rent to buy 1 of 3

RENT TO BUY

A minion brought up “I don’t think buying a home is a good idea” the other day.  I thought this would be a good topic, if for no other reason than in the last dozen years the housing market changed as drastically as just after WWII, if not more so.  Now, while I agree that ownership no longer pays, I can see why renting sucks just as bad.  But since you aren’t living on junk land, you get to pick one of the other Lesser Of Evils.  I won’t bring up junk land again, because I love you all.

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Let’s talk about buying, then renting, then the dreaded buy/rent hybrid.  First off, a show of hands please.  Who here believes ANYTHING, in light of the last decade of all dysfunctions combined, is going to be anywhere near as “good” as it is now?  Don’t we all agree thirty years hence is going to blow chunks?  If this is the consensus, who thinks assuming a multi-decade debt chaining you in place is going to be a good idea?  Just that one question should give anyone pause.  I won’t belabor everything far worse-you know what they are.

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Okay, but beyond that.  If you look at the long term trend in real estate prices since the Federal Reserve Bank was granted monopoly rapine rights, essentially you see that real estate NEVER went up in price as an asset.  It stayed flat for a century once adjusted for inflation.  Now, gold isn’t any better as an investment, because it has been artificially suppressed.  Silver, even worse.  Government paper is a joke as is ANY corporate or banker paper promise.  We all know Social Security and pensions are humped-we just don’t know when.  Truth is that ALL wealth is gone.

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If you are a little peon, if you are not truly one of the ruling elite, one of the fraction of the one percent, you don’t get to have wealth.  You are a wage slave, and don’t you try to escape.  They have fugitive laws for that.  You cannot ever truly save or accumulate wealth.  The silver you bury in the back yard will be worth a king’s ransom one day, long after you are dead.  But the ONE asset you’ve been promised was your road to treasure and happiness, the house?  No, sorry, they humped you, then left without cuddling.

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Not only did inflation wipe out all gains, and property tax at a minimum doubled, you cannot buy adequate quality material to even properly repair the thing anymore and that little detail assures its true value drops over time.  More and more maintenance, with far worse materials, and your house is truly a money pit.  Even as you invest premium amounts in less worse quality ( such as a metal roof, a better furnace ), the extra long term cost per year adds up to serious money even after you pay off the bank.  You live long enough, to over the initial payment.

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If the whole point of buying a house is to need less money when you retire, and after the loan is paid you have monthly $200 in property taxes and are still amortizing the new roof and central heat and air upgrade at another $200, how exactly did you invest in having no rent cost for retirement?  If your Social Security is $800, how is having half that go to rent even feasible?  As long as you don’t pop any pills, perhaps you can make it work.  Until property taxes increase again.

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Or food prices increase.  And yet, just plain renting is no better.  You pay MORE than a mortgage, so you don’t save on lack of maintenance.  And it never ends.  At least with a house, you only pay from 15-30 years, then get your payments halved ( unless you live too long ).  With renting, you only have increasing costs to look forward to.  I don’t know about you, but when I worked for Da Man, only minimum wage hikes gave me a raise.  Wages don’t even come close to inflation.  You CAN’T get ahead in this game.

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Now, most folks think they want to rent so they can move to available jobs.  It used to be true you could sell the house to move to a job.  That is no longer the case.  Wages are too low, housing prices too high, and eligible buyers shrink with the work force.  So THEN, renting became a good idea.  But, turd in that punchbowl, now any job paying enough to meet rent is in a high cost of living area.  Every time you move, you lose the cleaning deposit ( regardless, it seems near universal ), AND your new rent is higher.

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Rentals used to be cheaper, because of bulk buying.  Slap up a hundred unit apartment complex and every appliance, every rug, each square foot building, and management costs, all went way down.  But then the hooer bankers got bailed out with trillions and jacked up both house down payments and tightened lending requirements.  Far less folks could buy and rental prices skyrocketed.  The bankers like this artificial inflated profit.  You as a renter, not so much.  And don’t even get me started on illegal immigration inflating rental prices!  If you buy you are stuck and if you rent you get ripped off.

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What are you supposed to do?  Some folks rent AND buy.  They have a mortgage on a mobile home and pay rent for the lot.  It is twice as expensive that way, if not more, but not at the beginning.  They get sucked in like a car buyer, with a lower monthly payment.  Even if they buy the land for it rather than rent, most areas are so overcrowded that land costs are artificially high.  They won’t pay as high house maintenance costs at least, because very soon a mobile home is underwater in value so you just redneck repair.

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I’ll continue tomorrow on this. 

( .Y. )

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