I INSIST, Renting is Better then Buying

It matters exactly. You are being dishonest.

Paying rent until the day you die is ridiculous. I will be mortgage free in eight years, by comparison.

Your argument is basically 'why buy when you can rent a smaller cheaper apartment.'

And the answer is, we don't all want to live in apartments. Some of us want some security.

 

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Truthseeker

I guess it boils down to this: You seem convinced owning real property is a losing proposition. If your axiom holds true, how do you explain the fact that literally millions of people around the world are/were rich because of investing their money in real estate, as opposed to some other investment vehicle?

When you can explain how that was totally luck/happenstance/whatever, and convince the forum that they were stupid to take equity positions in real property, then you might have a chance of making a point.

 

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*siiiiiiiiiiiiiiigh......

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The key word here is "INVESTING".

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So in your messed up world, you think a winning position would be buying a property to let, while renting a property yourself?

You will change you mind on this when you get older. Right now, you are kidding yourself that you are doing the right thing because you are not confident enough to buy.

 

Leverage is the use of debt to increase your income. If you use the house for yourself, you are not earning an income. Your are decreasing your cashflow (hence decreasing your liquidity) and increasing your debt. Any decent business person is trained to avoid this kind of situation.

You don't know what you are dealing with.

 

renting is just as expensive as buying. Cash flow is the same.

 

I know I am paying the same in mortage as I would in rent in this area, have made a profit of 100% in eight years, and will be mortage free in another eight.

No matter which way you try and cut it, dishonest maths, ignoring facts, unequal comparisons, you STILL have not admitted that you will be paying rent from your pension. Do you understand that? I will be retired, enjoying my pension, travelling, but you will be spending $1000 a month on rent. Your investments (which you still haven't honestly demonstrated as being at a higher level or better return than anyone elses) are goign to really have to work for you just to keep a roof over your head.

So, for your own sake, and your on financial security, abandon this folly of yours and buy property.

 

Look, it's simple, a person of 65+ today, who had invested in their own property at a young age and had continued to move up the property ladder, could be living in a house now worth a million pounds or more. They would have paid off their mortgage by this time, and being in their twilight years they could sell their expensive property and trade down to a smaller and less expensive one, releasing at least 500K in cash to do as they damned well pleased with in their old age.

 

I agree, in the UK at least, it costs exactly the same to rent a house as to pay the mortgage for buying one... People generally only rent becuase they haven't got the cash deposit needed to buy.

Seems to me that the only screwed up economics here are of those who are renting out their properties for half the price of a mortgage, when they could easily get more money for them without losing business.

 

And whilst most mortgages will be paid off at age 65, the expense of renting will continue until death which could be another 30 years.

@$800 pm thats....$288,000.00 extra

 

There's been a lot of discussion on which is the better "investment": Buying or renting a residence. It may be true that buying a place to live is actually not an investment becuse as truthseeker mentioned, if you sell it, you will need to buy something else. But why do we "invest" or work in the first place? Just for the sake of making money? Truthseeker, what are you going to do with the millions you will earn in the stock market while renting a home? Buy more cars? give it to your kids? ... BUY a house or a vacation home?

Also, while you're earning the millions in the stock market, waiting for interest, divident, and stock price to rise, LIFE is passing you by. You're getting older, your kids are growing up, etc.. Buying a house and getting into a 25 year debt allows you to instantly increase your standard of living. It will stabilize or ground you and provide a good environment to raise a family without the hassle of answering to your landlord. At the end of 25 years, your kids will have grown up either in a home they can call their own or a rented place.

The issue is not who is going to die with the most cash but rather who will live better with the money one has (which is obviously never enough).

btw, there's no such thing as an 80 year mortgage term and no such thing as 5% monthly savings account. You can punch in whatever you want in a calculator, it doesn't make it real. Get informed truthseeker.

 

And buying stocks is basically the same as stealing of other people.

 

Not to mention that buying stocks stands squarely against TruthSeekers position that corporations are evil and should be done away with.

 

I INSIST, Renting (porn) is Better then Buying

 

How about downlaoding it for freee, thats better than buying or renting

 

TruthSeeker, there are so many flaws in your logic and math that I hardly know where to begin.

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If you are talking about comparable property (homes), you'll find that rent and mortgage payments are very, very close to equal. But if you're talking about a three-room apartment vs. a four-bedroom, 2-bath house on a 1/4 acre or bigger lot, then sure - rent would be less.

One thing you seem to be totally overlooking is that rental property IS an investment, exactly like stocks and bonds, and the owner wants a PROFIT on that property just like any other investment. And if you are the owner/buyer living in that property that profit 'goes' into your pocket instead of someone else's.

And I've no idea what the terms are like in Canada but there's absolutely NO such thing as an 80-year mortgage in the U.S. In fact, less than half of that (30 years) is the current max although there's been considerable talk about increasing it to 40 years and some of those loans may actually be appearing on the market. But that's a LONG way form your ridiculous 80-year claim!!!!!

Here's some more for you to chew on: in the past 45 years I've moved (bought and sold) my homes here in the States several times. And each time I've gotten more for it than I paid originally. (Just try doing THAT with rent!) The very last time, about six years ago, I made a profit of almost $62,000 after having lived there for five years. I then paid cash outright for the house and several acres where I now live so I'm making no payments at all.

If I had been renting for that entire 45 years, I would have easily spent several hundred thousand dollars - just for a place to live - and have absolutely nothing to show for it today. Gone, used up - in someone else's bank account rather than in mine.

And besides all that, I also slowly accumulated stock over the same years and currently have a little over 250,000 shares in a widely diversified portfolio. So in a very real sense I've done the exact opposite of your so-called "plan" and it's worked out excellent for me.

Put in common terms, your plan stinks to high heaven. Once you reach retirement age, as I've already done, you'll STILL be paying rent while I'm still socking away the dough!

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I don't mind buying a house. Of course, I would pay with cash- not debt. LOL!

It depends, really. If I have the money to spend with the down payment, the mortgage is equal or less then the rent and the terms of the mortgage are reasonable and safe (for example, if it is a fixed mortgage, which NEVER increases), then yes, I might consider buying. Only if it is economically better then renting. And, of course, I wouldn't call that an "investment".

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I would call it "consumption".

Because, think about it. If it is economically feasible, then my standard of living is increasing. If it's not, I'm just getting into debt for the sake of consumption- the bad kind of debt.

Oh, and btw, I would use the extra money to invest in the stock market.

Of course.

Why not? All that you need is someone to agree with the terms. Besides, a lot of houses nowdays have more then 1 mortgage on them, which can accumulate that much. Also, the market where I live is very expensive, so long term mortgages are not rare.

I meant per annum.
http://www.ingdirect.com/osa_work/

I don't do that, as you can see...

I gave you a link. Get more informed

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As I said, I won't be buying stocks.

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I was wondering if you were listening to me.

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Who needs to be extravagant? Oh wait! Yes, americans need to have a bigger house then their neighbors. Sorry, I always forget that detail....

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Yes. It is an investment FOR THE OWNER.

That's when a property can be considered an investment. Not when you are using it. If you use it, it's consumption.

As I said before, if you refinance or sell it to other people, you can have notes, which upon accumulation can go over 80 years. Most americans seem fairly naive about the housing market (when it crashes, you won't see what hit ya).

Btw, here, the average price for a house is over $500,000. Houses here often go over $1,000,000. Such high prices (much higher then in most US) tend to have longer mortgages (of course, because most people can't afford over $2,000 of mortgage per month! LOL!!!).

It took you 45 years to own a house. What about your current assets?

If you had saved and used it to invest, you could have millions of dollars in current assets today.

Well, if you have enough money to pay mortgage AND invest, that just means you have a really good job. Most people don't have a really good job. They don't have enough income to do both.

Not if I use the saved money to invest.