1. Tax ramifications
2. Appreciation/depreciation probabilities
3. Freedom to move
4. Pride of ownership
5. Freedom to alter/modify home
6. Cost of plumbing/el/AC/WH/roof etc. repairs & replacements (widely underestimated)
7. Opportunity cost of equity
8. Your guess of interest rate direction

One could list more, but this shows the decision is more personal and more complicated than it first appears.
Most of the posts here selectively pick the dates they use to justify their foregone conclusion. As TG shows, its all about timing. We can say with the evidence now available, that ON AVERAGE, anyone who bought before about 2002 has probably broken even pricewise. This means those who bought between 2002 and last month are behind. At the rate prices are still falling, breakeven may be back to 1999 or 1998 before we hit bottom–who knows? But the group losing or breaking even is rapidly growing in size, and may soon constitute a majority of current homeowners.

[EconProf]

The original subject “throwing your money away on rent” is still a falacy, in that the renter gets a place to live for a month.
The rent vs. buy decision is an ongoing discussion topic with many considerations beyond the simple one of mortgage payment vs. rent, including:
1. Tax ramifications
2. Appreciation/depreciation probabilities
3. Freedom to move
4. Pride of ownership
5. Freedom to alter/modify home
6. Cost of plumbing/el/AC/WH/roof etc. repairs & replacements (widely underestimated)
7. Opportunity cost of equity
8. Your guess of interest rate direction

One could list more, but this shows the decision is more personal and more complicated than it first appears.
Most of the posts here selectively pick the dates they use to justify their foregone conclusion. As TG shows, its all about timing. We can say with the evidence now available, that ON AVERAGE, anyone who bought before about 2002 has probably broken even pricewise. This means those who bought between 2002 and last month are behind. At the rate prices are still falling, breakeven may be back to 1999 or 1998 before we hit bottom–who knows? But the group losing or breaking even is rapidly growing in size, and may soon constitute a majority of current homeowners.

[EconProf]

The original subject “throwing your money away on rent” is still a falacy, in that the renter gets a place to live for a month.
The rent vs. buy decision is an ongoing discussion topic with many considerations beyond the simple one of mortgage payment vs. rent, including:
1. Tax ramifications
2. Appreciation/depreciation probabilities
3. Freedom to move
4. Pride of ownership
5. Freedom to alter/modify home
6. Cost of plumbing/el/AC/WH/roof etc. repairs & replacements (widely underestimated)
7. Opportunity cost of equity
8. Your guess of interest rate direction

One could list more, but this shows the decision is more personal and more complicated than it first appears.
Most of the posts here selectively pick the dates they use to justify their foregone conclusion. As TG shows, its all about timing. We can say with the evidence now available, that ON AVERAGE, anyone who bought before about 2002 has probably broken even pricewise. This means those who bought between 2002 and last month are behind. At the rate prices are still falling, breakeven may be back to 1999 or 1998 before we hit bottom–who knows? But the group losing or breaking even is rapidly growing in size, and may soon constitute a majority of current homeowners.

[patientrenter]

If home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.

As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

[patientrenter]

If home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.

As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

[patientrenter]

If home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.

As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

[patientrenter]

If home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.

As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

[patientrenter]

If home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.

As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

[barnaby33]

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

Unless for some weird reason we end up back on a gold standard. Fiscal discipline is a bitch for the debtor class.

[barnaby33]

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

Unless for some weird reason we end up back on a gold standard. Fiscal discipline is a bitch for the debtor class.

[barnaby33]

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

Unless for some weird reason we end up back on a gold standard. Fiscal discipline is a bitch for the debtor class.

[barnaby33]

It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.

Unless for some weird reason we end up back on a gold standard. Fiscal discipline is a bitch for the debtor class.

[Author]

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