Renting and investing vs purchasing a single family home

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Owning a home is not a financial investment anymore. Definitely take the 3.3 if you dont want a home. Start slowly investing in other areas, do your research and diversify.

Good for you for knowing this. Home ownership is only valuable if you wish to stay put and have security. Its no longer a way to create wealth. So so so many costs outside of the actual house value. Most break even but we aren't making money.

I support this approach! As a landlord that started slow and steady I love me some dedicated renters. i’m at the point now where every 3 years the cash flow from my rentals builds up enough cash for a very large down payment on another rental.

Most landlords lose money, but sadly they don't know it. Good for you for doing well. The truth is most barely break even.

If that was the case, they would be out of business and there would be fewer homes available for rent because it’s not a lucrative business.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Owning a home is not a financial investment anymore. Definitely take the 3.3 if you dont want a home. Start slowly investing in other areas, do your research and diversify.

Good for you for knowing this. Home ownership is only valuable if you wish to stay put and have security. Its no longer a way to create wealth. So so so many costs outside of the actual house value. Most break even but we aren't making money.

I support this approach! As a landlord that started slow and steady I love me some dedicated renters. i’m at the point now where every 3 years the cash flow from my rentals builds up enough cash for a very large down payment on another rental.

Most landlords lose money, but sadly they don't know it. Good for you for doing well. The truth is most barely break even.

If that was the case, they would be out of business and there would be fewer homes available for rent because it’s not a lucrative business.

Most landlords are moms and pops. They barely break even.

[Anonymous]

Anonymous wrote:I just want someone to explain to me why do will we expect home prices to keep going up.

If people are having less children and from 2030 , boomers will start listing their home en masse significantly increasing supply, how are home prices going to continue going up like they have been in the past?

Do we really think 1 and 2 person households will prefer owning over renting??

Home prices vary from place to place.
We believe that in areas where there is no land left for new homes, prices will continue to rise.
The tax code and property laws favor homeowners. As long as it stays that way, people will prefer owning and prices will go up even if the population growth slows down.

[Anonymous]

Anonymous wrote:Why don’t you want to own a home?

Because we don't like the idea of it unless it is funded by strangers.

Signed,

Kimberly Van Der Beek

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:U want to have some diversification, especially in the future as tax rules change. I’d put a significant amount in a real estate focused investment vehicle like an apartment REIT, and the rest in a standard equity fund, although you’ll never come anywhere close to the return on equity from a down payment on a mortgaged property.

Truth is return on downpayment depends on mortgage rate. At current rates it’s way under 7% of S&P historical return

I was glad I didn’t buy in 2020 even at low interest rate . My market returns afford me now buy a house all cash.

I’m a bit curious. What is your market return from 2020 to now?

16% annual I would only buy a multi unit that returns 18% cash on cash and my financial advisor agrees

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Owning a home is not a financial investment anymore. Definitely take the 3.3 if you dont want a home. Start slowly investing in other areas, do your research and diversify.

Good for you for knowing this. Home ownership is only valuable if you wish to stay put and have security. Its no longer a way to create wealth. So so so many costs outside of the actual house value. Most break even but we aren't making money.

I support this approach! As a landlord that started slow and steady I love me some dedicated renters. i’m at the point now where every 3 years the cash flow from my rentals builds up enough cash for a very large down payment on another rental.

Most landlords lose money, but sadly they don't know it. Good for you for doing well. The truth is most barely break even.

If that was the case, they would be out of business and there would be fewer homes available for rent because it’s not a lucrative business.

Most landlords are moms and pops. They barely break even.

They do break even but only make 4-5% annual cash on cash for single family. That’s behind S&P they would do very much ahead if just invested in index their 150k in 2007

[Anonymous]

Anonymous wrote:

Anonymous wrote:I just want someone to explain to me why do will we expect home prices to keep going up.

If people are having less children and from 2030 , boomers will start listing their home en masse significantly increasing supply, how are home prices going to continue going up like they have been in the past?

Do we really think 1 and 2 person households will prefer owning over renting??

Home prices vary from place to place.
We believe that in areas where there is no land left for new homes, prices will continue to rise.
The tax code and property laws favor homeowners. As long as it stays that way, people will prefer owning and prices will go up even if the population growth slows down.

Let's hope our national debt doesn't lead us down the path of taxing unrealized gains. That equity hmm so tempting for the government esp if boomers choose to stay in their homes because any alternative is more costly

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Owning a home is not a financial investment anymore. Definitely take the 3.3 if you dont want a home. Start slowly investing in other areas, do your research and diversify.

Good for you for knowing this. Home ownership is only valuable if you wish to stay put and have security. Its no longer a way to create wealth. So so so many costs outside of the actual house value. Most break even but we aren't making money.

I support this approach! As a landlord that started slow and steady I love me some dedicated renters. i’m at the point now where every 3 years the cash flow from my rentals builds up enough cash for a very large down payment on another rental.

Most landlords lose money, but sadly they don't know it. Good for you for doing well. The truth is most barely break even.

I don’t know why not. Its very easy. It’s been like a snowball effect and now it’s really gaining momentum, especially since i’ve been able to do rent increases each year. once I stop buying rentals, I’m going to use all of my profits as income. aright now it’s the equivalent of a 3 income family. It’s not anything special, not even sure why good for me. I just REALLY enjoy when others pay my bills 😉

[Anonymous]

We owned two homes and now have decided to rent. I was getting claustrophobic and wanted to move. We also wanted to be able to get up and move to a new location if we wanted. We are committed to five years here for the last one to finish high school.

We pay about 5% of our income to rent. When we were just starting out we used to pay 50% of our income to mortgage, taxes, everything that comes with buying a house. In NYC there are residents who have only ever rented, low income and high income families.

[Anonymous]

Anonymous wrote:
I just want someone to explain to me why do will we expect home prices to keep going up.

If people are having less children and from 2030 , boomers will start listing their home en masse significantly increasing supply, how are home prices going to continue going up like they have been in the past?

Do we really think 1 and 2 person households will prefer owning over renting??

Home prices vary from place to place.
We believe that in areas where there is no land left for new homes, prices will continue to rise.
The tax code and property laws favor homeowners. As long as it stays that way, people will prefer owning and prices will go up even if the population growth slows down.

Does the ability to work from home affect that analysis?

[Anonymous]

I would never rent again. When you rent you still have all the issues of home ownership except like a child you must ask for permission to fix things, then have shady people come and fix said things and invade your space, and a lot goes undone because landlords are cheap. Owning a home has been really wonderful and I love feeling in control and in charge.

[Anonymous]

Anonymous wrote:

Anonymous wrote:U want to have some diversification, especially in the future as tax rules change. I’d put a significant amount in a real estate focused investment vehicle like an apartment REIT, and the rest in a standard equity fund, although you’ll never come anywhere close to the return on equity from a down payment on a mortgaged property.

Truth is return on downpayment depends on mortgage rate. At current rates it’s way under 7% of S&P historical return

I was glad I didn’t buy in 2020 even at low interest rate . My market returns afford me now buy a house all cash.

I bought in 2020. 10% down, 2.7% mortgage rates.

My PITI is half what it would cost to rent my house today. I'm laughing all the way to the bank. And the rest of my investments have done extremely well, FYI. Putting 10% down in 2020 was a very wise thing to do.

As I pointed out on the other thread, people trying to claim renting is better are using apples vs oranges to prove their point. Sure, maybe it's cheaper to rent a cheap 1-bedroom versus owning a SFH, but they're also not the same.

[Anonymous]

Anonymous wrote:We owned two homes and now have decided to rent. I was getting claustrophobic and wanted to move. We also wanted to be able to get up and move to a new location if we wanted. We are committed to five years here for the last one to finish high school.

We pay about 5% of our income to rent. When we were just starting out we used to pay 50% of our income to mortgage, taxes, everything that comes with buying a house. In NYC there are residents who have only ever rented, low income and high income families.

NYC had rent control and caps on how much they can raise rent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:U want to have some diversification, especially in the future as tax rules change. I’d put a significant amount in a real estate focused investment vehicle like an apartment REIT, and the rest in a standard equity fund, although you’ll never come anywhere close to the return on equity from a down payment on a mortgaged property.

Truth is return on downpayment depends on mortgage rate. At current rates it’s way under 7% of S&P historical return

I was glad I didn’t buy in 2020 even at low interest rate . My market returns afford me now buy a house all cash.

I bought in 2020. 10% down, 2.7% mortgage rates.

My PITI is half what it would cost to rent my house today. I'm laughing all the way to the bank. And the rest of my investments have done extremely well, FYI. Putting 10% down in 2020 was a very wise thing to do.

As I pointed out on the other thread, people trying to claim renting is better are using apples vs oranges to prove their point. Sure, maybe it's cheaper to rent a cheap 1-bedroom versus owning a SFH, but they're also not the same.

Right , 2.7% mortgage. If you bought it at present rates you wouldn’t be laughing out loud
In fact, it’s better to buy all cash now

[Anonymous]

Anonymous wrote:

Anonymous wrote:Owning a home is not a financial investment anymore. Definitely take the 3.3 if you dont want a home. Start slowly investing in other areas, do your research and diversify.

Good for you for knowing this. Home ownership is only valuable if you wish to stay put and have security. Its no longer a way to create wealth. So so so many costs outside of the actual house value. Most break even but we aren't making money.

I support this approach! As a landlord that started slow and steady I love me some dedicated renters. i’m at the point now where every 3 years the cash flow from my rentals builds up enough cash for a very large down payment on another rental.

+1 it’s so funny seeing these posts from clueless people who think renting is better in the long run.