Reply to What if we just rent for the long haul...

Forum Index » Real Estate

Reply to "What if we just rent for the long haul..."

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

When an overwhelming majority, staggeringly overwhelming majority, of higher income, higher net worth people own, not rent, that tells you something. Not a coincidence. 
[/quote]

It tells me they’re not too concerned about what the optimal financial move might be, because they can easily afford to own and they want to own so who cares?

What does it tell you?[/quote]

Not PP. There is no free lunch. Landlords pass on the cost of PITI plus a profit margin to the renter. People who rent and save vs. bying are typically renting much less space or worse amenities. I don’t think housing is a great investment, but you do have to live somewhere and pay for shelter. [b]Also, a house is bought on leverage so for a 400k down payment the house has to appreciate by 30k a year to beat the market long term. And yes $2M houses have  appreciated a lot more than 30k annually. [/b]I consider PITI the sunk cost of providing for shelter, no different than rent. [/quote]

Comparing a certain type of home, in a historically strong metro area, to the stock market in general is an unfair comparison. A better comparison would be to compare the real estate market in general to the stock market in general.

If you’re going to compare the DC housing market to stocks, compare it to a certain company or a certain sector. If you bought a basket of individual tech stocks (Apple, Microsoft, Amazon) 20 years ago instead of a house in DC you’d be doing far better.[/quote]

No I am not. The average house appreciation in the US for the last 2 decades has been ~5%, for strong metro areas it has been double that. If you only invest $400K (down payment) and purchase an asset of $2M (house), your asset would have appreciated $100k a year annually with a 5% appreciation rate. If you invested the 400k in the market you'd need a 25% annual return to make 100k (stock market average has been 9.9% annually). Plus 1. [b]rents have increased 8.5% annually for the last 4 decades[/b] while your mortgage payment stays fixed and often decreases through refinancing 2. your mortgage is tax deductible while rent isn't. Renting only makes sense if you can't settle down for 5 plus years in an area.[/quote]

The bolded is ridiculously untrue.

https://tradingeconomics.com/united-states/rent-inflation

https://www.in2013dollars.com/Rent-of-primary-residence/price-inflation

I don't have time to do the calcs, but based on the 2nd link chart, looks like the average rent inflation since 1984 is around 4% or so.[/quote]

Yes it's mostly true. Here is a reputable source not a random website you just Googled:

https://fred.stlouisfed.org/series/CUUR0000SEHA

[/quote]

Ha ha incredible.  If you take the Feb 1984 base from that data, it's 102.9.  The Feb 2024 base is 413.65.  Put that into Excel and you get an annualized inflation rate of 3.54%[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics