
Why the New American Real Estate Dream Is Renting - mjfern
http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html
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HeyLaughingBoy
Dumb article! Homeownership is dead because you could be foreclosed upon? This
is news?

I bought my first house in the city about 12 years ago. First thing I did was
paint one bedroom wall cobalt blue cause I loved that color. Lawns are a pain
in the ass to take care of (and I don't much care for monocultures anyway), so
I began ripping up the lawn in the back and planting veggies, strawberries,
raspberries and prairie wildflowers that can take care of themselves. Added a
computer room in the unfinished basement.

Sold that house after 5 years and move to the suburbs (bad idea!). I like to
cook, so the second house had its kitchen ripped out and replaced with real
slate floor tiles, nice countertops and custom cabinets within 2 months of
moving in. Built a metal-casting setup behind the house. Bought house #3 way
out in the country and rented out house #2 for 2 years then sold it.

Hope to stay in house #3 until economy improves. I have 10 acres to play in
and a small machine shop in the basement. We have horses, chickens, large
vegetable garden, maybe goats or cows someday and can do whatever we feel like
with the property -- like the outdoor clay oven I haven't finished. Next
summer I think I'm digging a goldfish pond/water garden.

Try doing any of that with a rental! Not everyone buys to flip or to sell at a
profit. Most of us just want a place to live in that we can hack to suit our
current mood.

~~~
dionidium
"People who rent talk about the books that they've read, the trips that
they've taken, the skills that they are learning, the friends whose company
they are enjoying. Property owners complain about the local politicians, the
high rate of property tax, the difficulty of finding competent tradespeople,
the high value of their own (very likely crummy) house or condo, and what
kinds of furniture and kitchen appliances they are contemplating buying.
Property owners are boring. The most boring parts of a property owner's
personality are those which relate to his or her ownership of real estate."

[http://philip.greenspun.com/materialism/early-
retirement/whe...](http://philip.greenspun.com/materialism/early-
retirement/where-to-live)

~~~
randallsquared
Hm. Boring and secure, or interesting and anxious? :)

~~~
throw_away
why would renters be, by default, anxious? I would be anxious if I owned a
home and saw the drop in value over the past two years. or if I were upside-
down. or if my mortgage rate could reset in the future. or had to worry about
fire, flood or earthquake wiping me out.

as a renter, I don't care about any of those things. if my apartment building
burns down, the thing I'll be most sad about is my macbook and some personal
mementos. if they increase my rent beyond what I'm willing to pay, I just move
to a cheaper part of town. maybe I could be evicted, but finding a new place
is more of an annoyance than a financial tragedy.

frankly, owning goats and painting walls don't sound terribly exciting to me.
OTOH, things I value, like living in the grip of a big city and being able to
walk to work are essentially impossible without a fat stack of cash or else
renting.

~~~
randallsquared
As a renter, I am living someplace at the sufferance of someone else. Yes, in
some jurisdictions there are legal issues if they want to kick me out, and
mostly they wouldn't want to anyway, as long as I pay my rent on time and
don't annoy the other tenants too much, but the difference is that if you own
a house, it's _yours_. There's always someplace you can go where no one has
the right to make you leave. There's an added level of security to that, even
if most renters don't care.

~~~
DenisM
The "ownership" isn't what it used to be - you have to pay property taxes, and
if you don't you will be kicked out of "your home". In effect you are renting
your home from the government.

~~~
throw_away
not to mention that until you pay off your mortgage, your home belongs to the
bank. anecdotally, I know more people who have had to deal with foreclosure
than with eviction.

so, OP, would you revise your statement to "boring, but secure in ways nobody
really cares about, and even then, not really or interesting, but anxious (if
you're prone to be anxious about things that rarely happen and even then are
more hassle than hardship)."? I'm not having a hard time with this decision.

home ownership is great if you need lots of space for your things or your
kids, or if you want to impress people. but that's not me. and I don't feel
the slightest bit anxious about my choice.

------
modeless
This is why I cringe when I hear people say that the current economic crisis
is an indictment of capitalism; a proof that free markets behave irrationally.
To believe that you have to ignore the enormous distortions government has
created, not just with recent legislation but with things like the mortgage
tax deduction that are so entrenched and popular we take them for granted.

~~~
barrkel
If the market were so perfect, why wouldn't it cope with distortions
perfectly? In other words, why wouldn't it predict the effects of mortgage tax
etc., and still come out OK in the end?

~~~
barrkel
I find it very interesting that when this argument is presented, people don't
post a counterargument - they downvote instead?

------
hs
another disadvantage for homeowner:

in unstable countries, the new government that replace its old one will try to
steal the land from owners

if the new gov is democratic, it only honors those who can show certificate on
ownership (even the ones granted from old foreign govt -- the countries that
gain independence from colonial in ww2 show this trend)

if the new gov is communist, it will simply take the land (worse, the big
owners will be labeled capitalist and shot to dead -- happened in china, see
the movie 'to live' by zhang yi mou for ref)

those are best and worst case, of course, america is far too remote from civil
war or foreign invasion

the renters can just walk away; however, the old money will be of no value ...
so it's better to diversify to foreign currencies or precious metal ... or
tools

my grandparents actually buried a minivan when the japanese invaded us. once
the new govt is set, they resumed the transportation business. it could be
more optimal than currencies/metal because ... after a war, the survivor is
the only pioneer, no competition -- sufficiently a monopoly by event

------
TweedHeads
Never rent unless in a precarious situation or if just recently moved to a new
city. Buy as soon as you can. You will never ever see a penny of what you paid
for in rent.

If you buy, even if temporary, you get all your money back, sometimes more,
sometimes less, but you always get some.

I lived most of my early adult life renting and I can tell you this, more than
$100K wasted and no way at all to get one cent back.

~~~
yummyfajitas
Mathematical identity:

    
    
        price to own = price to rent + speculative ownership premium + transaction costs
    

If you rent, you get to keep that speculative ownership premium and the
transaction costs.

An additional problem with owning is that your investments are bound to your
living situation. Orthogonality is good. I can change my living situation
without even thinking about my investments.

~~~
pg
On average the owner does get something in return for the speculative
ownership premium, though, so you have to factor that out.

