how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Maintenance costs suck, but even that has a silver lining when you own. It’s yours. When your fridge breaks in a rental you’re not out any money, but they just bring by another jank landlord special. I redid my kitchen with Thermador, not the top of the top brand, but pretty far up there. That cost quite a bit but it’s mine and my kitchen is far better than anything I had renting.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
Historically housing as an investment is one of the least risky gambles one can take. They even have a saying, “safe as houses.” People will always need a place to live. Tbh, buying a house is probably safer than government bonds right now.
People will always need a place to live, yes. We also always need food, and general safety from harm. A home is no good if you lose any of the other two while living there. That can happen if, for example, the government or your neighbours decide that your kind is undesirable, or an arbitrary trade war forces businesses in your area into downsizing/bankruptcy and losing you the jobs that paid for your food, or the same happening to farms in the area. How big these risks are will depend a lot on where you are and who you are.
how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Maintenance costs suck, but even that has a silver lining when you own. It’s yours. When your fridge breaks in a rental you’re not out any money, but they just bring by another jank landlord special. I redid my kitchen with Thermador, not the top of the top brand, but pretty far up there. That cost quite a bit but it’s mine and my kitchen is far better than anything I had renting.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
That too, last year before I finished my mortgage my neighbor was paying well over double my mortgage, property taxes, and maintenance costs combined.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
Historically housing as an investment is one of the least risky gambles one can take. They even have a saying, “safe as houses.” People will always need a place to live. Tbh, buying a house is probably safer than government bonds right now.
People will always need a place to live, yes. We also always need food, and general safety from harm. A home is no good if you lose any of the other two while living there. That can happen if, for example, the government or your neighbours decide that your kind is undesirable, or an arbitrary trade war forces businesses in your area into downsizing/bankruptcy and losing you the jobs that paid for your food, or the same happening to farms in the area. How big these risks are will depend a lot on where you are and who you are.