Renting and reinvesting the savings from renting, will outperform owning and building equity

[dora_da_destroyer]

does that thing say $589 in maintenance every month

shyt,I missed that

 

[CBalla]

You spend the whole time saying if people dont know x, they shouldnt talk about x. I ask you for information about x and you give me abc and say “fukk I need to educate you for.” Dont pretend you didnt come like that.

You mean the demographics that are knee deep in investing and pioneer a bunch of the stuff we are discussing? Reddit is full of cacs right? They all over this topic. On youtube as well. That talkin point is tired, Dora.

You cant grasp a basic concept of the fact that “a house is an investment”.

You need to log off and read a damn book. Stop looking for a free education on a damn sports forum.

 

[CBalla]

shyt,I missed that

I mean Im flabbergasted at the things Im seeing in this thread

 

[dora_da_destroyer]

You mean the demographics that are knee deep in investing and pioneer a bunch of the stuff we are discussing? Reddit is full of cacs right? They all over this topic. On youtube as well. That talkin point is tired, Dora.

I don’t even know what you’re trying to say here, I’m speaking to those who keep making it seem like folks should forgo owning...if you think those demographics would give the same advice to “their community” you’re tripping

 

[Fat Fred Jones]

Men lie. Women lie. Numbers don't.

I modified the infamous Buy vs Buy Calculator and made Hannah's monthly expenses as 16.6% less than Morgan's based on the average difference between buying vs. renting costs nationwide historically. I kept their monthly budgets the same and took Hannah's down payment and put it in the S&P500 from the onset. After their monthly expenses, the rest was invested in the S&P500. The 2019 net worth formula is the sum of the home value and the S&P500.

If Hannah didn't take her savings and invest them in the S&P, only reinvesting her dividends, her net worth would be $471,863.73. That's more than Morgan's home value.

Because this was used to compare fixed mortgage costs, the math here doesn't account for the annual escalating rental costs. Morgan's mortgage payment is fixed for 30 years. Hannah's rent will at least rise with inflation; in 30 years, her rent payment will double. (ballpark - a US dollar's value is reduced by half every 30 years). Also, this comparison, along with many others, always assume that the maintenance funds that a home buyer sets aside each month will just sit idle, when this money can also be parked somewhere to earn interest or even used more aggressively in the stock market.

 

[At30wecashout]

I don’t even know what you’re trying to say here, I’m speaking to those who keep making it seem like folks should forgo owning...if you think those demographics would give the same advice to “their community” you’re tripping

Forgoing owning *if* one is investing isnt a bad idea. A home is an investment in a lot more than financial returns, which means people cannot look at it the same way as a lot of other investments. Op brought up investing in stock rather than putting the projected difference in housing, and while they can be used to achieve the same thing (financial freedom) they have very different ways of going about it and often produce different results.

 

[At30wecashout]

You cant grasp a basic concept of the fact that “a house is an investment”.

You need to log off and read a damn book. Stop looking for a free education on a damn sports forum.

Bruh stop. This is what im talking about. I literally study this in my free time because its about time I do (school aint shyt). I asked what the expectations of this investment is and you havent given me an answer. Stop assuming I am stupid. If you dont want to answer, that is fine, but I wanted to get to the root of why anyone would treat a home as anything other than a place to live that may or may not make a financial return down the line vs investing in something that actually makes a more immediate if not initially small return.

 

[CBalla]

Bruh stop. This is what im talking about. I literally study this in my free time because its about time I do (school aint shyt). I asked what the expectations of this investment is and you havent given me an answer. Stop assuming I am stupid. If you dont want to answer, that is fine, but I wanted to get to the root of why anyone would treat a home as anything other than a place to live that may or may not make a financial return down the line vs investing in something that actually makes a more immediate if not initially small return.

If you study it in your free time then you should have known from the jump that a house is an investment.

Study harder.

 

[dora_da_destroyer]

Forgoing owning *if* one is investing isnt a bad idea. A home is an investment in a lot more than financial returns, which means people cannot look at it the same way as a lot of other investments. Op brought up investing in stock rather than putting the projected difference in housing, and while they can be used to achieve the same thing (financial freedom) they have very different ways of going about it and often produce different results.

This conversations has moved way past that, this thread is full of people doing mental olympics around the idea of owning a home

 

[the bossman]

Hilariously bad take. Housing is a long term investment. Only way you lost in the 2007 “crash” is if you were trying to sell during that brief period.

And I put the word crash in quotes because if you look at the data I linked about the median house prices over the years you’ll see that the “crash” in the housing market was not nearly the same magnitude as the hit stocks took during that time.

Thousands of black households followed your absolute foolproof advice of buying real estate as athe best means of growing wealth. Many lost half their net worth and STILL haven't recovered a decade later. What's your advice for them? They've lost over 40% of their net worth and Still underwater on their mortgages with home values that still haven't recovered

Owning Real Estate Has Not Panned Out for Many African-Americans

Overall, however, since 2000 black homeowners are far more likely to have experienced declining home values than other homeowners.

One reason for the disparity is that many black homeowners lost out on the housing boom of the mid-2000s. Between 2005 and 2007, as skyrocketing home values pumped up the wealth of many white homeowners, many black homeowners lost ground, according to the Johns Hopkins study. On average, first-time homebuyers with low to moderate incomes gained 50 percent in net worth between 2005 and 2007 if they were white, but lost almost 50 percent if they were black.

And when the housing bubble burst and the Great Recession began, black homeowners were hit harder than whites, in large part because predatory lenders had steered many of them into sub-prime mortgages.

 

[CBalla]

Thousands of black households followed your absolute foolproof advice of buying real estate as athe best means of growing wealth. Many lost half their net worth and STILL haven't recovered a decade later. What's your advice for them? They've lost over 40% of their net worth and Still underwater on their mortgages with home values that still haven't recovered

Owning Real Estate Has Not Panned Out for Many African-Americans

What part of many assets can gain and lose value in the short term do you not get?

Do you understand that MANY assets lost value in 08?

Do you not understand that there are a larger number of black people who didnt buy their homes in between 2005-2007 than those that did?

God its amateur hour in here

 

[the bossman]

What part of many assets can gain and lose value in the short term do you not get?

Do you understand that MANY assets lost value in 08?

Do you not understand that there are a larger number of black people who didnt buy their homes in between 2005-2007 than those that did?

God its amateur hour in here

Got it. So for all those black families who are still financially wrecked from following your absolute foolproof advice, it's basically "yall shouldn't have bought then. You'll b aight"

 

[dora_da_destroyer]

Thousands of black households followed your absolute foolproof advice of buying real estate as athe best means of growing wealth. Many lost half their net worth and STILL haven't recovered a decade later. What's your advice for them? They've lost over 40% of their net worth and Still underwater on their mortgages with home values that still haven't recovered

Owning Real Estate Has Not Panned Out for Many African-Americans

Some of this gets further into the intricacies of both the types of mortgages people had and where they were buying - including the legacy of redlining.

This graphic makes the point, places with the biggest declines are also places that are declining overall - either people leaving the area entirely or industry and people moving back into the core of the city thus suburbs values decline, areas that are economically depressed, or the fact that the poverty and crime in inner cities is being pushed to suburbs - even their example of a more affluent suburb is one on the south side of Chicago and there’s a lot of talk from chicagoans on how those suburbs have declined due to people from the south side of the actual city moving in and jobs moving to the north and west suburbs.

But this overall is why I don’t think the advice anyone is giving is simply to buy anything, anywhere, you need to be strategic. That’s what I hate most for black folks out here, they sold out on their homes so quick in the mid 90’s- early 00’s for McMansions 20-40 miles from job centers and those are the homes that lost the most value and have recovered slower. Location is still always your #1 consideration when buying real estate.

I’d also like to see how that article arrived at people doing better renting, maybe in the areas where things declined, but rapidly rising rents have led to displacement, loss of shelter and homelessness in growth cities, it seems like the tale of coastal cities and those of declining Midwest cities are canceling one another out.

 

[CBalla]

Got it. So for all those black families who are still financially wrecked from following your absolute foolproof advice, it's basically "yall shouldn't have bought then. You'll b aight"

Im not sure if you understand the sentence so let me say it again.
“Real estate in the short term may go up or down in value”.

Do you understand what that means, or are you too slow to understand that over a long period of time, real estate appreciates in value?

You’ve got to be ignorant to not understand that
a.folks of all colors that bought stocks in 05-07 got wrecked as well
b.folks of all colors got wrecked on the value of their homes in during ‘08.


Anyone who can only take quotes from a clickbait article without truly understanding the dynamics of what really happened in ‘08 isnt worthy of a sentence more from me.

 

[At30wecashout]

This conversations has moved way past that, this thread is full of people doing mental olympics around the idea of owning a home

Oh well yea, I cant account for that, but hey, its the coli.