Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

We are seriously evaluating this. We are good savers and investors and, looking right now at our 10-year financial growth, it's pretty obvious real estate pales in comparison with smart stock investments. So much that we might well sell our place soon given its a sellers market, invest the proceeds with care and go find a beautiful place to rent.

Unfortunately the issue with this is that you don’t want to invest when the market is high. If the market drops you will have lost money and then you still have to pay monthly rent so you have somewhere to live.

The housing market is a scam but most people buy in because it’s too costly not to do so

One thing to keep in mind is your home purchase is usually leveraged, so even though my house has not quite doubled in value my equity has more than tripled in value. Of course in theory you can invest borrowed money in the stock market but it's harder/riskier/more expensive.

Or buy a cheap house. I got lucky on my starter home I closed Feb 2000. So when the internet bubble popped in March 2000 hardly owned stocks. I Agressively pre-paid mortgage and got it done by 2008 then started investing in stocks last ten years.

If I had bought Spring 2006 would have been screwed

Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

We are seriously evaluating this. We are good savers and investors and, looking right now at our 10-year financial growth, it's pretty obvious real estate pales in comparison with smart stock investments. So much that we might well sell our place soon given its a sellers market, invest the proceeds with care and go find a beautiful place to rent.

Yep. And sometimes that "smart" stock investment is literally just the S&P or sector investing. You don't even have to be a true stock picker to beat the return on real estate --even in this area.

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

We are seriously evaluating this. We are good savers and investors and, looking right now at our 10-year financial growth, it's pretty obvious real estate pales in comparison with smart stock investments. So much that we might well sell our place soon given its a sellers market, invest the proceeds with care and go find a beautiful place to rent.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Since 2000, the S&P is up 168% even with 2008-2009; unless you chose the absolute right house/location, most houses in this area are not up 168%, so yeah there is something to be said for investing and not buying a home – not to mention all the $$$ that could’ve been used to buy more shares that instead went to HVAC, new roof, landscaping, renovating the kitchen/whatever else etc.

You're over-simplifying by not mentioning that, if you bought a house in 2000, you've had a place to live since 2000, and a lot of your monthly housing spending since then has been simply to put equity into your own property, and the tax incentives on mortgage interest.

Yup. And as someone who has owned a home since December of 2000 when I was 23yrs old in the DC metro area, here I sit at 40 without a mortgage and 3/4M in equity I have lots a lots of disposable money to put into the market, though I will say that I just invested in some properties in downtown Nashville that are already cash flow positive. I'm taking a break from the stock markets and letting what I have in there just ride.

Right except you're putting in money at 40 that PP put in at 23 -- time value of money/time in market would be greater for PP, not you. That being said -- I think for most Americans like 98% of them, home ownership is better because it is "forced" savings and equity building. What PP is saying does work IF you are the type who can pay 2000-3000+ rent AND put in 2000-3000+ into the market every single month (and of course fund a 401k). If you can do that, you are likely of a certain higher income bracket in which case -- go ahead and keep doing that and buy when it's an all cash deal or a small mortgage just for tax breaks or whatever. Reality is most average Americans including the "average" DCUM couple sitting there at 300k has arranged their life in such a way that after the bills are paid, they don't have an extra 3k to throw into stocks month after month; for those -- home ownership is good equity building that guarantees that in 30 yrs or 15 yrs your housing cost is gone and then you have savings from that point on.

Anonymous wrote:

Anonymous wrote:Since 2000, the S&P is up 168% even with 2008-2009; unless you chose the absolute right house/location, most houses in this area are not up 168%, so yeah there is something to be said for investing and not buying a home – not to mention all the $$$ that could’ve been used to buy more shares that instead went to HVAC, new roof, landscaping, renovating the kitchen/whatever else etc.

You're over-simplifying by not mentioning that, if you bought a house in 2000, you've had a place to live since 2000, and a lot of your monthly housing spending since then has been simply to put equity into your own property, and the tax incentives on mortgage interest.

Yup. And as someone who has owned a home since December of 2000 when I was 23yrs old in the DC metro area, here I sit at 40 without a mortgage and 3/4M in equity I have lots a lots of disposable money to put into the market, though I will say that I just invested in some properties in downtown Nashville that are already cash flow positive. I'm taking a break from the stock markets and letting what I have in there just ride.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Considered it when we were in between houses, but considering how much equity we had in our house we sold and how low our mortgage was going to be, I was SHOCKED at how expensive rent was for a family of 4 plus a dog. Going rent a few years ago FAR exceeded our mortgage. Plus the tax hit. The math didnt work out.

From the quick math I've done on this every time I've considered it, when you are in the stage where you need a 1-2 bedroom, the math can work out favorably to not buy and instead rent and invest the rest. As soon as you need a 3 bedroom+ -- it seems cheaper to just buy than to rent a large apartment or a house. At least that's what I've found in this area.

Yup. We needed a 3 bedroom and 2 parking spaces that allowed dogs and holy hell, I almost fell over at the prices and this was in the burbs! The mortgage on my SFH is half of what I was looking at in rent.

Anonymous wrote:Since 2000, the S&P is up 168% even with 2008-2009; unless you chose the absolute right house/location, most houses in this area are not up 168%, so yeah there is something to be said for investing and not buying a home – not to mention all the $$$ that could’ve been used to buy more shares that instead went to HVAC, new roof, landscaping, renovating the kitchen/whatever else etc.

You're over-simplifying by not mentioning that, if you bought a house in 2000, you've had a place to live since 2000, and a lot of your monthly housing spending since then has been simply to put equity into your own property, and the tax incentives on mortgage interest.

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Depends on location and the kind of housing you want to buy or rent. We bought because we only had to put down 5% and the rent on the exact same apartment in the same building equals our PITI and HOA.

Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Considered it when we were in between houses, but considering how much equity we had in our house we sold and how low our mortgage was going to be, I was SHOCKED at how expensive rent was for a family of 4 plus a dog. Going rent a few years ago FAR exceeded our mortgage. Plus the tax hit. The math didnt work out.

From the quick math I've done on this every time I've considered it, when you are in the stage where you need a 1-2 bedroom, the math can work out favorably to not buy and instead rent and invest the rest. As soon as you need a 3 bedroom+ -- it seems cheaper to just buy than to rent a large apartment or a house. At least that's what I've found in this area.

Anonymous wrote:Yep. Equivalent of a monthly mortgage is going into the market and has been for years. For me it’s been bc I’ve moved around and am not committed to staying in one place. I suppose I’d commit if I wanted to stay any place greater than 5 yrs but right now this makes sure I have a huge down payment/nearly a cash purchase price ready to go if I want to buy. So for me - renting is a waste - hasn’t been true.

I work with a bunch of guys like this and TBH if I were to do it again, I may have gone down that road. They’ve given themselves a LOT of career flexibility because they can pick up and move whenever there is a good opportunity without having to worry about selling the house, what if we sell and can’t buy back into the same area if we return etc. A few of them have made a career that involves bouncing from NYC to DC and back. Because I’m close to a few of them, I’ve gotten to know that they are sitting on 7 figure net worths under age 35 that are completely liquid (no property). They can certainly still buy if they want with a cash/nearly cash purchase if that was their preference.

As much as everyone says the market here has sky rocketed, it is only true if you bought at the bottom, in the exact right area, and exact right house. And even if you did, it’s a house you’re living in so unless you’re willing to sell and move away, you can’t exactly get at that money (absent like a reverse mortgage or something if you’ve paid it off). Since 2000, the S&P is up 168% even with 2008-2009; unless you chose the absolute right house/location, most houses in this area are not up 168%, so yeah there is something to be said for investing and not buying a home – not to mention all the $$$ that could’ve been used to buy more shares that instead went to HVAC, new roof, landscaping, renovating the kitchen/whatever else etc.

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Considered it when we were in between houses, but considering how much equity we had in our house we sold and how low our mortgage was going to be, I was SHOCKED at how expensive rent was for a family of 4 plus a dog. Going rent a few years ago FAR exceeded our mortgage. Plus the tax hit. The math didnt work out.

Yep. Equivalent of a monthly mortgage is going into the market and has been for years. For me it’s been bc I’ve moved around and am not committed to staying in one place. I suppose I’d commit if I wanted to stay any place greater than 5 yrs but right now this makes sure I have a huge down payment/nearly a cash purchase price ready to go if I want to buy. So for me - renting is a waste - hasn’t been true.

Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!