Is owning a home mostly a bad thing?

[nitro]

Quote from WhiteOut56:

-------- that's a very good point

No it isn't. You still have RE taxes from state governments hungry for money, upkeep, which requires to pay workers that demand more money, and when you go to sell your house, you have to have some luck that the market is at least neutral and not a buyers market, and then you pay a RE agent 5%. This sort of scheme may work for a few generations, but when the middle class can no longer afford to buy a house because their wages stay more or less the same and housing is rising ad-infinitum, who you gonna sell to? Same ponzi scheme as described in this thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=180234&highlight=Investing+Catechism

Forget the fact that most people buy more house than they need..

"Capitalism will collapse under the weight of its own internal contradictions." - Karl Marx

 

[Trader666]

LMAO!!! So anything that contradicts your uninformed opinion is misleading? Just how would they have been wealthier by pissing their money away on rent every month instead of building equity that adds to their net worth?

Quote from Bolts:

Those numbers are very misleading. Those numbers don't show you how much wealthier the average home owner could be if he had rented instead.

Oh please... the chart compares equal income levels and you can still get loans with almost nothing down. And if renting is so financially advantageous then where are all the high net worth renters who have benefited so much by flushing their money down the toilet on rent to offset them?

Quote from Bolts:

Oh, and renters also include people who are forced to rent because they have a poor net worth to begin with, so they can't get a loan.

 

[Trader666]

So if you rent a house the landlord pays taxes and upkeep out of the goodness of his heart instead of passing them on?

As for the RE agent... there are cheaper ways but even if you go the full commission route, prices don't always go down and even in a neutral to slightly down market a smart buyer can do just fine.

Quote from nitro:

No it isn't. You still have RE taxes from state governments hungry for money, upkeep, which requires to pay workers that demand more money, and when you go to sell your house, you have to have some luck that the market is at least neutral and not a buyers market, and then you pay a RE agent 5%.

 

[nitro]

Quote from Trader666:

So if you rent a house the landlord pays taxes and upkeep out of the goodness of his heart instead of passing them on?

As for the RE agent... there are cheaper ways but even if you go the full commission route, prices don't always go down and even in a neutral to slightly down market a smart buyer can do just fine.

Yeah, and as you pass them on the number of potential renters goes down. My ex-wife owns a three flat in one of Chicago most desirable neighborhoods. As her costs have gone up, she has done what you just said. With each rent increase, the number of months some of these properties sit not rented goes up, and the amount of time needed to support renting the property goes up. Everyone loses.

 

[Trader666]

So how does that make 15 year mortgages and owning one's house free and clear a bad thing? You're talking about another issue entirely.

Quote from nitro:

Yeah, and as you pass them on the number of potential renters goes down. My ex-wife owns a three flat in one of Chicago most desirable neighborhoods. As her costs have gone up, she has done what you just said. With each rent increase, the number of months some of these properties sit not rented goes up, and the amount of time needed to support renting the property goes up. Everyone loses.

 

[Austintrade]

I agree, I'd rather have my investment in gold

 

[Daal]

In theory renting is more expensive than buying because the landlord is essentially in the same position as a owner but also selling a service(all the costs of maintaining his property plus some kind of profit factor to compensate for his work).

So the guy from the video is not correct when he talks about the costs of fixing the property, taxes, insurance. Those things tend to be embedded in the rent price because landlords are not in the business of losing money and over the long-run will show a long-run profit(I assume the buying and renting RE is not like the Airline business which doesn't show a long-run profit, but that seems a safe bet).

Its possible that some landlords will own property in a negative cashflow basis on the hopes that price appreciation will offset the losses, I assume they are correct most of the time(otherwise they would be out of business eventually), so the 'savings' from the renter, are actually costs in the form of capital gains he didnt get because he didnt buy the property

That said, at any given time prices can get out of whack and the renting vs buying will depend on valuation and the specifics of the person

 

[nitro]

Quote from Daal:

In theory renting is more expensive than buying because the landlord is essentially in the same position as a owner but also selling a service(all the costs of maintaining his property plus some kind of profit factor to compensate for his work).

So the guy from the video is not correct when he talks about the costs of fixing the property, taxes, insurance. Those things tend to be embedded in the rent price because landlords are not in the business of losing money and over the long-run will show a long-run profit(I assume the buying and renting RE is not like the Airline business which doesn't show a long-run profit, but that seems a safe bet).

Its possible that some landlords will own property in a negative cashflow basis on the hopes that price appreciation will offset the losses, I assume they are correct most of the time(otherwise they would be out of business eventually), so the 'savings' from the renter, are actually costs in the form of capital gains he didnt get because he didnt buy the property

That said, at any given time prices can get out of whack and the renting vs buying will depend on valuation and the specifics of the person

People keep comparing RE to nothing. How about comparing it to the bond market, equities, commodities, over say, the last 30 years?

 

[Trader666]

Actually, people keep comparing buying to renting. And since everyone needs a place to live, either you pay down your mortgage or you pay down your landlord's. You can't live in a stock or bond.

Quote from nitro:

People keep comparing RE to nothing. How about comparing it to the bond market, equities, commodities, over say, the last 30 years?

 

[nutmeg]

I like to go out my back door and take a leak, get in tune with nature, so basically I didn't have much choice, I had to buy.