Guy makes $160,000 and barely making it month to month...

[Zzzz1]

You conveniently pick a case where someone bought a house on the cheap. What do you recommend all those who are leaving university right now? To buy into sky high housing prices? Are you claiming there is no risk involved in home ownership regardless of when someone times a home purchase? I would in that case completely disagree. When comparing mortgage purchases and renting one has to factor in all aspects of the trade.

Have to disagree, a close friend of mine has 2 houses he bought over the last 35 years, the houses he purchased have increased in value over that time, one is paid off and the other I believe owes about $150,000, one is rented the other is a 2 family, the rents far exceed what he owes in mortgage and taxes, he clears more in rent in a year than what you would make on a million dollar portfolio in the s&p

Rents are insane right now. I purchased my place and living cheaper than if someone were to rent my place....if rents were to drop to where my mortgage and taxes are there would be what we call another crisis and probably a deep deep recession which means my costs stay pretty much flat as long as taxes don't rise too much while rents will continue to rise in the years to come....plus with housing prices jumping another 5% in the last year I can't complain....

 

[Zzzz1]

You are seriously messed up in your head. That's all I can say

The honest joe is a pot smoking and who knows what else druggie, which is why he's so screwed up. He treats his very gorgeous wife like shite to a lot of the time.

Not being interested in drugs, I'll take living wayyyy beyond his means guy 2, wasnt like his wife wasnt playing around

Everyone is screwed up in some way, me sex addict, a do it by the rules is still screwed up, later in life you'll realise there is no point and you should of had more fun.

 

[poorboy]

I know!

Cocaine & hookers or boys.

For the record, that was social commentary, not personal preferences.

 

[marketsurfer]

Facebook engineers struggling with sky-high rents ask Mark Zuckerberg for help

Tech workers making six figures in Silicon Valley say they're still struggling.

Read more: http://www.cnbc.com/id/104319084

Sent from the CNBC app. Available on the App Store



Sent from my iPhone

 

[Rationalize]

How many wealthy renters do you know?
I agree about flexibility, but owning RE is one of the best ways to accumulate wealth.
Longterm, the only thing a renter has to show for it are a bunch of canceled checks. The owner of RE has equity, and long term, no debt.

Buying RE is mostly about "forced saving".
Even an idiot son pays the mortgage for fear of losing his house.
Equity indexes outperform RE *after costs*.

On a aside - How many wealthy technical analysts / chartist traders do you know?

 

[Rationalize]

Wealthy people lease/rent their toys because they'd rather keep their capital invested. Wealthy people understand the value of debt and aren't scare of it like middle-class people are.

As for their home, wealthy people buy because few rentals are available in their price range. The majority of rental homes are in the median price range or lower. Plus, buying allows more flexibility with customization. The decision to buy a house is a practical decision more than a financial one.

The rental yield on high end property is generally much lower than median range.
You can rent it for less than your capital cost.

 

[Rationalize]

My first reaction is to say that's whatever studies are showing this got to be wrong, at least on a global scale. There is a thriving rental industry and they obviously make money owning real estate and then renting it out. Intuitively, when choosing between a profitable global industry and a "study", I'd say the former is got to be right and the latter is full of shit.

Unless you gonna tell me that all of rental industry vig comes from the economy of scale as opposed to the actual convenience yield on the real estate?

Obviously make money while renting it out?

Or sitting long, and waiting for prices to rise - renting it out to reduce their negative carry slightly?

In some countries you must make a property "available for rent" in order to expense the mortgage interest pre-tax. The interest can be sometimes offset against other income un-associated with the RE investment too... Renting a property out while waiting for a capital gain is a tax trade as much as anything. You can end up paying bank interest instead of tax to some degree - which is interesting.

There seem to be cultural aspects also / ego / status - and lying about net returns.

 

[DHOHHI]

I agree,
I have no sympathy for these type of stories.

I live rather extremely frugally. Doing so is not that hard or difficult to embrace
It's kind of amazing how frugally you can live or exist, if you really make it happen. and living frugally doesn't necessarily have to mean living a crap existence.

Some people are unwilling to live within their means. Like you, I lived below my income level when I was in a corporate job. When I left that job to trade 21 years ago I had paid off my mortgage and had no debt. Some people want to keep up with the Jones'. Others live within, or below, their means and accumulate wealth. If this guy is having to borrow $$$ now and then to get by then he's a poor manager of his finances or is making some bad spending choices.

 

[DHOHHI]

That is total nonsense. Longterm, renting comes to almost the exact cost than owning when you factor in property taxes, repairs and renovations, the giving up on the ability to stay flexible and move quickly when opportunities elsewhere arise. Not saying renting is better I am just saying many studies have shown that renting is not more costly than owning.

Depends on where you live and when you bought. Rent is money down the drain. Owning gives you a chance to have $500K tax free gains multiple times in your life.

 

[i960]

Sadly mass transit sucks and the Peninsula where you can take Caltrain is more expensive than the City.

This is false. There are many spots along the peninsula in San Mateo county that are *not* more expensive than the city proper.

You cannot take Palo Alto, Menlo Park, etc and represent them as the peninsula because they are outliers.

My wife and I live just outside of SF and through frugal living / hard work / not buying unneeded bullshit, have been able to save up quite a bit of money. I'm also the only high wage earner in the family unlike these tech DINKs with an advantage who can't seem to not let a dollar go unspent. Been here for 20+ years and this is yet another typical SF/Bayarea bubble that will end in tears.

Stop eating out all the time.
Stop buying things you don't need.
Stop buying things on credit and creating liabilities for yourself.