Why is renting a place to live so convoluted?

[Grendel]

I think you give some solid advice here. Home ownership is not for everyone in every circumstance. If I had to move right now for work I do not think I would buy a home I think in this current market I would look for a rental option and try to ride out the coming recession (if we are not already in a recession) and hope that recession does not turn into a depression. Like Siress I was able to sell my home in MA for a large profit in 2021 and lock in a very low interest on only slightly over valued home in SC. Right time, right circumstance situation but if that decision was in front of my now I either would not have sold and moved to SC or Sold and rented a home down here. Would I be a life long renter? No way there are always opportunities you just have to be patient and wait for the correct market [e.g. never sell stock in a down market you will only lock in your loss]

[flyweightnate]

I'm gonna add to the trend... but with a caveat.

I've made a boatload off property/ real estate relative to my income. Between my house and my starter house/ now rental, 5 years salary in equity, over a 9 year period. Plus rental income!

BUT.

I did my own work. Drywall, paint, plumbing, flooring, electrical, major appliances, insulation, cabinetry, tile, interior and exterior doors, even a few windows and an auxiliary HVAC. I paid for a central HVAC replacement on the rental. If I had paid out of pocket, I'd have lost at least half the gains, maybe more. Likely enough that I wouldn't have had the cash to move, thereby negating the second half of the gains anyways. I have literally spent tens of thousands of dollars that, on occasion, I barely had, to keep these houses in functional shape. And I've only paid for labor on four projects, total!

I worked with a guy who wanted to buy with 5% down, and that 5% borrowed from his inlaws. It's just dumb at that point. A dishwasher breaks, and you're broke. Taxes go up, and you're taking out personal loans to avoid foreclosure. A storm wrecks your roof, and you commit insurance fraud to cover the deductible. I warned him to have between 10k and 10% in reserve for first year failures.

Worse: you lose your job in a down market, and have to sell at a loss.

There is a lot of risk to being leveraged that way.

With renting, you never can lose more than a month's rent. (Well, two, if you break lease at a bad time.)

There are times, places, and financial situations where renting is absolutely the better option. If houses are too expensive, or too small, or need too much work. If your finances can change quickly. If you might want to move soon! (Which can cost up to 20% of your value, between listings and commissions and repairs and taxes and movers.) Or simply if you're not that handy.

Don't let anyone pressure you into buying, if you're not really, truly, ready. (Not just OP... but generally.)

[Siress]

Renting makes sense for people that are transient(1), incapable of purchasing, or not sure what they want to purchase.

(1) You can estimate how long it makes sense to rent the type of home you want, compared to purchasing something equivalent. The time frames I've seen range from 18-36 months, proportional to the cost of the home. (i.e. cheapest home has positive ROI at the lowest duration)

Btw - just looked up the estimate on the home I purchased last year... If we sold it now, subtracted costs of purchasing and selling, taxes, etc... we'd have made ~50% of our combined salaries just on the real estate. I get where Chuck E Ducky is coming from, but I'm not as much of a gambler - or just not as sure of the information as he's steeped in this stuff every day while I'm just in it as is prudent for myself. I just play the numbers. So, for me, I was happy to lock in the lowest interest rate I've ever seen on a mortgage, and 'time in the market' being of greater value in the long run than 'timing the market.'

Literally - very bottom of this curve... couldn't be happier about that...

[Seajay]

The point to owning your own home, aside from privacy and freedom (mostly). You are paying into a longer term profit, or just accessible capital. Renting you are just spending money with zero return. Owning your home is generally considered a safe investment in the investor portfolio.

It largely comes down to accessibility and cost of living though. Renting is great if you don't care about such things.

[Chuck E Ducky]

I scooped up a ton of land cheap as Covid broke. I got two approved 3.5 acre building lots for less then the value of one in a premium location. The summer New York City was burning I sold a few pieces and even held the note acting as the bank on one making interest on the land on top of the premium I got for it. They recently payed me off but I made $9k in just interest over the life of the loan. Banks were begging me to assume the loan. Nope paper shredder they go.

That was a great time to buy housing market was flooded and rates were so low. These people that are buying now are going to eat it hard when the bottom falls out. But I got a house to rent em.

[Tarsun2]

i got into a house about a year or two before the pandemic; lucked out there.

[Chuck E Ducky]

Some of my largest capital gains I have been from home ownership. I started with a two family rented one lived in the other. Lived rent free for years while I did this i was using others money to build capital. I then purchased a home with an accessory dwelling. As long as it’s all rented I’m now collecting a positive cash flow. I’m using others money to pay my mortgage and build equity. It’s a 2nd job for sure but I’m a Jack of all trades and can pretty much fix anything. I don’t pay people to do things I can do myself. I have what I have because of it. I will be retiring at 46 because of how well I have done making moves in the housing market. I’m just waiting for material costs to come back down and my current house will pay the majority of my mortgage on my new home on the massive piece of land I purchased outright because of the capital I was only allowed to do because of my multiple home purchases. You know what every single top 500 Forbes richest people have in common… Real estate!

Key is knowing when to buy and when to sell. Don’t fall in love, don’t get in a bidding war, do your research know what your getting yourself into, and don’t bite off more then you can chew. Now is the worst time to buy wait. The past few years I have been selling building my buying capital. But after the feds rase rates the bottom is going to fall out of it. Let it hit bottom and buy right in a good location and you can’t get hurt. I plan on scooping up some deals when it dose.

[lew]

I'm gonna second the requirement for a "dislike" button and am also going to continue the dogpile: owning a house has been way less of a pain in the ass than any renting experience. My mortgage payment is cheaper than any local rent, and I have a shitload of space. I can maintain my house far more effectively and proactively than a complex can maintain a whole slew of rentals. If you want to live in stacked cages, go ahead and rent an apartment. Lastly, I live in the land that zoning forgot. Speedball pitch in the backyard? Only if I want it.

[BrickHaus]

Im with Siress. Owning is the way to go imo.

I've honestly never rented. I lived with my mom til I had my ish together, then my wife and I bought our home in 2015. Its been amazing. We have steadily improved what we wanted, and we have done a lot of the work ourselves keeping costs down. Im handy enough to keep up with it, and I get a ton of self worth out of making our nest nice. We pay less than 1k a month for mortgage. Though that in and of itself is rare. I watch countless friends without the credit throw $1200-$2500 a month away renting, and they don't have any equity to show for it. They also have shared space with neighbors that suck, and constantly complain about their crappy appliances, room temperatures, ect. Plus at those rental rates, they are not getting anywhere financially.

I have a friend who has barely been getting by, and her rent almost doubled with out warning when her current lease is up 1200 upto 2700 monthly for a 2 bedroom apt with a garage. Shes looking at being homeless if she can't find a new place she can afford. That won't happen to me unless I refinance. Plus in the group garage they have they have had stuff stolen from their cars numerous times.

If anything Ill eventually rent my house out and buy another.

It is kinda nice to fix your own roof.

[Siress]

I *need* a dislike button for this. I made ~$20k/yr from the cheapest condo I could find, and that's after subtracting cost of ownership (including 1 major appliance), purchasing costs, and sales costs. Down payment was $12k, mortgage was $1.3k/mo. Now, it's totally possible to go out and over leverage one's self, pay too much for a house, not realize how much the needed repairs will cost, have unforeseeable hardships, etc... but those are either 1) in your control, or 2) exceedingly rare events.

[SignOfZeta]

I’ve rented a lot, only bought a house once and it was huge massively expensive PITA that continues to bleed me dry 15 years later so I guess I don’t get the complaint. When I rented I paid no tax, never even looked at interest rates, never fixed a roof or bought a dishwasher. Unless you need things like privacy, a garage, ten bedrooms, a large basement, etc I honestly consider home ownership a scam to be avoided.

[sniper97]

I think landlords just want to protect their investment and collect their rent.

[Headshotted]

It's been a wild experience. I was hoping to save some money and live with family until my place sold and I could start putting into a place back east, but, that's not the case. So, if anyone's got any spots in MD, lemme know. This has been a headache and a half as I have a firm start date and am all kinds of discombobulated.

[Headshotted]

Oh dude, that's 200% the plan. I'm moving back to MD, so, it's just been heck and a half trying to find a place in the area. I'm drafting up the paperwork this week with my realtor and I should be on the market next week at a minimum. Even without photos there's a chance the place will sell for at market or over because of the way things are.

[sniper97]

I am sure this is for alot of people, not everyone. Lower class is getting crushed, very sad. Price of eating out has gone up. Solving the supply chain issues would help alot and ending the Ukraine/Russia war.