Question for renters..Aren't you tired of paying someone's mortgage?

[Anonymous]

Anonymous wrote:Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?

Hah, when we all retire, we can move to cheaper digs, like FL or AZ, like generations ago.

More and more people are going into retirement without paying off the mortgage, and property taxes which go up and up.

[Anonymous]

OP. another multi-unit landlord here. Maybe it's the nature of the properties I own -- condos along the Orange Line in Arlington -- but I think renting is a good idea for many people. We saw the havoc wreaked by government policies to encourage home ownership in the housing market Not everyone is meant to be a home owner. The alternative is to make someone like you necessary. Don't judge, simply play your role as a landlord

[Anonymous]

Anonymous wrote:Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?

Well, my grandma's house was paid off, but eventually it got to a point where she couldn't take care of it. So she sold and rented something smaller! Not in this area though. I know that I for one am not planning to retire here, and there are plenty of places out there where rents are cheaper.

We bought last year, but in our mid-30s. It took a while to save for the down-payment, and I don't think anyone should buy before they're financially on solid footing. The foreclosure crisis was a good reminder of that. Also, this area can be so transient. Some friends of ours continued to rent for years after they could have bought, because they always had an eye on moving back to the west coast when the right job opportunity came up. Renting gives you the freedom to pack up and go.

[Anonymous]

[quote=Anonymous]Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?[/quote]

You'll have a paid off house, the renters will have invested the difference between mortgage and rent in vehicles other than equity.

[Anonymous]

But what happens over time? If you rent somewhere for $2000 and you could buy for $2500 on a fixed rate mortgage, and rents go up by 4% a year! you are no longer investing the "excess" after 6-7 years because there is no more "excess". Your rent is now more than the fixed rate mortgage. Now it's the homeowner who is investing all the extra money they have, that increases every year, as rents rise and a fixed rate mortgage stays the same. In 20 years you're paying $4000+ for that same property while the homeowner is paying $3000 or less even with property tax increases, and is looking forward to having it paid off in ten years, at which point you'd pay probably $6000 while the homeowners pays just property taxes and insurance and has a valuable asset to boot.

Perma-renters always seem to look at a snapshot in time, or at most a 2-3 year horizon. They compare a $2000 rent NOW to a $2500 mortgage NOW and think it's a good idea to rent. In five years that same property will require a mortgage of $3000 while their rent is $2400 so renting will be a good idea THEN. In 15 years the same property will require a mortgage of $4200 while they can rent for $3700, so renting will be a good idea then as well.

Then after 20 years of renting they'll accuse people who have tons of equity in their houses of being "lucky" to have bought before a price run up or two. Uhhhh no.

I'm more than happy to live in a house I love, even if it costs a little more now, knowing that I am cheapening my living costs over time with inflation, while rent increases in urban areas generall run a point above inflation, so renting gets more expensive all the time.

[Anonymous]

I own and I'm over it. After the housing fiasco, I never want to own again. I'd rather put my $$ in other investments that have greater return. Not everyone is sitting pretty in DC.

[Anonymous]

PP again. And I actually look forward to the time in the not too distant future where the renters in my two rental properties no only pay off those two mortgages every month, but also the mortgage in my primary residence as well.

But then, I'm a sucker.

[Anonymous]

Anonymous wrote:Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?

Rent is high for my family right now because we need the extra room for kids. By the time we retire, we can downsize. I can't imagine I'll want to maintain and keep up a big house and yard when I'm retired. I'd rather have an apartment (like I have now) and be free to travel and visit my kids.

Plus, renting allows us to throw money at retirement, rather than saving for a down payment. We pay under $3K for a 2bd apartment in boundary for a good school in DC. Our commutes are less than 30min, we can get away with owning only 1 car and only using aftercare through school. We still have student loan debt we're paying off as well. To own in our neighborhood (in our condo complex), we'd have to have at least $50K for a down payment, (that's with impeccable credit, with our credit, we'd need more) and jobs that pay much more than what we have now. Or we'd have to move to a marginal neighborhood or far out suburb, increasing our commute, changing our kid's school and increasing the time he's in daycare, buying another car and generally lowering our quality of life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?

Rent is high for my family right now because we need the extra room for kids. By the time we retire, we can downsize. I can't imagine I'll want to maintain and keep up a big house and yard when I'm retired. I'd rather have an apartment (like I have now) and be free to travel and visit my kids.

Plus, renting allows us to throw money at retirement, rather than saving for a down payment. We pay under $3K for a 2bd apartment in boundary for a good school in DC. Our commutes are less than 30min, we can get away with owning only 1 car and only using aftercare through school. We still have student loan debt we're paying off as well. To own in our neighborhood (in our condo complex), we'd have to have at least $50K for a down payment, (that's with impeccable credit, with our credit, we'd need more) and jobs that pay much more than what we have now. Or we'd have to move to a marginal neighborhood or far out suburb, increasing our commute, changing our kid's school and increasing the time he's in daycare, buying another car and generally lowering our quality of life.

I'll add that buying a house/condo that would work for our family is so far out of reach for us that it's not even on the radar. It's just the way it is. We're paying student loans rather than saving for a down payment and it will be that way for a long, long time.

[Anonymous]

[quote=Anonymous][quote=Anonymous]Do you forever renters worry at all about the future? I can't imagine going into retirement without a paid roof over my head. You think rents are high now - what do you think they will be in a few decades?[/quote]

You'll have a paid off house, the renters will have invested the difference between mortgage and rent in vehicles other than equity. [/quote]

presuming they had enough $ to invest after paying rent. we don't have any extra to invest...

[Anonymous]

While I do look forward to one day having my own home and having our money go towards that every month, we're not there yet. We're still paying off student loans and still collecting our down payment. We also are open to moving abroad, or to Boston, in a couple years - that's about when our down payment should be ready, so we'll either use it to buy a home here or invest it when the time comes.

In the meantime, I can take my $1700/month to rent a tiny 2 bedroom in the far out burbs and face 10-15% annual rent hikes from a major property management company OR I can cover my landlord's monthly mortgage + condo fees and have a stable-ish rent for years in a larger unit than we would otherwise be able to afford. Pretty easy decision for us. Renting directly from owners has been my best rental experience, by far!

[Anonymous]

I think the OP asks a stupid question and frankly insensitive question.

While there are those that do rent because they use the savings in other assets to generate a return and/or are highly-mobile professionals - the vast majority of those that rent would love to buy but cannot.

As col rises and wages are squeezed, getting that downpayment without outside assistance (parents, etc) is very tough for the DC market.

Downpayment issues, job uncertainty, wages under constant pressure - all leads to tons of people for whom home ownership is a pipedream.

[Anonymous]

Anonymous wrote:But what happens over time? If you rent somewhere for $2000 and you could buy for $2500 on a fixed rate mortgage, and rents go up by 4% a year! you are no longer investing the "excess" after 6-7 years because there is no more "excess". Your rent is now more than the fixed rate mortgage. Now it's the homeowner who is investing all the extra money they have, that increases every year, as rents rise and a fixed rate mortgage stays the same. In 20 years you're paying $4000+ for that same property while the homeowner is paying $3000 or less even with property tax increases, and is looking forward to having it paid off in ten years, at which point you'd pay probably $6000 while the homeowners pays just property taxes and insurance and has a valuable asset to boot.

Perma-renters always seem to look at a snapshot in time, or at most a 2-3 year horizon. They compare a $2000 rent NOW to a $2500 mortgage NOW and think it's a good idea to rent. In five years that same property will require a mortgage of $3000 while their rent is $2400 so renting will be a good idea THEN. In 15 years the same property will require a mortgage of $4200 while they can rent for $3700, so renting will be a good idea then as well.

Then after 20 years of renting they'll accuse people who have tons of equity in their houses of being "lucky" to have bought before a price run up or two. Uhhhh no.

I'm more than happy to live in a house I love, even if it costs a little more now, knowing that I am cheapening my living costs over time with inflation, while rent increases in urban areas generall run a point above inflation, so renting gets more expensive all the time.

But we aren't planning to stay in the same place for 20 years. Jesus, I'm having a panic attack just imagining being stuck in the same place for the rest of my adult life, till I retire - then what, still stuck there? No thanks.

[Anonymous]

Anonymous wrote:Some friends who own don't understand why I rent but I pay about $5500 per month for a really truly gorgeous place that would cost me at least $8k per month to purchase. I do it because I love renting and see no need to live in something sub-par.

I used to own a house but if I have my way, and I believe I will, I'll never buy again. I plan to rent this place for another year and then move to Rio for about 3 months before I head to Los Angeles. After that who knows. I have no desire to be tied to one place, or think about maintenance. The day before Mother's Day my oven went out in the middle of me making a meal. I called my landlord's property manager and in less than 2 hours the maintenance guy was here fixing the problem.

Obviously some people really like owning. Fine. Keep doing it. I pay a premium for my peace of mind. I invest my money in things other than real estate.

That is ridiculous to me. I don't care how gorgeous the place is. $5500/mo is crazy, especially when I have nothing to show for it, other than show off someone else's house.

[Anonymous]

Also, when you say buy, what exactly do you mean? My husband and I live in a great apartment in Old Town now - no chance in hell we could afford to live here if we wanted to buy.

Let's leave aside the other reasons we wouldn't buy at the moment and only consider that: at least as far as we can see, we'd have to move either to a part of town where we don't want to live, or else to an apartment we wouldn't want to live in, if we were to buy.

What would you recommend we do?