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lee-paxton
Self-starter and serial entrepreneur
I'm a serial entrepreneur and active angel investor. As an inveterate start-up guy, I’ve founded 10 companies, and as a ‘super angel’ technology investor, I have funded 20. I am the founder and CEO of my own financing and advisory firm I have been actively involved as an executive, board member or investor in various fields, including: wireless communications, technology-enhanced real estate, consumer electronics, international finance, social networking, space tourism, user-generated content, robotic pets, online video and mobile network security.
Renting is a waste of money
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lee-paxton followed this discussion
I strongly believe that renting is a waste of money and you're just throwing money drown the drain if you opt to rent when you can buy your own property. If you can afford the upfront costs of purchasing, why not?? Most landlords very rarely look after the property you're renting and you end up paying maintenance and upgrading somebody else's property in the long run and have nothing to show for it at the end of it all.
Where do you stand on the buying vs. renting debate?
cane.andrews followed this discussion
In the buying scenario, I'm leveraging tens of thousands in a 1.6% loan over 25 years.... and the mortgage is cheaper than the rent, so I can invest the difference into equities if I wish.
Renting is definitely a waste of money but buying is probably not a good idea if you're still highly mobile and move every couple of years, because the costs of moving outweigh the more expensive rent - but for most people who are staying in their home for 5+ years, buying is beneficial.
For me, in the next 15 years, I'll own my house and will never have to pay rent/mortgage again. Whereas after 15 years of renting, I'll still have to rent. Even if renting, in some situations, is a little cheaper, it's not going to be sufficiently cheaper such that I can just buy a house straight up in 15 years time.
Of course it's highly fact dependent - we can all construct scenarios where renting comes out ahead of buying, or buying comes out ahead of renting,where just a minor change in the expected return of the property, interest rate or expected return of the alternate asset swings it one way or the other.
Not really, Renting means you have exclusive use of the property, and no obligations for repairing or maintenance - it is an all-in cost for housing.
Not really, Renting means you have exclusive use of the property, and no obligations for repairing or maintenance - it is an all-in cost for housing.
Exactly, the mortgage is simply repaying a bank for renting their money - it covers only the purchase of a house. It does not include any other costs that arise by virtue of the ownership, such as replacing carpets, boilers, kitchens etc.
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Exactly, the mortgage is simply repaying a bank for renting their money - it covers only the purchase of a house. It does not include any other costs that arise by virtue of the ownership, such as replacing carpets, boilers, kitchens etc.
Yeah but in all my past experiences renting usually means you are covering the cost of the mortgage and then some, for a house that is in need of renovation, new carpets for example, everywhere I have rented have had really bad cheap carpets - if I pay for these I'm essentially improving the value of someone else's property, if I ask the landlord to replace these they see it as an expense they would rather not fork out for
At the end of the day, all we are talking about here is numbers and what if's. But everyone wants to live in a nice house and in almost all my past experiences I've seen people renovating their privately rented house out of their own pocket anyway - Painting walls, new carpets etc. Because people like having a nice home and a landlord is very unlikely to pay out of his pocket to give you a nicer house to live in if the equipment already in the property works
If you buy a house, you're going to sleep easier at night knowing your landlord isn't going to put the house up for sale tomorrow after all the money you've spent on it, which can happen.
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I personally don't see any negatives to buying, because if you do your research whether you spend money along the road or not within the 20/30 years however long your mortgage is over, at the end you own a property worth X amount, oppose to renting where after X years you are still paying rent
I think the better approach is to decide where to live first, and then deciding on how to make that work - renting might be more expensive, but better emotionally for someone; alternatively, buying might be more important, but that feeling of ownership outweighs that.
Sure if you move into a rented house and you do nothing but put your furniture in there and live there, you may come ahead financially - but couldn't the same be said if you buy a new refurbished property and then just not do any work to it for the duration of the mortgage?
When I looked at the price my house sold for 20 years ago, it was almost 3 times cheaper. Of course nobody can predict that housing will continue to rise, it could plummet or stagnate and stay roughly the same. But just looking at that and seeing what could happen was good enough for me
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