What do you think of people who don't own a house/condo/townhouse etc?

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10/02/2016 13:56

Subject: What do you think of people who don't own a house/condo/townhouse etc?

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Anonymous wrote:OP here - Not entirely clear why this turned into a discussion of my personal life. Rest assured I have one.

And in terms of why I ask or care, it's bc I've gotten snarky comments from people lately about my choice to rent a 1 bedroom and not buy at least a townhome; a few comments have been from random people - say someone I just met at a party, so it was like who cares. But a few have been from friends. Moved here from NYC 4 yrs ago and people in NYC tend not to ask if you rent/own/want to own. So I don't know if this is another area of DC snark where people feel superior in their financial knowledge and their net worth bc they own and assume you don't own bc you can't afford it.

It's more acceptable to be a high earner and rent in NYC. Owning is expensive in NY and not always a good move financially. Here's it's different. Often times rent is the same if not more than a mortgage on a comparable property. If you don't own here people assume you're either transient or can't save up for a down payment.

This. I know high earners in NYC who are renting and may rent forever -- various reasons; it takes a LONG time to save up the down payment for what they want, or even if they have the down payment ready to go, sometimes the mortgage + maintenance + taxes are structured such that it is cheaper to rent and invest the difference. That's less likely to be true here -- and certainly rarely true if you buy a townhome in Md. or Va.

And as I'm sure you've realized New Yorkers are more live and let live; even if you are making the worst financial move in the world, most of your friends and acquaintances in NYC won't lecture you bc they will assume that you ARE a rational, smart person who must have your reasons. Here -- EVERYONE -- even so called friends -- LOVE to assume that THEY at the smartest and thus you are a moron bc you aren't living how they would be living in your situation. And yes they do feel superiority if they feel you have less than them, financially and thus HAVE TO rent.

Whatever. If you're comfortable with how the numbers are working out for you, keep renting. If/when that ever changes, buy. Just ignore all the "advice" people here try to give you bc you can't assume it's for your benefit.

I don't think it's this. I think it's that many New Yorkers spend all of their money, including high earners. I have quite a few friends who rent and take extravagant vacations, attend pricey charity events, luxury goods etc but rent, don't save any money and still have student loans. They simply don't seem to care.

I'm way more cautious and ambitiously saving towards retirement, paying my mortgage down and paid for graduate school in cash.

True. I do know many high earners in NYC who live large but haven't bought, haven't even really planned when/how they'll buy, and some of them really only started saving for retirement in their mid 30s and even that isn't maxing out. For my friends who are like this though, they have supreme confidence that they absolutely WILL continue to earn 500k or whatever forever, so they don't "need to" plan and can just continue having fun.

In any event, those types of people still judge less than people here. Hard to throw stones that someone hasn't bought, when you yourself are headed off to vacation no. 3 of the yr and aren't looking to buy either.

I disagree. Instead of judging for not saving money they judge you for not living large. My friends seem to not understand why I'm not interested in seeing Hamilton, joining them on pricey vacations, going out to eat all the time, etc. It is because not only did I spend a decade living like that, but I'm now focused on building net worth.

It's also easier to live large in NY and not have anything to show for it. You can rent a pricey rental that's similar to what you'd buy. Here's it's hard to rent a home that's similar to what you'd buy. It's harder to go into an upscale neighborhood here in DC and rent a property. I actually know someone in NY who rents three properties - beach, county and city. Couldn't afford to buy a single one of them if he tried.

I think it will be interesting to see what happens to these people as they have children and get closer to retirement. Can they really count on their high incomes forever? How are they going to keep paying for the rental in NY when the rent goes up annually? I imagine that some of their peers will begin to purchase apartments and vacation homes - especially the true high earners. This makes the 500k hhi spend everything we make look even sillier.

It's not like high earners in NYC NEVER buy. I did biglaw there for 7-8 yrs and then had to get out of the city. What I saw across the board was that most associates did not buy -- even those who were savers and had the down payment on a 1 bedroom. Some didn't buy bc they knew they didn't want to stay in NYC, so they preferred to take their down payment with them to Seattle or Minneapolis or wherever they wanted to move back to and buy a property almost in cash. Others didn't buy bc they wanted to wait until they made partner -- thus they could buy a much bigger/better place. But I don't know a single law firm partner in NYC who doesn't own; part of that though is the uncertainty in law these days. Just bc you make partner doesn't mean you are kept forever, so I have known people who made partner and bought and quickly paid down/off a property in 5-7 yrs so that if they get pushed out, they at least don't have to worry as much about living costs. My friends in finance are different -- more of them haven't bought and intend to continue living large bc they know they can keep making 500k/yr forever. I mean if they get laid off at Goldman, they go to a competitor or a smaller firm that's happy to have them. If somehow that doesn't work out, they have enough investment savvy that they can generate money that way; while they seem like they spend every last dime, I do have finance friends who have stashed away a good amount of capital off of which they could generate income if they had to. That's something most lawyers can't do.