"Millennials Should Be Happy They Are Stuck Renting"

94 Replies

Dumb article, written by a dumb writer meant to pander to a dumb audience. Keep paying my mortgage as you travel the world complaining about student loan debt and other ironic issues. 

Originally posted by @Russell Brazil :

Well I need my well paying tenants to keep believing renting is a better idea, so cheers to the propaganda.

😂 No doubt!

The writer of the opinion piece missed the biggest point of purchasing a home is not home appreciation or forced savings - it is paying for the ongoing cost of housing (unless you plan on living under a bridge) with depreciated dollars. A mortgage taken out today is paid with depreciated dollars for 30 years, and even if you get no tax benefit and paltry appreciation, that appreciation aggregated will largely wipe out annual maintenance costs aggregated, and may even be to the positive side of the ledger if you're even remotely handy. 

Two individuals in 1978 paying $500 per month, one renting, one buying. By 2018 the renter is paying almost $2k per month in rent, while the buyer is wrapping up his/her $500 mortgage. 

This is not to say all renters are making a financial mistake. Absolutely there are plenty of times it makes sense to rent and for plenty of people. *Most* of this is related to desired standard of living, ability to repair/maintain, and mobility. If you don't have to be mobile, are even remotely competent, and don't require an ever-increasing standard of living, high odds that you come out way, way ahead by buying. 

But everyone here already knew that. We have Bigger Pockets, after all :D

 

I recently bought a house from my neighbor that’s had it as a rental for 43 years (same tenant!). Over the 43 years, it was apparent all they did was a heating system, a roof, a water heater in 2002, a toilet and vanity last year. The house was gross, barely repainted, with 70’s carpet. They took in over $300k in rent in that time, while always renting it dirt cheap. Meanwhile, in 1976, this tenant could have bought a similar house for probably $20k. I’m not sure what my point is here, but I think it has some value for this thread haha. I think renting is not smart, but owning isn’t for everyone and that’s why we are here.

Do you want to be the old person with a paid off house that is amazed at how much your house is how worth even if they have no intention to sell... or do you want to the be old person getting booted from yet another rental because the landlord wanted to sell crying because of how expensive rent has become?    I deal with both.   Lock in a fixed cost (at 4% interest) or be at the mercy of the market in the distant future... it is a no brainer to me assuming you know you want to be in that area awhile.  

if i asked every one of my tenants if they wanted to be homeowners they all would certainly say yes.. that being said none of them seem to have taken actionable steps to become the very thing they wanted so bad in life

. They didn’t save a good down payment ,stay at the same job for years ,and no effort was made to build up a great credit score . Robert kiyosaki said it best when he wrote the following in rich dad poor dad

“ With every dollar we spend we unwittingly choose if we will poor ,rich ,or middle class”

@Dennis M. Complete coincidence I’m following your posts today I swear!

One of the things the article completely misses is the value of an inflation hedge being available to the general public.

inflation Is the biggest danger for wage-based savings. Wage gains usually lag inflation and can be vulnerable. Having the forced savings account of paying down your mortgage and most of your net worth in a primary home is a great defense against inflation.

I had somebody on Facebook that saw my wanted ad for ugly houses ask me if I would buy a double wide MH they knew of and then rent it to them.
This was for over 30k then I asked her what she will pay me in rent if I did that and she said maybe 400 a month . I laughed . I told her that would not even cover the mortgage insurance and taxes and If I was going to pay her rent I might as well just mail her a check each month and save myself the trouble !

Sadly Renters have no concept how expensive homeownership is or how numbers truly pan out . I guess they think they could buy a house and pay 300 or so bucks a month and magically cover all the ancillary expenses that owning a home brings with it ! Seems There is a good reason they are tenants 

I hate to say we as landlords profit off their financial illiteracy but it is in fact true . If you are able bodied and of sound mind there is no excuse to not be a homeowner in this country .i hated renting all I ever knew was fear of being thrown out as a kid . 

Originally posted by @Frank Jiang :

I apparently need a triple "ok boomer" because I tried to upvote your post and it wouldn't let me! Then I tried to reply to your post and sent you a connection instead...I hope it's not demetia, lol

 

Did your dad give you the article because you are living in his home and don't plan to leave until you could afford to buy a place.  Your dad is telling you "No.... don't wait.. leave now because renting is much better than buying..here...read this article"..lol 

Originally posted by @Anthony Rosa :

Did your dad give you the article because you are living in his home and don't plan to leave until you could afford to buy a place.  Your dad is telling you "No.... don't wait.. leave now because renting is much better than buying..here...read this article"..lol 

Ha! No I live on my own...renting :/ 

Still new around here and am in the save & research stage.

 

Originally posted by @Clay Ickes :
Originally posted by @Anthony Rosa:

Did your dad give you the article because you are living in his home and don't plan to leave until you could afford to buy a place.  Your dad is telling you "No.... don't wait.. leave now because renting is much better than buying..here...read this article"..lol 

Ha! No I live on my own...renting :/ 

Still new around here and am in the save & research stage.

 

That's cool! You buy when you're ready.  To start, the easiest way is house hack (Buy a duplex, you live in one unit and rent the other).  Actually, living at home you will save faster.  I was just joking with the article.  If I can help, let me know,  

 

So I have some thoughts that are maybe different from the others posted here.  Right now I am trying to sell two houses in Alaska and planning to move my family to Hawaii in 2 months.  In Alaska, it made some sense for me to buy rather than rent.    We lived in our first Alaska home for almost 10 years,  bought with no money down, refinanced twice and pulled out $90k in equity when we sold it.  We were ready to move in 5 years but couldn't afford to buy another place without selling first and my wife didn't want to sell until she knew where she was moving.   Renting would have made it easier to move when we were ready.  We dumped most of the proceeds from that sale into a (non real estate) business investment.   Our second home we have been in for 4 years, refinanced once and are ready to sell at a decent profit.   My other house was meant to be a flip but looks like it is heading towards a rental -- the lady who was going to buy it hasn't been able to sell her other house so she is paying a minimal early occupancy "rent" for the foreseeable future.  

From what I've read (and observed) about millennials, they tend to be more spontaneous than some of us older folks.  They tend to quit jobs when the fun is gone.   They are hungry for new sights, sounds, and experiences.  They also tend to think short term and be quite cynical about money and how it is being manipulated.    They also tend to enjoy extreme urban or rural environments.  All those factors point towards renting being a better solution than buying for most millennials.  Maybe renting would have been a better option for me too, I don't know.  Grant Cardone vehemently argues against buying a home.

I figure if I plan to be in one place for at least 5 years, buying is better.   And 5 years is about all I've ever wanted to stay in one house.   Knowing that I will be in Hawaii for at least 2 years, I'm struggling to justify buying -- with houses near my job on Oahu starting at $600k and comparable rentals starting at $2000... renting seems pretty appealing.


I’m glad there’s popular guys like grant Cardone around telling these young twerps owning is a terrible idea and to keep renting ,never to buy a home . Works great for guys like me who rent out apartments . I hope grant lives to be a 100 and reaches billions of folks with his message ! 

I don't own my residence... Doesn't make sense for me to buy when I don't know where I will eventually settle since I work in 3 states. Prices are also so high here (NYC) & I don't need to pay insane property taxes in a suburb yet with no kids. I can rent for much less than I can buy for. I also can invest the 20% downpayment I would have to make. 

But obviously I do own investment RE. 

This article assumes the house is vacant. It claims a 1% increase in value and a 4% interest rate, leaving a negative 3% return. Even if those numbers are right, it does factor in the rent you collect if you are an investor or the rent you save if it’s your home.

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