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drk posted:I read an article earlier this week on renting versus buying, and its actually somewhat complicated. A lot of Americans have the impression that renting is throwing money away, when in reality home owners "throw away" a lot of money on interest, taxes and insurance that renters do not. Additionally, the opportunity cost of buying a home is non trivial. Check out the NY Times Rent or Buy calculator. It's absolutely phenomenal and gives you good perspective on what things potentially look like when making the decision. A big part of the picture is also mobility. If you want to move after buying a home such as a expensive place NYC or LA it can literally cost you a ton money to leave. On the other hand, if you are able to put down 20% or outright buy a home you can save an absurd amount of money. NYC Rent or Buy Calculator With the current market the way it is I think overall it makes much, much more sense to rent especially if you are sensitive to changes in cost. When you rent, your monthly payment will never change. Gucci Loafers fucked around with this message at 18:50 on Nov 23, 2023 |
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Nov 23, 2023 18:16
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Antillie posted:I really wish people would stop worshiping home equity as some magical path to wealth. But as crappy of a path as it is, its the only path most people are willing to take for one reason or another. Homeownership in the United States is a borderline religion. It's absolutely insane. Older generations have screwed themselves into positions where they have all their wealth in their home screwing over future generations with high housing costs.
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Nov 23, 2023 18:29
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Gucci Loafers posted:When you rent, your monthly payment will never change. What? Why didn't anyone ever tell my old land lords this? I recall rent going up by $100-$200 a month every year for three years. Meanwhile my mortgage payments over the past ~15 years went up by ~$50 a month each year due to my state's cap on property tax increases.
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Nov 23, 2023 18:56
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Gucci Loafers posted:Older generations have screwed themselves into positions where they have all their wealth in their home screwing over future generations with high housing costs. Sadly my in laws are in this position. They own a home and land that is worth a bit north of four million dollars. (The value is in the land, not the old rickety home. Its enough to become a sub division or shopping center and in the right place for either.) But due to current interest rates and general fears about the economy they can't find a buyer. So they are stuck squeaking by on social security, a modest pension, and their meager savings while sitting on an asset that can, on paper, give them an extremely comfortable retirement. Antillie fucked around with this message at 19:05 on Nov 23, 2023 |
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Nov 23, 2023 19:03
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Antillie posted:What? Why didn't anyone ever tell my old land lords this? I recall rent going up by $100-$200 a month every year for three years. Meanwhile my mortgage payments over the past ~15 years went up by ~$50 a month each year due to my state's cap on property tax increases. For the duration of the rental agreement, it will not change. At the end of it, you are also in position where you can potentially negotiate or possibly find a different place that costs less.
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Nov 23, 2023 19:08
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Gucci Loafers posted:For the duration of the rental agreement, it will not change. At the end of it, you are also in position where you can potentially negotiate or possibly find a different place that costs less. I am all for pro renting, but this is a view through rose colored glasses to put it mildly. Also, I’m sure a landlord is going to be super generous on maintenance if you somehow manage to negotiate and get them to lower your rent. Negotiations, at best, is “can my rent stay the same or only go up $100?”
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Nov 23, 2023 19:13
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Duckman2008 posted:I am all for pro renting, but this is a view through rose colored glasses to put it mildly. It not rose colored at all especially with market changes in places like San Francisco or NYC. I personally know people who've saved several thousands in those markets. The only things they did was sit down with their landlords basically tell them there are a lot of vacant units in the building and nearby while inviting them in to their unit that was clearly clean and well kept. They are absolutely interested in tenants that are responsible, kind, courteous and don't make a mess.
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Nov 23, 2023 19:18
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For me it was always "Your rent is going up by X per month. If you don't like it you can move." There was never any willingness to negotiate with or interest in trying to keep any of the current tenants. All that mattered was getting that higher payment. Having to move every year just to try and keep your rent from going up too much seems like a horrible pain in the rear end. And I'm not sure it would even work as rents never seemed to vary that much in an area anyway for similar places.
Antillie fucked around with this message at 22:36 on Nov 23, 2023 |
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Nov 23, 2023 19:43
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If you tried to negotiate your rent in my city you’d be laughed at.
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Nov 23, 2023 19:59
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Landlords hate this one weird trick! Gets them every time ! I’m sure there could be an area where that could work, but there is no way that would work for whatever majority of Americans renting.
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Nov 23, 2023 20:00
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Last time I tried to negotiate my rent my landlord slapped me across the face and called me a loving moron.
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Nov 23, 2023 20:05
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tbf I live with my mother
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Nov 23, 2023 20:05
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In my limited experience with renting, I've found negotiating with corporate landlords is impossible. If the computer says rent go up, rent go up. But, individual owners are generally very reasonable.
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Nov 23, 2023 20:07
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The math for rent vs buy is varied and n-dimensional so there is no beep boop optimized solution for everyone. It’s as much a lifestyle decision as a financial one. That said, I’m not paying a single cent early on my 30 yr at 2.7% and if anything I wish I borrowed more to buy more house when I did. Happy where I’m at and all but drat that was free money — which of course was/is a big contributor to the affordability crisis.
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Nov 23, 2023 20:32
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I was given a choice between 10 years at 0.99%, 20 at 1.2%, and 30 at 1.42%, so I picked 30 because you can transfer the interest rate to your next mortgage where I live (up to the total sum) European rates were just stupid a while ago, and now we are hurting for it
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Nov 23, 2023 21:41
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Gucci Loafers posted:It not rose colored at all especially with market changes in places like San Francisco or NYC. I personally know people who've saved several thousands in those markets. The only things they did was sit down with their landlords basically tell them there are a lot of vacant units in the building and nearby while inviting them in to their unit that was clearly clean and well kept. Even if this were universal - and it absolutely isn't - it only works if there are actually vacant units in the building. This feels like "just walk into the bank with your resume, look the hiring manager in the eye, and give him a firm handshake" but for housing.
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Nov 23, 2023 21:42
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I'm in SF and never heard of anyone lowering their rent without moving to Oakland/Daly City/Alameda. That's amazing if you can pull it off.
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Nov 23, 2023 21:50
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Moving sucks rear end, too. It costs money, stuff always breaks, and you will end up losing things. One way or another you end up paying
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Nov 23, 2023 21:52
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Gucci Loafers posted:For the duration of the rental agreement, it will not change. At the end of it, you are also in position where you can potentially negotiate or possibly find a different place that costs less. Moving sucks rear end and can be pretty expensive/time consuming. Especially if you have kids and you change their school district.
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Nov 23, 2023 21:59
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How do you know if someone has a mortgage with a 2.9% interest rate? Don’t worry, they’ll tell you.
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Nov 23, 2023 22:43
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Awkward Davies posted:How do you know if someone has a mortgage with a 2.9% interest rate? Don’t worry, they’ll tell you. Can you imagine if that person was also vegan...
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Nov 23, 2023 22:50
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Renting in a place without solid renter protections just sucks if you have kids/pets/just a lot of stuff that's hard to move
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Nov 23, 2023 22:51
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If I had a million dollars I would buy a house solely to spite once and future landlords of all kinds. gently caress a landlord, bitches hate landlords.
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Nov 24, 2023 00:16
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Antillie posted:You are correct. A house is a terrible investment in most cases. It costs a bunch of money in upkeep, repairs, taxes, and insurance that you never get back. It is also highly unlikely to keep pace with the S&P500 over the long term. But that said it is still an investment in a practical sense. Or at the very least a savings account that tends to slightly outpace inflation and is somewhat hard to pull money from. A savings account that keeps up with inflation that is hard to pull money out of isn't great as investments go. But its a great thing for most people. It fits what most people need so well that most people desperately need it for their own good. Sure it often results in scary levels of over concentration into a single asset but it still better than trying to live off of just social security. I don't really have anything to add to this, I just wanted to say thanks for breaking it all down and I fully appreciate your point about solutions needing to account for what average people are likely to do. Pollyanna posted:If I had a million dollars I would buy a house solely to spite once and future landlords of all kinds. gently caress a landlord, bitches hate landlords. I feel similarly but then I'd be forced into an HOA and that doesn't sound much better (I don't know how it is outside of CO but around here you really can't avoid them).
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Nov 24, 2023 01:42
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Awkward Davies posted:How do you know if someone has a mortgage with a 2.9% interest rate? Don’t worry, they’ll tell you. 2.25 buddy  (No im not paralyzed trying to figure out how I can afford a larger reasonably sized home for my growing family and am grateful to own at all, thanks for asking)
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Nov 24, 2023 01:57
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godwin's law for BFC is that every thread eventually turns to discussion of buying or renting or pricing or landlording homes happy thanksgiving all, i'm thankful for the roof over my head
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Nov 24, 2023 03:54
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Happy thanksgiving, don’t forget to tip your landlord
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Nov 24, 2023 04:09
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raminasi posted:Even if this were universal - and it absolutely isn't - it only works if there are actually vacant units in the building. This feels like "just walk into the bank with your resume, look the hiring manager in the eye, and give him a firm handshake" but for housing. It's not universal. Some markets will raise prices no matter what simply due to low supply and some corporate property groups are completely dedicated to their  pricing algorithms so much they literally do not care if they end up losing the nicest, cleanest most responsible tenants and the local office staff have little input. If you want to dig deeper their are smaller landlords freaking out over losing good tenants in the Southwest namely Austin because they started using pricing algorithms...and they didn't work out as they thought. Tenant churn costs them time and money as does having empty units. Being a landlord is business. While they'd all prefer to make money they sure as hell don't lose money either or at least breakeven. spwrozek posted:Moving sucks rear end and can be pretty expensive/time consuming. Especially if you have kids and you change their school district. This is true. And there are some school districts that are freaking awful so much they literally shouldn't exist. There's always going to be a cost-benefit analysis but I think we are getting off track. The original discussion here was "renting vs. buying" and if you are sensitive to changes in pricing renting the overwhelming majority of the time it is going to be better to rent because during your agreement the price isn't going to change. On the other hand, owning a home not only comes with maintenance but other unexpected things like changes in property taxes or a county appraisers deciding your home is now value much, much, more than in the past and you really don't have a way to negotiate. You can't go to the fed and tell them to lower interest rates so you can refinance. On the flipside, you potentially have that flexibility with renting and it might result in significant savings. Gucci Loafers fucked around with this message at 23:37 on Nov 24, 2023 |
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Nov 24, 2023 23:31
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Gucci Loafers posted:There's always going to be a cost-benefit analysis but I think we are getting off track. The original discussion here was "renting vs. buying" and if you are sensitive to changes in pricing renting the overwhelming majority of the time it is going to be better to rent because during your agreement the price isn't going to change. On the other hand, owning a home not only comes with maintenance but other unexpected things like changes in property taxes or a county appraisers deciding your home is now value much, much, more than in the past and you really don't have a way to negotiate. You can't go to the fed and tell them to lower interest rates so you can refinance. I don't have more than anecdata for you, but in every rental market I've been in or known people to be in, "Your rent won't change during the rental agreement" actually means "every one or two years your housing costs go up by an unpredictable amount." I take your point that this isn't unique to renting, but "the big benefit of renting is stability in housing costs" would be considered utterly disconnected from reality by every renter I've known. (Obviously this doesn't apply to rent-controlled units, but those are exceptions.)
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Nov 24, 2023 23:54
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That's a fair reply but is it true that rent increases are completely unpredictable? Are they that wild across the United States? As far as I know they are generally quite moderate and many cities have at least done things like capping the maximum increase or enforcing things like you must give the 3-6 months notice of any increase in pricing. The way I see it is that you have greater control over your cost of housing via a contract and mobility. It won't change during a lease and if changes do occur renewal time comes, becomes too expensive you can simply take your stuff and leave somewhere else that's more affordable. Doing the same when you have a mortgage is often much, much more complicated. Don't get me wrong, you can certainly still come out ahead buying. It depends on many factors that are difficult to predict but if there is someone who sensitive to any changes in housing costs I would still err on the side of renting over buying. Gucci Loafers fucked around with this message at 00:23 on Nov 25, 2023 |
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Nov 25, 2023 00:19
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On the short term, rent is the most you'll pay. Your mortgage (PITI) is the least you'll pay. Longer term you're subject to rent increases vs ongoing house upkeep. When renting, you can move somewhere cheaper if the increase is too much; there may be downsides to doing so. As a homeowner, you can often defer maintenance if you can't afford to fix it today; there may (will) be downsides to doing so. It's complicated.
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Nov 25, 2023 00:40
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Gucci Loafers posted:That's a fair reply but is it true that rent increases are completely unpredictable? Are they that wild across the United States? As far as I know they are generally quite moderate and many cities have at least done things like capping the maximum increase or enforcing things like you must give the 3-6 months notice of any increase in pricing. Your describing rent control, which certainly exists some places. California has statewide rent control but it still allows for pretty big increases: its limited to the lesser of 10% or inflation + 5%. So, over a number of years you could see your rent raised by significantly more than inflation. During a time of "normal" 2% inflation, landlords could raise rents by 7% per year, which is quite a bit more than wages tend to go up.
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Nov 25, 2023 00:58
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Fighting illegal rent increases also requires tenants to have time, money, and the will and resources to do so. Those are not insignificant.
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Nov 25, 2023 01:57
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spf3million posted:On the short term, rent is the most you'll pay. Your mortgage (PITI) is the least you'll pay. Good quote. spf3million posted:It's complicated. True but a good thing to look are the causes of bankruptcy. In the past it used to be medical bills now it's houses, cars, vacations or weird things like weddings.
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Nov 25, 2023 02:00
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https://m.youtube.com/watch?v=L4qmDnYli2E
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Nov 25, 2023 02:02
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Gucci Loafers posted:That's a fair reply but is it true that rent increases are completely unpredictable? Are they that wild across the United States? As far as I know they are generally quite moderate and many cities have at least done things like capping the maximum increase or enforcing things like you must give the 3-6 months notice of any increase in pricing. In the city I live in, when my lease is up, my landlord can raise my rent by as much as they want as long as they give me a month of notice. Moving at best costs me a couple of months of gross salary in moving costs and broker fees (plus the psychological energy to actually find a new place and move) and at worst completely upends my life because I have to leave the city and thus my personal and professional networks. "Simply take my stuff and leave" is not a fair characterization of the process - it's easier than selling a home, but it's not nothing. I think you're underestimating the emotional weight of the long-term view: If I rent, my housing cost over any particular one- or two-year period is very stable, but in the long term I have no idea what I'm going to be paying or any reliable way to estimate it. (Or even where I'm going to be living in N years!) If I buy, I know my mortgage rate, and with some legwork up front I can make an estimate for my maintenance and tax burden that's as conservative as I need to feel comfortable.
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Nov 25, 2023 02:48
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raminasi posted:In the city I live in, when my lease is up, my landlord can raise my rent by as much as they want as long as they give me a month of notice. Moving at best costs me a couple of months of gross salary in moving costs and broker fees (plus the psychological energy to actually find a new place and move) and at worst completely upends my life because I have to leave the city and thus my personal and professional networks. "Simply take my stuff and leave" is not a fair characterization of the process - it's easier than selling a home, but it's not nothing. I am not exactly sure what to say but that seems quite expensive to move? I would think for most of Americans getting rental housing then moving is maybe a few hours on major housing websites, a week or two of visiting apartments along with giving a friend with a truck  or buying them a nicer dinner. Hell, actual movers even between cities is a grand or two or just sell everything at take a small loss but just get new stuff.But as I've said before, there's always going to be a cost benefit analysis here. Maybe my generalization isn't that great but it is clearly easier than selling a home is much easier than leaving a rental unit. raminasi posted:I think you're underestimating the emotional weight of the long-term view: If I rent, my housing cost over any particular one- or two-year period is very stable, but in the long term I have no idea what I'm going to be paying or any reliable way to estimate it. (Or even where I'm going to be living in N years!) If I buy, I know my mortgage rate, and with some legwork up front I can make an estimate for my maintenance and tax burden that's as conservative as I need to feel comfortable. I agree there is in a way stability with knowing you will have a place to live in a certain place and you are able to estimate expenses. The thing is in the long term is that you have little knowledge how the entire economy is going to change. Will you be able to have consistent income to be able to pay for a mortgage over decades? Are you at the point in you career were you will be able to find another job that pays well and is enjoyable? Will it still be in the same area or will you have an awful terrible commute? Or will it be shipped overseas? Or will other jobs leave too but yours remain but the infrastructure of the city collapse due to everyone else leaving? These kind of questions are tough part with homeownership. Again, it can absolutely work out or for some it's a wash and they break even so it doesn't really matter. These reasons though are why I say I err on the side of renting over owning. It's not super hard fast rule but a good practice that more of us should think seriously about more often than not especially given that housing is one of leading causes of American bankruptcy. Gucci Loafers fucked around with this message at 02:53 on Nov 26, 2023 |
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Nov 26, 2023 02:49
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if someone wants to write a thoughtful "should you rent or should you buy?" OP, by all means, please make a new thread so that this discussion can be focused over there
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Nov 26, 2023 03:39
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“$20 and some beer” stops being enough to cover moving costs as you get older.
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Nov 26, 2023 05:20
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I moved from Chicago to Calgary about 2 months ago. PODS charged me ~$3700 total.
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