Post: #1

Good Morning,

I was wondering how many renters to owners there are on the forum?

I ask because I recently read Aaron Clarey's book "Enjoy the Decline"...and he had some interesting thoughts about home ownership.

I for one, am currently a renter and unless I win the lotto, have little interest in owning another house...way too much of a hassle in terms of time, energy and money. Plus I'm not a handyman type...well I could be IF I chose to focus and apply myself; however, I'd rather be enjoying outdoor sports and other activities. When I'm home, I prefer my shelter to be as user friendly as possible...safe, comfortable and secure.

Thanks!

Post: #2

I prefer renting. My dad owns his home and he pays taxes and upkeep on it every year that look like rent on a nice one bedroom downtown. It isn't that big of a house and he does a lot of the work himself.

For a single male who likes to travel renting is probably the best bet. If you can work remotely then you can live in a new American city every year or even a foreign city if your work is that flexible.

Also, if you mess up and rent a place in an area you don't like then you are usually only screwed for a year tops. Make the same mistake with a house and your looking at several decades. Also, who knows what the area you're in will look like in 5 years. It could get better but in my experience people buy houses areas where it's already good and usually end up seeing it decline. I mean logically why would you buy a house in an area that's not so good. Your going to pick the best but usually your at the top of the housing curve and will hate your life when the area starts going down hill. Picking neighborhoods is like picking stocks. It's a real crap shoot as to what the place will look like in a few years.

Renting on the other hand allows you to always rent in areas that you know are good and when they turn crappy it makes it so much easier to walk.

Also, who knows what the government is going to do with the tax system. It is possible they could take away the tax benefits for home ownership in the future and if you counted on that deduction you could be looking at bankruptcy.

If rent spikes you can always get a smaller place or a smaller place with a roommate when it comes time to sign a new lease.

FYI most of this info is for single males. None of this applies to families for obvious reasons. Downsizing with a wife and children usually means trouble from what I have seen but I have neither so I'm no expert on that.

Post: #3

You can always buy a multi-family, 3 or 4 unit, live in one, rent out the rest.

When it's time to bounce, you can sell to an investor, or have a management company handle it.

Now finding one that you want to live in, that cash flows...that's the million dollar question.

WIA

Post: #4

Thanks for your posts...very helpful.

Post: #5

Do the math. During the last bubble I had a friend who bought a house and rented it out for half his mortgage payment. When the numbers are reversed, then buy.

Post: #6

What points does Aaron Clarey make in the book "Enjoy the Decline"?

Post: #7

Renting is best for a young man/woman or someone who likes to change it up every so often with little hassle. Buying a house is when you're ready to settle in for the long haul.
Think of leasing and financing/buying a car. The leased car is returned in a certain period of time, and you can change it when the time comes. It's got insurance so you don't have to worry during your lease. Buying a (used) car is different- as soon as you pay, it's yours. You have full security with it, but it loses value and can break down and prove costly.

Hope it helps a bit.

Post: #8

Clarey, Aaron (2013-01-07). Enjoy the Decline (p. 62). PaRic Publishing. Kindle Edition

The primary principle that should govern your decision about housing is:

“Where is the cheapest, smallest, optimally located place I can sleep that has just enough room to store me and my stuff?”