Harry T

Better to Rent than Buy a Home

I agree with you that renting has its downsides, the worst of which is getting the big boot from the place you call home because some landlord has some other motives or fell back on their mortgage payment.

But being a homeowner has its own downsides as well. It is a simple matter of how much risk you're willing to take.

If as a renter you can't repair your own brakes in front of the drive way, you can find a friend's house to do it, same as if you were a homeowner. I have seen some homeowners who were so shady because of their own ownership halo that they won't do or scratch a mark onto their home without freaking out. This same psychology is seen when someone purchases a brand new car, they bought a new $40,000 vehicle but won't put miles on them, and ask the used car owner to front for the car pool. Their reasoning? Because your car is older it already has a lot of miles on it, but theirs isn't so let's keep adding miles on the used car and let me drive my nice new car on the weekends to show off to everyone.

But one big risk for home ownership, imagine furnishing your home with all the living necessities such as a new metal fridge, washer, dryer. Than being foreclosed on than you will have to liquidate all your furniture at a heavy discount.


On Feb 04 12:42 PM sr9web wrote:

> All these chart and experts who say "rent, don't own" are talking
> out their butts.
>
> Why do I say that?
>
> Because it's NOT an "apples to apples" comparision.
>
> When you own your home, you control the environment and the premises.

>
>
> - You say who comes and goes
> - You keep the hours that you please
> - You can change your transmission in the driveway if you want

>
> - You can BBQ on the back deck in you want
>
> Etc., Etc., Etc....
>
> It's only in theory that the rights on tenancy which are supposed
> to vest to a renter are actually fully realizible.
>
> In actuality, renters get sh*t on all the time by *sshole neighbors,
> idiot landlords, cops, lunatics, etc, etc.
>
> And at the very least, when doing a risk comparision, you need to
> factor in the risk of RENT INCREASE and the risk of LOSS OF UNIT.

>
>
> Simply put, when you rent, your control over your residence is very
> tentative.
>
> It's MUCH MUCH better to own.
>
> I own a 5 bedroom 3.5 bath split level in the suburbs West of Boston
> and my FIXED mortgage is less than $1,500 a month.
>
> I have a full-size family living comfortably, with plenty of elbow
> room and storage space.
>
> This deal can not be duplicated - not even close by renting!

Are Home Prices Still Too High?

Low interest rates fueled the rapid rise in housing prices, and kept them up. For some odd reason people would rather you pay a hefty price on a home to have you work 30 to 40 years of your life away, rather than keep prices low so you can work 20 years own the house and decide if you want to retire (without benefits) or continue to work.

The biggest expense in any low to middle income family is a mortgage. And that keeps them working, but the job market is not large enough for every working American to keep working for 30 to 40 years while the new generation comes into the work force, because many of the older generation postpone retiring and opening up those positions because they still have mortgage obligations.

Gold's Relationship with Real Estate

Homes should never have been used as investment vehicles for the mere fact that a home is similar to a car, it gets old, it gets lived in, and if it has a previous owner the conditions are never 100% transparent therefore a home should always be losing value rather than gaining value.

The philosophy behind owning homes was ingrained into our mindset that if you don't own a home than you won't be as happy as a homeowner, if you were to buy a home to rent and charge a premium to the renter because the renter cannot afford to buy a home above their salary grade than that makes sense as an investment, but when it comes to pure investment homes should be deflating assets, albeit slower than cars.

Gold on the other hand stays the same, today it is gold tomorrow it is still gold. It isn't older gold because its been in your possession for over a year, the gold is still investment grade, it is still jewelry grade, it still contains the same properties as last year.

Home Ownership: The Ideal That Refuses to Die

While this is definitely true, people have been succumbed into believing that by owning a house they will live a richer more fulfilling life.

My own parents were immigrants that came to this country 20+ years ago and have worked hard at their jobs in order to purchase a home and are still making their payments on this home. In fact, the payments may not be finished on the home until past their retirement age, yet they strive to make their payments in order to buy a home.

This ideology has been passed down to me, and while I am a renter now, I do strive to own a home one day, whether it means that I will continue to make the payments for my parents when they can no longer generate income and take over the home or go out and purchase a home of my own one day. Because isn't that what the selling point is? To be a homeowner means you can do to your home what you cannot do to another person's home. You can feel safe and comforting knowing that the landlord will not decide to sell the house one day, and also know that if you're not renting from an apartment you won't be subject to random inspections for "quality control".

I don't think that the fundamentals of home ownership are flawed. But the whole concept of lending money to people who cannot afford a home or cannot afford the home they wish to purchase is flawed. Many families are probably able to purchase a home, but a home cannot be a vehicle of investment, it isn't an ATM that can be used on a whim, and a home doesn't have future value until it is sold. So while there was a sellers market the past decade, it had to have been made clear a very important fact that a product whether it is a home, a car, a laptop, or canned tuna is only worth the price that someone else will pay for it. In those terms buying a home as an investment make absolutely no sense.

But there are those homeowners out there who wanted to buy a home and pay off the mortgage and live there, thing is some people got too euphoric about the kind of home they could buy when the money was flowing and bought up or out of their pay grade.