Post: #76

(01-16-2016 06:23 PM)renotime Wrote:  I really don't get the allure of owning your own home.

You gotta make a down payment, pay property taxes, closing costs, insurance, maintenance, upgrades, and of course pay your mortgage for 15 to 30 years at 5 percent interest.

I'm sure there are some other things I missed.

All of that stuff is passed to you if you rent. Just because you have one rent payment doesn't mean the owner eats the other costs.

You're paying for all of that plus a built in profit.

I get renting if you're not planning on staying in the area for more than a few years (like when I lived in Vegas) or you can't afford to buy in an area you REALLY want to live (like when I lived in Manhattan Beach and surfed every day). Beyond that, ownership is best.

Post: #77

Sweat equity. I moved into an old farmhouse that was unoccupied for three years. I spent every night and weekend for months with my dad fixing it up, and there is still a lot more to do. It's not the prettiest thing, but I have no rent and no mortgage, which makes flyover wages go a lot farther.

Post: #78

For all ya'll that own homes, what percentage of your net worth did you have to put down on the down payment?

Post: #79

(01-16-2016 11:21 PM)renotime Wrote:  For all ya'll that own homes, what percentage of your net worth did you have to put down on the down payment?

they wanted 20% of the appraisal value of the home for me to not have to also pay for private mortgage insurance. They were willing to give me the loan with zero down though because of my credit score and no other debts.

In terms of how much of my own net worth I put down it would have been 72%. I owned a car and was saving cash in the bank specifically for a downpayment.

Post: #80

delete

Post: #81

I think rents will go down as the economy picks up and more people see it's a better deal to buy.

You need confidence to buy. The problem isn't so much banks not wanting to lend, it's people not wanting to borrow. When there is a lack of confidence in the economy, the demand to rent increases. If you want to blame anyone for increased rental prices, blame the confidence of the renters.

My thoughts on Renting Vs Buying.

Buying

Pros

• Possibility of building up enough equity that you live "rent" free or even make a profit when you sell.
• You live in a nicer place then a comparable rental
• You might be paying less then a comparable rental
• The psychological drive for identity and permanence is satisfied
  

Cons

• Possibility of losing money, especially if forced to sell when the market is down.
• You have a responsibility for safeguarding your investment.
• Unexpected maintenance costs. When you need a new $20,000 roof or a $3,000 furnace, etc. you usually have to pay in cash. Then there are all the little things.
• Even if your mortgage is paid off, taxes will usually increase every couple years, as will insurance.
• Bad neighbors? Loud dogs? Rats in the neighborhood? You're fucked.
• Transaction costs when buying/selling really eat into profits.
  

Renting

Pros

• Costs less than owning. Both in monthly and downpayment
• No time and stress used in preserving an investment
• Freedom of mobility for whatever reason you might need.
  

Cons

• Lack of identity and permanence.
• No chance to build equity, protect against inflation, or possibly ride a bullish wave.
• Could get priced out of your rental if it's in an up and coming neighborhood, a population surge, or a bullish rental market.
  

Real Estate is a hard asset. They aren't making any more of it, so in general it will usually appreciate well with inflation. Even those who bought at the top of the bubble can probably sell there home for what they paid at this point. In some places even more.

My advice though would be to wait for the current correction in asset prices to finish. Usually all assets go up and down together. So far Commodities, especially Oil has been leading the way.

If the market only corrects to around S&P 1550, then that would be a good place to buy. If it crashes through that I would wait for a break of the 2009 lows to step back in on any assets.

China is so fucked, I'm sure there will be a Great Depression hitting that country. They have already over-developed their real estate market. There should be some amazing bargains in China in the coming years in both real estate and equities.

Post: #82

(01-16-2016 07:11 PM)Laner Wrote:  

(01-16-2016 04:31 PM)Ingocnito Wrote:  

(01-12-2016 08:43 AM)el mechanico Wrote:  I could swear the majority here has been pro rent don't buy since I came here. My mortgage is half of what my rent here would be now.

I think the G started this hype along with not having a car.

True. I think many people wind up planning "I'll just to rent now which keeps me mobile, and frees me up from being tied down to a mortgage in a house I might not be able to move in an unstable market."

So often it seems, if something halts that move you planned, the mobility per se.. you look back over 5+years of renting and realize it would have been better in a partial fixer-upper than in the landlord's coffers.

I did that with a house I rented for dirt cheap throughout my 20s and early 30s. Despite it being so cheap, I basically bought that piece of shit house for my landlord.. which I regret.

If guys think that renting is better than owning just because they are not tied to an non liquid asset they are just lying to themselves as they put cash into another mans pocket.

My mortgage is cheaper than my rent would be. If I had to rent my condo I would be paying $3000 a month. If I leave for a while I can put it on a short term rental agency and they can put $3400 to me after their cut. Rental vacancy in my neighborhood is under 1% and has been for years. After my mortgage and fees this could put almost $$1700-$2100 a month in my pocket cashflow.

But what if your property value starts decreasing instead of increasing? You are being compensated for the market risk that I am not taking as a renter.

(01-16-2016 10:40 PM)Captainstabbin Wrote:  

(01-16-2016 06:23 PM)renotime Wrote:  I really don't get the allure of owning your own home.

You gotta make a down payment, pay property taxes, closing costs, insurance, maintenance, upgrades, and of course pay your mortgage for 15 to 30 years at 5 percent interest.

I'm sure there are some other things I missed.

All of that stuff is passed to you if you rent. Just because you have one rent payment doesn't mean the owner eats the other costs.

You're paying for all of that plus a built in profit.

I get renting if you're not planning on staying in the area for more than a few years (like when I lived in Vegas) or you can't afford to buy in an area you REALLY want to live (like when I lived in Manhattan Beach and surfed every day). Beyond that, ownership is best.

Not necessarily. They can only pass on the cost insofar as the rental market can bear them. If there is insufficient demand, owners eat the cost.

Post: #83

(01-18-2016 12:14 AM)Peregrine Wrote:  

(01-16-2016 07:11 PM)Captainstabbin Wrote:  All of that stuff is passed to you if you rent. Just because you have one rent payment doesn't mean the owner eats the other costs.

You're paying for all of that plus a built in profit.

I get renting if you're not planning on staying in the area for more than a few years (like when I lived in Vegas) or you can't afford to buy in an area you REALLY want to live (like when I lived in Manhattan Beach and surfed every day). Beyond that, ownership is best.

Not necessarily. They can only pass on the cost insofar as the rental market can bear them. If there is insufficient demand, owners eat the cost.

Absolutely. Renting is much cheaper than owning here in Beijing, unless the sales market for housing (ownership) increases at record rates. As it currently stands, if you don't factor in future potential value, you lose money owning.

If the market crashes, a lot of people are going to be in bad shape.

And it isn't like the landlords here are giving renters a break because they plan to make money on the eventual sale of the property. Those who are in the position to afford to buy have a lot more income than those who have no choice but to rent. Any Chinese person who can buy, will. So there's a big disparity between the budgets of the class than buys homes and the people who just rent them.

Even though there is a huge number of people who cannot afford to buy, those who can outstrip supply, so that's why we've had record growth in housing purchase cost while rent hasn't gone crazy in the same way.

I will never buy in Beijing, unless there's a crash first. Renting sucks, but it sets me free.

Post: #84

Best of both worlds- buy a Winnebago....

Post: #85

(01-18-2016 05:07 AM)roberto Wrote:  Best of both worlds- buy a Winnebago....

/thread-33977.html

Post: #86

(01-17-2016 08:26 PM)Dr. Howard Wrote:  

(01-16-2016 11:21 PM)renotime Wrote:  For all ya'll that own homes, what percentage of your net worth did you have to put down on the down payment?

In terms of how much of my own net worth I put down it would have been 72%.

Post: #87

(01-18-2016 05:03 AM)Suits Wrote:  

(01-18-2016 12:14 AM)Peregrine Wrote:  

(01-16-2016 07:11 PM)Captainstabbin Wrote:  All of that stuff is passed to you if you rent. Just because you have one rent payment doesn't mean the owner eats the other costs.

You're paying for all of that plus a built in profit.

I get renting if you're not planning on staying in the area for more than a few years (like when I lived in Vegas) or you can't afford to buy in an area you REALLY want to live (like when I lived in Manhattan Beach and surfed every day). Beyond that, ownership is best.

Not necessarily. They can only pass on the cost insofar as the rental market can bear them. If there is insufficient demand, owners eat the cost.

Absolutely. Renting is much cheaper than owning here in Beijing, unless the sales market for housing (ownership) increases at record rates. As it currently stands, if you don't factor in future potential value, you lose money owning.

If the market crashes, a lot of people are going to be in bad shape.

And it isn't like the landlords here are giving renters a break because they plan to make money on the eventual sale of the property. Those who are in the position to afford to buy have a lot more income than those who have no choice but to rent. Any Chinese person who can buy, will. So there's a big disparity between the budgets of the class than buys homes and the people who just rent them.

Even though there is a huge number of people who cannot afford to buy, those who can outstrip supply, so that's why we've had record growth in housing purchase cost while rent hasn't gone crazy in the same way.

I will never buy in Beijing, unless there's a crash first. Renting sucks, but it sets me free.

I learned a bit about GZ real estate when I was there recently.

One thing to keep in mind is the size and scale of these cities. When people talk about buying in GZ, they could be a 45 min drive in light traffic from the core of the city. But out there, in the endless towers of high rises, they own a 100sq/m apartment. This is how most people in China will buy now. The ever expanding vertical suburbs.

The woman who was explaining real estate to me has 10 apartments in the downtown core of GZ, including 6 in one building where the owners of many of the units set up a 'furnished apartment' agency in the lobby. Her down payment was very low and the buying price was high between $600,000 and $1million each, but she can cover her costs and put a decent amount of money in her pocket each month. Apparently mortgages in China could be had for very little down payment, but it makes the monthly overhead higher. All of the apartments are worth over a million each now and a couple are approaching $2 million so by selling one she could either pay off one or two mortgages, bank it and ball, or buy more elsewhere.

This is real estate speculation, but in a city with 20 million people, and more arriving all the time, housing in desirable areas is very hard to come by, and as long as people need a place to live, people will buy and rent. And if there are renters, there will be speculators.

Cities that get hammered in corrections have usually overbuilt suburban housing in underwhelming locations with lack of life and character and services. Cities that densify, do not experience the same massive corrections.

Post: #88

(01-15-2016 02:49 AM)The Black Knight Wrote:  I will concur with this as well for the most part.

If you want downtown logistics in much of flyover country now (not all but much of it), you are looking at $1200-1400 and up for something decent. However, the wages in many of these areas really aren't moving up with the cost of living. With rents that high, I would argue you are better off staying in more traditional expensive areas in many cases for the higher income and greater career options.

There is one factor which hasn't been raised in this thread--roads or a lack thereof.

I lived in another town from 1998 to 2004. Rent in the middle of town actually cheaper than the suburbs. The suburbs had "good schools."

But I also think it had something to do with the reality that the town is actually a decent city to live in for traffic. People didn't mind driving to downtown from suburbs.

I made a vow years ago that I would never live more than a half hour away one-way from my workplace. I'm trying to stay on that. You already spend enough time with the drudgery of your job. Why add to that drudgery with a life-sucking one-way commute of an hour or more?

My current town gotten expensive because the highways and traffic are terrible here.

Post: #89

(01-15-2016 08:13 PM)WestIndianArchie Wrote:  In Houston, it was the oil boom. Arguably the same with Dallas.

But in Austin, it's literally Tech people moving from the Bay Area with a Cali housing mindset. 250K for a 4 bedroom was a no brainer in the mid 90's. Where locals were buying @ 170-190.

Now....

WIA

It's having an impact on other things here. Restaurants are becoming more and more overpriced.

Post: #90

(01-18-2016 12:26 PM)renotime Wrote:  

(01-17-2016 08:26 PM)Dr. Howard Wrote:  

(01-16-2016 11:21 PM)renotime Wrote:  For all ya'll that own homes, what percentage of your net worth did you have to put down on the down payment?

In terms of how much of my own net worth I put down it would have been 72%.

keep in mind, 72% is high when you don't have a shit ton of net worth to begin with. I had cash in the bank, a paid off car and 'emergency savings'. If I had $10 in the bank and bought a $9 plate of bbq I'd spend 90% of my net worth on pulled pork.

Post: #91

(01-19-2016 12:30 PM)puckerman Wrote:  

(01-15-2016 02:49 AM)The Black Knight Wrote:  I will concur with this as well for the most part.

If you want downtown logistics in much of flyover country now (not all but much of it), you are looking at $1200-1400 and up for something decent. However, the wages in many of these areas really aren't moving up with the cost of living. With rents that high, I would argue you are better off staying in more traditional expensive areas in many cases for the higher income and greater career options.

There is one factor which hasn't been raised in this thread--roads or a lack thereof.

I lived in Columbus, Ohio, from 1998 to 2004. Rent in the middle of Columbus was actually cheaper than the suburbs. The suburbs had "good schools."

But I also think it had something to do with the reality that Columbus is actually a decent city to live in for traffic. People didn't mind driving to downtown from suburbs like Dublin, Hilliard, or Reynoldsburg.

I made a vow years ago that I would never live more than a half hour away one-way from my workplace. I'm trying to stay on that. You already spend enough time with the drudgery of your job. Why add to that drudgery with a life-sucking one-way commute of an hour or more?

Austin has gotten expensive because the highways and traffic are terrible here.

I'm from Ohio and I agree. I used to travel back to the Buckeye state from PA on work and I would show people the roads. I would point out how they were build on a grid pattern and had two or more lanes. I would then ask why can't it be that way around Philly?
But Ohio is fortunate in there are a lot of medium sized towns between the big ones. Its not like PA where Philly and Pitt dominate the state.