Posted on 03/19/2011 1:03:32 PM PDT by SeekAndFind
And at the end of renting for 30 yrs., what do you have?, but for our sake keep up the good work.
for later
*shrug*
If he’s happy, I’m happy for him. (He doesn’t sound happy though; he sounds like a crank.)
He makes some obviously correct points, such as its being easier to leave your current abode if you’re renting. He also makes some statements that aren’t true, such as house purchases’ requiring a down payment. Ultimately, however, he’s simply discussing his own priorities in life, which is fine.
RE: AS a landlord, I want to thank you for that advice.
I sure hope yo have good tenants. My friend owned some apartments for rent in Milwaukee and they trashed it like a zoo.
One of his tenants did not pay for 3 months. My friend had to go to court to get him evicted and it took him several months and lots of lawyer fees to successfully do the job (Milwaukee is tenant friendly). He had to repair a lot of damages after the tenant, who trashed the place before leaving, left.
Being a landlord is a huge headache.
At the end of 30 years, you have the 100K that was not used for a down payment. Invested in stocks, it historically gives a higher return than housing. Didn’t he cover this in the piece? Also, you’ve got the (in my neck of the woods anyway) $1,000 a month that you saved in mortgage payments. 12K a year X 30 years is $360,000.
Rent = freedom; if it becomes necessary.
The other thing is a house won’t last the life of a 30yr. mortgage. By then the siding is warped and the roof is sagging. Why? Because they’re not building houses out of 200yo trees. They’re gone. The wood now is barely 80. It’s soft, developed to grow fast and be harvested sooner. You might as well build a house out of balsa. Ever wonder why houses built before the 1930’s are still standing? After WWII when the GI’s came home they wanted their own house. So here came Levittown. (http://tigger.uic.edu/~pbhales/Levittown/). Cheap affordable two bedroom, single bath, kitchen and living room. Now look at the monstrosities we’re offered. There are no more starter homes like Levvitown. We’re told we need four bedrooms, family room (oops, I mean community room) two and a half baths, split level and all that.
RE: He also makes some statements that aren’t true, such as house purchases’ requiring a down payment.
Why isn’t this true? I thought N-I-N-J-A loans are no longer in existence after the mortgage meltdown of 2008-09...
As another landlord - I thank the writer too.
Have a renter that’s been in one apartment for over 30 years - been through a few landlords - the next landlord may want the apartment back for a relative - the ultimate eminent domain.
Have an uncle that reverse-mortgaged his house, you can’t reverse-rented.
For many people it does not make financial sense to own a home but that is not generally the reason people buy one in the first place. I wonder if the rent saved is factored into the 0.4% return referenced? I would bet “no”.
Since I am as handy as a guy with ten thumbs owning a house is not a financial bargain for me but those who can fix things can capitalize that ability in increasing home values.
Since it is claimed that I would have to pay 1800 to rent my home and I only pay 1400 for the mortgage, taxes, insurance, it would be hard to make a convincing argument that owning is the better deal. But becoming a landlord sends shivers up my spine knowing the idiots I would have to rent to.
I realized the housing bubble had burst when I overheard a certified idiot at the gym say, “I just bought three houses today to flip.” I didn’t finish my workout. I went home, called a realtor and put my house on the market. It sold in a week. By the time I closed all the articles were headlined with a variant of “Has the bubble burst?” I paid off my mortgage and bought outright a 2000 square foot 20 year old “manufactured house” on 6 acres of woods 18 miles from town.
I’m now laid off so I have no income. But, I have no mortgage either. I could just live here. However, when I do get a job in another town, I’ll rent out the mobile home. I’ve refurbished it and it’s really quite luxurious, though not the most energy efficient.
From now on I’ll do something similar. There’s no reason to buy McMansions and be buried in debt when you can live in equal floor space and own it outright.
Home ownership is not for everyone. After 27 years in the mortgage industry I have had to look more than a few people in the eye and tell them they were not in a position to own property. Of course they were outraged.
Owning property is a responsibility as well as a a good investment. You have to make payments, pay property taxes, pay insurance and make necessary repairs.
That being said this is the most “down” real estate market I have ever seen in my lifetime and its a wonderful time to pick up great buys on real estate. Sooner or later the market will come back. It always does. Not to mention if you are just looking for a home to live in you will pay less now than anytime I can remember. Your monthly payment on a home that has nowhere to go but up in value will be less than the rent on an apartment.
VA loans are still available for no money down. Sellers offering financing can set their own terms. Banks can decide on mortgage terms by considering the property and the buyer. It’s a borrower’s market out there, if you have a suitable income and a good credit rating. Our banks are asking us to borrow all the time ... Want a bigger house? A new car? Remodeling? A cruise? Just call!!!
yes, he did... however, throughout my lifetime, out of all the renters i have known, not one has had all this money at his disposal... i don't know why that is...
Anyway, for a guy who allegedly has some expertise in stock trading and financial markets, it’s a little disconcerting to see that Altucher apparently doesn’t understand the meaning of the word “leverage”. Leverage happens when you put as little cash into a home purchase as possible and then reap the full benefits of the (normally) significant appreciation in value that occurs over a decade, or even just a few years. The appreciation you realize isn’t based just on the cash downpayment portion of the real property you purchased, but on the whole enchilada. That’s precisely how you “leverage” your cash - - by using (mostly) other people’s money, in this case a mortgage.
The author also forgot to mention that you can write off mortgage interest against your taxes.
Believe me, that can really add up.
RE: if you have a suitable income and a good credit rating. Our banks are asking us to borrow all the time .
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That’s all very nice but the problem with the word ‘suitable income’ is it lasts only until the next company layoff.
I live in Long Island and have had to see several people sell their property at a loss because they have had to downsize as a result of the husband being laid off from his high paying Wall Street Job and going for close to a year looking for a job with no offers.
There used to be a time when a 20% down payment was the norm. It seems that the banks have not learned their lesson from the mortgage disaster.
Probably because they’re irresponsible losers who spent the cash on wine, women, and song. And then wasted the rest. You and I, however, wouldn’t do that, right? :)
In the USA, the inflation adjusted return on homes over the last 70 years is 0%. The fact that the vast majority of homeowners in the United States believe otherwise is the result of a well crafted con job by the construction and banking and mortgage industries to fleece Americans of wages and wealth.
It’s only a matter of time before the small landlords in this country realise this, and the RRE market will be forever corrected to manage the reality of the marketplace.
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