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Comment by beryilma | Hacker News Reader

Owning a house does not mean not owing anyone a cent. You still owe multiple types of taxes to the government. You still need to get insurance. You still need to make repairs.

I actually find piece of mind in renting. I can always say screw it and move to the cheapest part of the country as I am getting closer to retirement age.

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Rent can increase faster than your income. Owning, even with higher carrying costs, derisks housing both from an expense and sourcing perspective.

> Owning… derisks housing both from an expense and sourcing perspective

Except if property taxes increase beyond affordability as they have for many folks in some states recently.

Wouldn't their rent go up at a similar rate since the home owner would be copping those tax hikes anyway?

not necessarily. rent and market value are related, obviously, but they don't have to increase at the same rate. in some markets, property values can increase much faster than rent.

https://www.investopedia.com/terms/p/price-to-rent-ratio.asp

Yeah, I agree. Rent is essentially capped by median income. If mortgage rates are cheap enough, housing prices will skyrocket, but median rent will barely budge.

Profit

California limits increases in property taxes to 2% for this reason. More generally, property owners vote at a high rate, so governments will usually be less aggressive in increasing property taxes. Of course, they still go up, but it's generally less of a risk.

California’s approach privileges people who have lived in California in the past over the affordability of housing for people working today. It’s got its own popularity issues.

It’s very similar to rent control in that way.

    > as they have for many folks in some states recently.

Can you name some examples?

Rent can do that. But in renting you can more easily move to a better paying job.

I'm not sure you're derisking as owning is also subject to local taxes of whatever sort. Those too can increase faster than income.

And if you can’t find a job because you’re older or the employer market is raking you over the coals, you’re screwed, while your housing is mostly locked in.

But that's the point,

rent === mobility

own === 10x less so

Sure. It's nice to want roots, have a home, etc. But given how the financial system works - and the economic and sociopolitical systems that sit on top of it - an RV might be the smartest way to go.

Sure there's always the American Dream narrative but (leadership) actions speak louder than words. Seeing Santa Claus or the Easter Bunny is 100x more likely than the now mythical Anerican Dream.

The ongoing expenses of owning a house are still there, taxes, insurance, maintenance, electricity, garbage disposal, water, gas etc. if you can't cover these, you're not debt free.

As you get over retirement age medical expenses could dwarf all these. you need to be more than debt-free you need to be debt-free and a good cashflow and emergency funds you can call on.

Just as you get to the top of the hill there is always another one to climb.

Those expenses are not "debt" in the traditional sense. I've got two paid-off houses, and my annual combined expenses for them come to something around $20k/year.

While what you’re saying sorta makes sense I think you’re missing that money spent on a mortgage goes into an appreciating asset that you own.

Money on rent goes to pay for someone else’s appreciating asset you don’t own.

Insurance isn’t that much and you have to pay taxes multiple times on all your money anyway but at least property has a chance to fight back a bit or hopefully outpace inflation.

The money you earn today and sits in your bank is going to be worth very little in terms of spending power by the time you want to move somewhere cheap if you’re not keeping it in investments or property.

We’re entering a dark time financially and there will be a significant quality of life difference in 20 years of those who have money in the right places today.

>goes into an appreciating asset that you own

Like any asset, it _could_ appreciate, but is not guaranteed. Where I live you can buy a house for 15-40K where normal prices in the country are 100-200K. It didn't use to be that way, last decade was all downhill for the city.

If the housing market crashed in any meaningfully impactful wait there would be way bigger issues to worry about and you’d still only be in the same situation as a renter, maybe even still more well off.

Selling that house before moving to the country side is surely amount to something

> I can always say screw it and move to the cheapest part of the country as I am getting closer to retirement age. reply

Something similar to this is why I prefer renting and why anyone who unshakeably believes renting is “throwing money away” is immediately suspicious to me.

I’ve always tried to rent the cheapest (some would say crappiest) apartment in an area that I’ve really wanted to live. I’ve done quite well financially and in terms of lifestyle as a result. I would’ve done better financially by buying a home somewhere I don’t want to live, but what’s the point?

It’s just a numbers thing. Applying emotion and trust (in your words) to a numerical financial decision is naive at best. I would try to change your mind with numbers and facts, but I can tell it would fall on deaf ears/eyes.

Yeah I don’t deny there are ways to make more money than the choice I made. How would you answer the question I asked?

> I would’ve done better financially by buying a home somewhere I don’t want to live, but what’s the point?

Few decisions are purely numerical to most people. Or rather there are many decisions people claim are purely numerical and then make suboptimal numerical decisions on.

It doesn’t make my choice a bad choice and doesn’t mean that I threw my money away on rent anymore than a homeowner threw their money away on a refrigerator, property taxes, etc.

I exchanged a small amount of money for a place to live and had money left over to spend/invest in other ways and I got to live in an area I really love.

I guess that’s what I get for being naive at best.

It was this comment:

> Something similar to this is why I prefer renting and why anyone who unshakeably believes renting is “throwing money away” is immediately suspicious to me.

That doesn't seem like a rational take. Renting IS throwing money away if your goal is to maximize wealth. Paying off a mortgage early when you can get a higher % return in the market than the interest rate of your loan is ALSO throwing money away.

To try and claim you're generating more wealth by renting just isn't true. To claim you're living the lifestyle you prefer, great.

To be suspicious of everyone who makes such a mild claim is a microchasm of why the world is going to hell in a handbasket.

> Renting IS throwing money away if your goal is to maximize wealth

I never said that was my goal.

> To try and claim you're generating more wealth by renting just isn't true.

I never claimed this. I have rented and I have generated wealth, however.

> To be suspicious of everyone who makes such a mild claim is a microchasm of why the world is going to hell in a handbasket.

It's usually because these people refuse to believe there's any benefit to renting and jump to conclusions and claim I said things I never said.

I wonder if I can find an example of such a situation?

Ignored this line by me huh? Convenient. Or, to you your word, suspicious.

> To claim you're living the lifestyle you prefer, great.

No, I saw it. Congrats on getting one thing not completely wrong. Go for two next time. No point in trying to be perfect all at once.

You must be a blast at social gatherings lmao

I’m really not!

I own several houses, and even with taxes, maintenance and insurance, it's cheaper to own two than renting in the same area..

You can buy better neighbors with a house, and less crime.

> You can buy better neighbors with a house, and less crime.

I wish!

I built a fancy house in a fancy neighborhood, and then a real a-hole bought the house next to me as his retirement home.

I feel this.

Unfortunately the only surefire way to avoid this situation is to be the bigger asshole.

Not the only way. You can do what Bill Gates did, and buy all the surrounding properties. In his case, some of his staff live there.

Billionaires do this - Zuckerberg did the same.

I don't have that kind of money!

Yup: After my a-hole neighbor yelled at me because he thought I was mowing his lawn, I got the property line surveyed and had him remove all the shrubs he planted on my land.

Might be some selection bias happening. It's usually not the fancy neighborhoods that get a reputation for being humble and down to earth.

A-hole neighbors have nothing to do with income level. I've also had a-hole neighbors who were dirt poor.

In my case, the advantage is that I don't have to share a wall with my bad neighbor.

Edit: I should add that the rest of my neighbors are awesome, Just like every other place I've lived.

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