I have an offer for a family member to pay the entire deposit and I’m still not buying a house. I’m in top percentile income too but I’d rather retire early and meagerly rent than be stuck for the next 3 decades.
how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Maintenance costs suck, but even that has a silver lining when you own. It’s yours. When your fridge breaks in a rental you’re not out any money, but they just bring by another jank landlord special. I redid my kitchen with Thermador, not the top of the top brand, but pretty far up there. That cost quite a bit but it’s mine and my kitchen is far better than anything I had renting.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
Historically housing as an investment is one of the least risky gambles one can take. They even have a saying, “safe as houses.” People will always need a place to live. Tbh, buying a house is probably safer than government bonds right now.
People will always need a place to live, yes. We also always need food, and general safety from harm. A home is no good if you lose any of the other two while living there. That can happen if, for example, the government or your neighbours decide that your kind is undesirable, or an arbitrary trade war forces businesses in your area into downsizing/bankruptcy and losing you the jobs that paid for your food, or the same happening to farms in the area. How big these risks are will depend a lot on where you are and who you are.
Renting is usually cheaper than buying when you factor in all the costs of owning, depreciation, etc, importantly: assuming you invest the difference in an index fund and assuming average market conditions. It’s the opportunity cost of losing out on index fund increases, which outperform home + rent payments by several percent on average.
Hard to retire early when you’re sagged down by a 30 year mortgage, versus the flexibility of moving to a lower cost rent situation.
Most most importantly: I say this because I’m well off and privileged. I don’t expect most people to have the insane luxury to have this choice. To be fair, I’m much better off than if I had owned the home I currently rent. But was born into privilege. It’s not just flexibility but real returns. The home + rent went up say 7-8% after depreciation while my investments went up 10-11% in that time (YoY).
i have no idea what youre talking about depreciation for on a home, its not equipment youre writing off for tax purposes. if you mean rent went up 8% then thats even more of a reason to buy. and it sounds like you mean to say appreciation (which is basically free equity if you did own it) instead of additional money lost
sagged down by a 30 year mortgage? you say things that just dont make sense. you can sell the house at any point. or refinance. or take out a HELOC to access some equity if you get a sub 7% rate (or cash-out refi) and toss that into an index fund. file bankruptcy if you truly cant afford it and cant sell it or rent it. you have more options that will enable you an early retirement more than just pissing it away on renting.
you need to do some honest research about it bc everything you say is pretty uninformed sounding. and i dont really know a whole lot myself.
I have an offer for a family member to pay the entire deposit and I’m still not buying a house. I’m in top percentile income too but I’d rather retire early and meagerly rent than be stuck for the next 3 decades.
how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Maintenance costs suck, but even that has a silver lining when you own. It’s yours. When your fridge breaks in a rental you’re not out any money, but they just bring by another jank landlord special. I redid my kitchen with Thermador, not the top of the top brand, but pretty far up there. That cost quite a bit but it’s mine and my kitchen is far better than anything I had renting.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
That too, last year before I finished my mortgage my neighbor was paying well over double my mortgage, property taxes, and maintenance costs combined.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
Historically housing as an investment is one of the least risky gambles one can take. They even have a saying, “safe as houses.” People will always need a place to live. Tbh, buying a house is probably safer than government bonds right now.
People will always need a place to live, yes. We also always need food, and general safety from harm. A home is no good if you lose any of the other two while living there. That can happen if, for example, the government or your neighbours decide that your kind is undesirable, or an arbitrary trade war forces businesses in your area into downsizing/bankruptcy and losing you the jobs that paid for your food, or the same happening to farms in the area. How big these risks are will depend a lot on where you are and who you are.
deleted by creator
Renting is usually cheaper than buying when you factor in all the costs of owning, depreciation, etc, importantly: assuming you invest the difference in an index fund and assuming average market conditions. It’s the opportunity cost of losing out on index fund increases, which outperform home + rent payments by several percent on average.
Hard to retire early when you’re sagged down by a 30 year mortgage, versus the flexibility of moving to a lower cost rent situation.
Most most importantly: I say this because I’m well off and privileged. I don’t expect most people to have the insane luxury to have this choice. To be fair, I’m much better off than if I had owned the home I currently rent. But was born into privilege. It’s not just flexibility but real returns. The home + rent went up say 7-8% after depreciation while my investments went up 10-11% in that time (YoY).
i have no idea what youre talking about depreciation for on a home, its not equipment youre writing off for tax purposes. if you mean rent went up 8% then thats even more of a reason to buy. and it sounds like you mean to say appreciation (which is basically free equity if you did own it) instead of additional money lost
sagged down by a 30 year mortgage? you say things that just dont make sense. you can sell the house at any point. or refinance. or take out a HELOC to access some equity if you get a sub 7% rate (or cash-out refi) and toss that into an index fund. file bankruptcy if you truly cant afford it and cant sell it or rent it. you have more options that will enable you an early retirement more than just pissing it away on renting.
you need to do some honest research about it bc everything you say is pretty uninformed sounding. and i dont really know a whole lot myself.