I get that renting is like throwing money in a hole, but people are so much more nomadic these days. What's the big deal in moving once every 10 years once rent gets unbearable?
Do you want to redecorate to your own taste?
Can you even find anywhere to rent? Not everywhere has a liquid rental market.
Moving only once every 10 years sounds great. Renting means maybe having to move on notice as short as one month. Back when I was renting I moved about every 3 years, although that was also house-sharing with other young professionals.
Rent is usually more expensive than mortgage payments, and house price appreciation is your only chance to make a leveraged investment that pays roughly 7% annually.
Edit: also, obviously, after 20 years you have no more payments. Frees up a whole lot of cashflow. Would you really want to go into retirement on a fixed income with a variable rent payment?
Note that a "20 year mortgage" just sets the amortisation rate of the payments; you can accelerate it, and usually will end up re-mortgaging every 3-5 years to get better rates.
You have maintenance. And if something bad happens with the foundation, that's very expensive to fix. Unless you just plan to die and have the house demolished and the property sold (which is honestly preferable in some cases of inheritance).
I had to pay $25k to have supports installed in the crawlspace and other mitigation to avoid foundation work. I might have gotten ripped off, and the annoying thing is that I can't know for sure because I'm not informed about foundation work, structural engineering, or other principles.
Simply inheriting a house and trying to sell it turned me off from owning a home in the near future due to the arduous process of paperwork, red tape, maintenance, and a low-liquid market. I'll take a comfortable living van/RV over dealing with real estate again if it means I can reduce the risk of dealing with those things to zero.
Although there is an economies-of-scale advantage to maintenance on multi-family dwellings.
I don't want to keep a pile of cash around waiting for housing emergencies (personal emergencies are a different thing), and I certainly don't want to sell stocks to fix a roof if my roof fails during a recession.
setting aside trees, fires etc it hadn't even occurred to me that a roof may need replacing, aside from maybe the occasional tile.
If you look down a street where I live (Boston area) you can likely guess which units are rentals and which are owned.
I can't tell you how many houses I looked at with peeling, worn roof shingles, but a bangin' dishwasher and stove.
The neighbors insurance paid for that, but then he still had to pay almost $3000 right away to get the rest of the tree removed from his backyard, because it was still in bad shape. Was an unpleasant introduction to the wonderful world of home ownership.
I can stomach the idea of renting for the rest of my working life. My renting life was good, had more cash to spare, good landlords, etc.
What terrifies me is the idea that I'd have to keep paying rent when I retire.
Hahahaha. Ha.
There's going to be plenty of scarcity to go around for the rest of our lives. And unless you're already in the top 1%, or unless you believe full-on socialism will ever catch on in a country run by and for the benefit of capitalists and corporatists, you can personally expect to see a lot more of it once everything worth doing has been automated.
At least in the competitive housing markets of San Jose and Seattle this is not much of an issue as every apartment I've visited allows pets and most even have accommodations for them as perks. I suppose there are limits though so maybe if you wanted to have 4 dogs that might not be allowed
You have no more principal and interest payments. You still have property taxes (~$1000/mo for me) and most will pay insurance (~$300/mo) and you'll have on-going maintenance; I think it's wise to ballpark the last at 1% of the house market value.
I'm a two-time homeowner and it absolutely fits my family life situation very well, but it's a common fallacy that housing costs go to zero when the mortgage is paid off.
I like that approach as it makes clear the financial flows and put the tenant in the logical frame of mind of "am I getting what I'm paying for?" when considering new civic projects or other budget items.
--realtor commission (averages 6% of home price, or approximately 1.5 years of 30 year mortgage payments)
--title fees (frequently 1% of purchase price)
--other legal and bank fees
The NYT has a buy vs rent calculator that helps make decisions like these:
https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
In my apartment (managed by a property management company at that), they allowed me to repaint some walls, bring in three appliances of my own (washer/dryer and dishwasher), completely customize a closet, and replace a light fixture. Took a week for the business manager and corporate to sign off on the modifications, but they felt the requests were entirely reasonable.
This happened because of two reasons: 1) I asked. 2) I agreed to pay a very modest additional deposit for the modifications ($400 total), and used suitably insured vendors of their choosing to have the appliances and light installed (they let me do the closet myself, as the paint with just a $100 deposit to cover changing it back), at a total cost of about $300.
To get this stuff elsewhere I would've paid FAR, FAR more in rent (+$1000-1500/mo, easily). Though I asked, was very reasonable, and made it clear that I wasn't looking to half-ass anything.
At the end of the day the new apartment was a tactical downgrade ($700/mo savings) from where I came from. With the new stuff I got approved I have "broken even" on my changes after 7 months. Now for the next 4-5 years that $700/mo savings just goes in my pocket, the apartment is now barely a downgrade from where I was prior, and I have top-notch appliances that most luxury rentals in the city don't even offer. Moreover, when I move out those appliances come with me -- I should get a good 15-20 total years out of them with proper care.
OTOH, I lived in Belmont CA on $2000 rent for a whole house blocks from caltrain for over 3 years, no adjustments.
I think you have a bit of a skewed view of reality there - people in the US are far less likely to move for work than in past generations. You may be surrounded by a bubble of digital nomads, but it’s far from common.
What you gain is not having to pay taxes. If you're working remotely on a software engineer's salary, that can free up over $50K a year. That's enough to pay your rent, and likely also your food, for a small family even in Canada's most expensive cities.
Taxes are also throwing money in a hole.
I think most people couldn't do it because they have kids (and don't want to homeschool), or one or both spouses have jobs in a physical location, or they just don't like nomadic living. But it's an interesting idea.