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Comment by endisneigh | Hacker News Reader

I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms.

Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deductible, the rent itself allows you do pay down your principle faster, and most importantly you were going to live there anyway so your opportunity cost is 0.

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There can be massive opportunity cost lost to dealing with the various interpersonal interaction (ie work) thats required to rent a room in a house you are personally living in. If you're making a good salary, thats probably not worth it.

I don't see it any differently than having a roommate, which is something a lot of people who have good salaries have anyway.

What do you mean exactly by "a lot"? I don't think having roommates is very common for people who can afford not to.

In NYC, Bay Area, Boston, LA and Hong Kong I know people making top 15% income and have roommates. They don't necessarily need to, though.

Having a roommate has two purposes, I suppose.

One is freeing up $1-2k of disposable income that you can afford to spend on living in the most desirable place, but maybe would rather not.

Another is to feel less alone. Also, having somebody in the apartment when you're away, who could take care of a delivery or a pet may be important.

The people I know who have roommates do it because they’re cheap and they don’t like being alone. This includes people making $400k+/yr. Even people in 7-figure territory.

They’re pennywise pound foolish types usually tho.

Roommates are extremely common among young people, even when they aren't strictly financially necessary. Pretty much everyone I know has lived with a roommate at one time.

They are uncommon after around age 30 unless financially necessary.

If you're older than 30 or married you probably won't be interested in a roommate simply to save money unless you already know the person well or you have a mother in-law apartment set-up.

This is a lie told by landlords.

Just get a handyman, or a tenant agent.

That's what landlords do and they always come out on top.

It's not as simple as become landlord -> laugh all the way to the bank.

My parents were landlords for nearly two decades. Their property was not a good investment even though they kept cost down by doing all the work themselves.

>your opportunity cost is 0.

not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.

> not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.

I disagree - if you're talking about bubbles collapsing that's true no matter how you store your money, e.g. inflation ruining savings, stock market correction, etc.

You need a place to live anyway and government incentives will reduce your cost of living far below renting anyway.

What is true is that you drastically reduce your liquidity but I already presumed that in the scenario anyway by saying staying a few years (any housing correction historically will be resolved in a few years), if applicable

Why not buy securities with inflation protection? The treasury offers them.

I think you're training about i bonds, and they are capped at 10k / person / year

No, but good to buy those too. You can buy these uncapped: https://www.treasurydirect.gov/indiv/products/prod_tips_glan...

And the fact that you have some other asshole living in your house now.

More realistically this would look like “get married, buy a house, split the mortgage”.

> your opportunity cost is 0.

This is not true, and paints an unfair and unrealistic viewpoint.

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