Do you think renting is dead money?

Marguerite Tonery

Well, the banks aren't giving out mortgages, so dead money or not, alot of people are forced into the situation of having to rent instead of buying.

Benny_Cake

melekalikimaka wrote: »

very poor judgement, greed more than anything else if you ask me

I could only see it as being in any way greedy if they were just buying in order to flip it to someone the following year in order to make a quick buck. As Dudess said, there were a lot of people just wanting to have a home and borrowing what they thought was a reasonable amount. They may have shown some poor judgement but that property bubble lasted a very long time, and people do need places to live, especially if they have kids.

melekalikimaka

Dudess wrote: »

A couple who wanted to start a family during the "boom" buying a modest three-bed semi-d in a "middle-of-the-road" area and both in permanent jobs, for instance? How is that greedy?

There's too much chucking people like the above into the same category as people who took the complete piss - it's not one bit fair.

with the house prices clearly over inflated and mortgage offers many times more than feasable long term... greedy. houses during the 'boom' were over priced. Holding back was the smart thing to do until prices came down, it was a bubble, and it was going to burst, if I was going to take that risk I would have done my research, many didnt and are suffering now.

Lars1916

Lars1916 wrote: »

Never mind...there is that saying in Germany, that you have to move with your job, so renting always was the one and only option for me.

And renting is much more convenient anyway, because of maintenance and stuff like that.

I suspect that many Germans save throughout their working lives and buy a house shortly before retiring.

One of the greatest errors of the Celtic tiger years has been the "morgagus Maximus" syndrome, where people are allowed to get the biggest possible mortgage for a basic house. This alone has restricted the ability of many to save for their retirement, we will soon see a lot of poorer pensioners stuck in oversized houses that they can't afford to heat etc.

amacachi

Dudess wrote: »

A couple who wanted to start a family during the "boom" buying a modest three-bed semi-d in a "middle-of-the-road" area and both in permanent jobs, for instance? How is that greedy?

There's too much chucking people like the above into the same category as people who took the complete piss - it's not one bit fair.

It was stupid in many cases. It may have been "middle of the road" but it was in the "middle of the road" in a bubble. Add to that the introductory rate mortgages, there was no sense in getting one of those unless you knew that you'd struggle with payments yet they were hugely popular.

KyussBishop

From my very surface-thin impression of the housing market in Ireland (please correct my, probably numerous, misperceptions), and the financial/legal system surrounding it etc., this seems a very difficult country to look for becoming a homeowner.

Houses are excessively expensive, mortgages seem extremely unfavorable, and those who are being raped by the banks through ill-chosen pre-recession mortgages/house-prices, are held at gunpoint by the banks because bankruptcy laws in this country would ruin them.

So yes, I can see why renting is a more manageable choice for many people, and that's fair enough, but some people don't have a choice in it, and I don't think it should be that way.
I think the hostile housing market here puts very unfair financial restrictions on people like that, leaving lots of people unable to do anything other than rent, and get stuck in a so-called 'poverty trap' (a bit of a dramatic phrase, but not all that far off), where they are forced to spend their money on rent rather than on actually buying a place.


Fair enough with people renting as a lifestyle choice, I can see the benefits people are mentioning and it makes sense at certain points in peoples lives, particularly for college and the like, but does it not make sense to move on to a mortgage or home-ownership eventually though?

I mean, sure you have to pay off a mortgage over 15-30 years, but you do own something in the end, and achieve some financial security from that in the form of a valuable asset (even though there are risks e.g. in needing to meet payments).
If you are renting for life though, won't you be spending more in the end, and also not achieve that level of financial security later on once you reach retirement? (you'd still be paying rent, and would need quite a sum of savings/pension-funds just to live on; and look at how peoples pensions today have been robbed/decimated, you can't depend on that)

Dudess

People were in full-time employment, they budgeted accordingly - there's always a bit of a gamble involved, no matter what the conditions. I just feel sympathy for people with mortgages who are in trouble now - don't see why they should only be deserving of scorn. Even ones who really took the piss deserve the heckling to come to an end at some point if they don't play the victim card like A.O.R. - they're more than paying for their mistake now.

Not right to point and laugh at those who have fallen on hard times - and it's always happened due to financial misjudgements, boom or no boom.

Micky Dolenz

Lars1916 wrote: »

So my OH is 'old'? With 37 years of age?

Hee hee, you sleep with an old person :P. Granny/Gran Dad lover :pac:

Tigger

Crasp wrote: »

Flatmate owns our college apartment. charges me and a 3rd flatmate 300 per month. (say 600 total).

So I lose 300 per month and at the end of the 5 years of college have lost 18,000. (I think? sounds like a lot).


my flatmate buys apartment, uses our rent to pay his mortgage installments.
at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even. I'm down 18,000.


that's why rent is dead money!

He won't break even he will lose and probably more than 18 k

Duckjob

I suppose it made some some sense when the property prices were charging skyward, but the opposite is true now.

You can't really get more "dead money" than interest paid servicing a hefty mortgage on an asset that's rapidly declining in value.

Dave!

My folks still hold this opinion... pretty nuts if you ask me. Getting yourself 300k in debt < having the freedom to move on whenever you want.

If you've got a family, career, etc., and you're setting up shop for the long-haul, then yeah I can see where they're coming from. You might as well have something that you own 30+ years down the line. But for anyone else, renting is the smart option.

Gambling with a life-long debt of 300k is not my style...

Silentcorner

melekalikimaka wrote: »

with the house prices clearly over inflated and mortgage offers many times more than feasable long term... greedy. houses during the 'boom' were over priced. Holding back was the smart thing to do until prices came down, it was a bubble, and it was going to burst, if I was going to take that risk I would have done my research, many didnt and are suffering now.

You sound like a genius, some people however simply couldn't afford to buy their own home, it was only clear they were over inflated after they began to drop ( otherwise there would be no such thing as property bubbles ), and never before has global property prices been affected simultanously, no amount of research would have helped, this was a global property bubble spanning 14 years, it wasn't based on greed it was based on cheap unsustaineable credit, in a wider far more complex global financial system, personal circumstances dictate a persons motives for buying, and time will tell whether it was a good or bad decision, but the money "invested" in rent is gone never to be seen again......greed is a ridiculous argument ( is it greedy to start a pension? same principal is it not?) ....I admire your stones tho holding out like that, people like you should be running major corporations!!!!

Posy

I suppose it's different in some countries, where there are better rent controls.

My family lived in rented accommodation during my childhood and we had to move several times when the various landlords decided to sell up/renovate the property/give the house to a son or daughter or whatever the reason. It is very unsettling for a family to rent in this country, at least from my experience. It might be easier for a young couple or single person.
It might be better if there were more rules, like not being able to put the rent up or double it at their whim. Or if people could rent and get a five or ten year lease.

Besides, if you rent, when you reach 65-70, you still have to pay your rent every month. If you own your property, you're not left paying high rent on a pension, plus you have an inheritance to leave your family when you die.

Plus, if it's a house, you can renovate/extend/upgrade the property, you can't even paint the walls a different colour in most rented accommodation!

Eric Cartman

At the moment Im renting, and will probably keep renting unless I magically get 100-200 grand , the problem isnt that I cant afford a house , I just cant afford a house where I want one , I could probably afford a 3 bed semi out in the wilds of west meath somewhere or easily afford an apartment in portlaoise , but once it comes to living within 10 minutes drive of the M50 south of the toll bridge - renting is all i can afford, ill probably just save a lot of money and buy somewhere cheap in teh country when im 50-60 and dont need to be next to everything anymore

Johro

Soylent Green is PEOPLE!!

steve9859

I own, and glad I do, even though I am in some negative equity. I rent the place out now, as I have moved somewhere else (which I rent).

Renting in theory is fine, but until there are continental style protections for tenants, it is not in my view a good long term option. I want to have the certaintly of having my own unencumbered place to live when I am elderly, without having to rely on the whim of a landlord. There are advantages to renting, obviously, but people should have the opportunity to decide what their priorities are. Freedom of movement against security later in life

I havent bought to make a load of money. I can rent the place out if I want to move elsewhere. But most importantly when I am older I have a guaranteed place to live for free (except for property taxes)

Posy

steve9859 wrote: »

Renting in theory is fine, but until there are continental style protections for tenants, it is not in my view a good long term option. I want to have the certaintly of having my own unencumbered place to live when I am elderly, without having to rely on the whim of a landlord. There are advantages to renting, obviously, but people should have the opportunity to decide what their priorities are. Freedom of movement against security later in life

This is what gets me- the uncertainty. Never knowing at the start of the year if you will have to move or stay put. I imagine it's not fun if you have a family to try and pack up.

previous user

I know a guy who is sharing an apartment with a mate and paying less for a mortgage than paying for rent each month.

Silentcorner

Eric Cartman wrote: »

At the moment Im renting, and will probably keep renting unless I magically get 100-200 grand , the problem isnt that I cant afford a house , I just cant afford a house where I want one , I could probably afford a 3 bed semi out in the wilds of west meath somewhere or easily afford an apartment in portlaoise , but once it comes to living within 10 minutes drive of the M50 south of the toll bridge - renting is all i can afford, ill probably just save a lot of money and buy somewhere cheap in teh country when im 50-60 and dont need to be next to everything anymore

You and those like you should be helped by the state ( assuming homeowners are also helped ) even it means banks owning a percentage of the home.

The problem we have at the moment we have gone from one madness ("My house is now worth" when in actual fact it was worth nothing until you sold and did not buy, as your new home would also have increased) to another madness ( "only muppets buy property" laughing at people who have) Neither are correct, coming from someone who has both rented and puchased I can honestly say I feel far more settled in my own home, even if my house is worth half what I paid for it on the day I pay my last repayment, what do I care I don't have to pay rent from that day on.


Adult age 21 to 82 ( average lifespan )

3.6k per annum on rent = 220k ( for a room in a house )
9.6k per annum on rent = 585,600 ( for a three bedroom house )
12k on mortgage over 35yrs = 420,000 ( for a three bedroom house )

Not an exact outline but merely a guide

Plus you own the asset what ever its worth....not greed just simple sums.

Dudess

Dudess wrote: »

Really? Why stop at renting then? Why not apply the "dead money" logic to any essential/life-improving service?

I don't understand the above mind-set - accommodation is provided by someone else who owns it, therefore they have to be paid. If it's too expensive or the accommodation is sub-standard, well ok, that's not worth paying for, but if it's what you're looking for and you're happy there, what's "dead money" about that if the alternative is not affordable?

You can tell I agree!!!
http://www.boards.ie/vbulletin/showpost.php?p=70087842&postcount=10

but yeah, the 'dead money' was just a property boom line, it's stupid

niallers1

I think the biggest arguement against renting forever is the one about what happens when you retire..

Most people will not have a big enough pension or any pension for that matter to pay their rent so will probably have to move away or to a dodgy neighbourhood where the rent is reasonable..

State pension is approx: 230 per week.

What type of place will you get after your other bills and living expenses are paid?

Now,maybe 30 per cent of people will have a decent pension and will not be affected but the majority I suspect will not have a decent pension.

Mike 1972

One advantage of renting is that if one loses their job tomorrow they have greater possibilities to find work in other parts of the country (or abroad) they are less tied down.

Its also far easier to move into something more modest until they get back on their feet

Logical Fallacy

Dudess wrote: »

Really? Why stop at renting then? Why not apply the "dead money" logic to any essential/life-improving service?

I don't understand the above mind-set - accommodation is provided by someone else who owns it, therefore they have to be paid. If it's too expensive or the accommodation is sub-standard, well ok, that's not worth paying for, but if it's what you're looking for and you're happy there, what's "dead money" about that if the alternative is not affordable?

This was simply used by morons back in the boom days to continually try and drive house sales, prices up and infer they had done something amazing by buying a property.

I'm renting my nice apartment for ****all, while all those chumps are telling their kids their won't be icecream or Barney on TV because they gotta make cut backs to meet there mortgage payments.

Who's laughing now?

jam_mac_jam

Its amazing that people, after all that have gone on are still arguing or saying this, that anybody with a straight face would say rent is dead money, yeah and a soft landing and also they arent making more land you know, oh pensions and shares have gone down in the past few years clearly you have to own a house or you will die lonely eating dog food in your old age. Sweet jesus would somebody please tell the Germans, they clearly are going about this whole renting and saving thing all wrong. Look at the state of their country and how great ours is.

****ing Irish people and the land, jesus. Rent if you want to rent buy if you want to buy but please, please stop critising people who rent.

niallers1

"Who's laughing now.."

Why would you even say something like that?

If people are making hard cut backs then they're obvioulsy going through difficult times..

Why would you laugh at somebody going through a difficult time..

jam_mac_jam

niallers1 wrote: »

"Who's laughing now.."

Why would you even say something like that?

If people are making hard cut backs then they're obvioulsy going through difficult times..

Why would you laugh at somebody going through a difficult time..

You would say it because you had to listen to years of ****e about how you were a failure if you didnt buy a ****y duplex in athlone and drive to Dublin every day, clearly you were jealous. I find it very hard not to think whos laughing how after the years of trying to explain to people why I wanted to spend a grand less a month to live in the area that I do by renting, and I dont live in a great area. Everyone who rented was made to feel like they missed the boat, however some of us didnt and choose not to buy.

Logical Fallacy

niallers1 wrote: »

"Who's laughing now.."

Why would you even say something like that?

If people are making hard cut backs then they're obvioulsy going through difficult times..

Why would you laugh at somebody going through a difficult time..

Hmmmm.....I would strongly suggest you learn the general vibe of AH versus other forums on Boards.ie

Upon occasion, may-haps after a few brandies or, should the summer breeze be carrying the heady smell of fresh cut grass, a sherry...people occasionally post in here in a facetious manner.

niallers1

Jam mc Jam-..You obviously came across alot of nasty people then..Most people I know don't make people feel like that..

Silentcorner

jam_mac_jam wrote: »

Its amazing that people, after all that have gone on are still arguing or saying this, that anybody with a straight face would say rent is dead money, yeah and a soft landing and also they arent making more land you know, oh pensions and shares have gone down in the past few years clearly you have to own a house or you will die lonely eating dog food in your old age. Sweet jesus would somebody please tell the Germans, they clearly are going about this whole renting and saving thing all wrong. Look at the state of their country and how great ours is.

****ing Irish people and the land, jesus. Rent if you want to rent buy if you want to buy but please, please stop critising people who rent.

Eh correct me if I'm wrong but this is a thread about how wrong it is that renting should be perceived as dead money, which as a result led to people who are renting, let's be honest, gloat at people who bought....there are consequnces to both but a person should be as informed as possible as to those consequnces....

jam_mac_jam

Silentcorner wrote: »

Eh correct me if I'm wrong but this is a thread about how wrong it is that renting should be perceived as dead money, which as a result led to people who are renting, let's be honest, gloat at people who bought....there are consequnces to both but a person should be as informed as possible as to those consequnces....

And my comment is that I am amazed there are such people. That is all.

jam_mac_jam

niallers1 wrote: »

Jam mc Jam-..You obviously came across alot of nasty people then..Most people I know don't make people feel like that..

Yeah, that's it, didnt go on in Irealnd at all, just happens that people I know are evil.

Greentopia

niallers1 wrote: »

I think the biggest arguement against renting forever is the one about what happens when you retire..

Most people will not have a big enough pension or any pension for that matter to pay their rent so will probably have to move away or to a dodgy neighbourhood where the rent is reasonable..

State pension is approx: 230 per week.

What type of place will you get after your other bills and living expenses are paid?

Now,maybe 30 per cent of people will have a decent pension and will not be affected but the majority I suspect will not have a decent pension.

The "what happens when you retire" argument would be one reason I would want to own my own place in my old age, though you might be eligible for some social welfare aid if you're only on a state pension, I'm not certain.

I'm renting and have been all my life and am happy enough with it though I'd prefer to own my own home for various reasons (none of which have to do with seeing it as an investment), but I know at least I'll have my own place with the garden I've always wanted to grow my own veg. when I'm old and I inherit my Mum's house.

I'll have a small pension from my time spent working in another country and I expect to work well into old age as I'm self-employed and I love my work, so that and the state pension should do me as I live quite simply and self-sufficiently and my living expenses are manageable, aside from rent at present.

Dudess

Posy, I agree renting when you've a family must suck - not because I think it's dead money but because of all the hassle and instability.

Lawrence1895

Micky Dolenz wrote: »

Hee hee, you sleep with an old person :P. Granny/Gran Dad lover :pac:

I'm older than her :pac:

Anyway, some years ago, there were lots of Germans who bought a house at the retirement age from their savings. But their number is on the decrease, so I heard.

Mike 1972

Dudess wrote: »

Posy, I agree renting when you've a family must suck.

Its the norm in a lot of countries where the rental market is properly regulated.

imitation

Clearly the demographic on boards is leaning towards renters, but at the end of the day a mortgage will always be an attractive option when its close or in some cases the same cost as renting a house, which seems to be often the case in Ireland.

Its easy to gloat in hindsight, especially if you were feeling uneasy at the cost of your own rent during the boom while other people effectively paid the same for a mortgage.

JohnMarston

Whats the point in buying a house when there is plenty of rented accommodation available? I can't take my house with me when im dead, short of burning it to the ground :pac:

sollar

Renting suits some people and mortgages suit others. Neither can claim that the other is necessarily a bad idea.

For every fool that mortgaged their lives away there is someone who took out a mortgage on a house 10 or 15 years years ago, sold at the right time and is now living happily mortgage free. Plenty more like myself are not in negative equity and have a mortgage that is less than the cost of renting a similar place.

faw1tytowers

Before I had a family I was happy to rent and move around. My houses/apartments were always top notch and well priced. It worked for me.

Once I had a family I knew the pros and cons of renting, dealing with private landlords to agents. Knowing my rights etc.

Now I have a family I have found the house I believe to suit our needs. But to be honest if we had money to burn we may of bought, but thankfully not because if we choose to extend our family I would want a bigger place now..

So I am glad to rent. I dont see it as losing money. I am paying a good rate for a brand new home. No mortgage to worry about and all repairs or issues dealt with promptly by my landlord. In a well maintained estate with decent enough neighbours who keep to themselves at most.

I have painted the house the way I want (paint paid by landlord) everything in house is as I would want, but in a few years I will probably want different. I am used to moving about. And if I had a mortgage I couldnt do that.

There are different types of people who suit different needs. One day I would like to buy I am sure but for now I am a happy renter.

Saila

the ONLY reason I can see for BUYING a house is if you a)want to have kids, and b) keep them in the same environment so they can have the same base set of friends before they grow up. Am I missing something?

Hookah

Saila wrote: »

the ONLY reason I can see for BUYING a house is if you a)want to have kids, and b) keep them in the same environment so they can have the same base set of friends before they grow up. Am I missing something?

Use the money you would have rented with to buy a property (at a reasonable price of course) to leave to your kids when you pass on, or, to give another example, to have something to fall back on when you reach a pensionable age.

Ally Dick

Renting off Fred West is dead money

The Left Hand Of God

Dudess wrote: »

People were in full-time employment, they budgeted accordingly - there's always a bit of a gamble involved, no matter what the conditions. I just feel sympathy for people with mortgages who are in trouble now - don't see why they should only be deserving of scorn. Even ones who really took the piss deserve the heckling to come to an end at some point if they don't play the victim card like A.O.R. - they're more than paying for their mistake now.

Not right to point and laugh at those who have fallen on hard times - and it's always happened due to financial misjudgements, boom or no boom.

"They budgeted accordingly"

Really?

I bought a house in Dublin in 2000 and I thought I was getting raped due to the price and the way the estate agents operated. {EDIT I had lived in England for 8 years previously}

I only bought due to "special financial" circumstances.

People who bought over priced houses need to man up and live with their lot tbh. I don't think they are deserving of scorn or anything like that but nor do I think they need pity.

One aspect of the boom is people were detached from reality and mollycoddled.

Cat Melodeon

We're about to move house and are looking at renting a lovely 4-bed house on half an acre in a rural but serviced area of Co. Limerick about 15 mins from work. The rent is €650 and there is no limit on the term on the lease, so it's stable too. If we wanted to buy in the same area, house prices for the equivalent property are still above €400k and in the event of unemployment we'd be stuck in Co. Limerick, probably needing to commute to Dublin or Cork for work, probably unable to sell, and if we were, we'd be stung by taxes and fees on the sale. Few jobs in this country are for life (the concept of a job for life depresses me in any case) so anyone who buys a property takes a risk on getting stuck.

I'm happy enough for now paying small enough rent for a lovely property. We're able to save at that level and should have a decent deposit built up if we ever do decide to buy, as well as being able to put a bit into the pension pot. It suits us, I don't consider it dead money, I don't think anyone really does these days, unless they've personally done well out of their own house purchase.

Celly Smunt

Hookah wrote: »

Use the money you would have rented with to buy a property (at a reasonable price of course) to leave to your kids when you pass on, or, to give another example, to have something to fall back on when you reach a pensionable age.

lol you must not be living in Ireland

Guy:Incognito

chin_grin wrote: »

Tell that to all those in negative equity. :pac:

Negative equity means nothing unless your selling your house.

The people renting properties to all the renters seem to think owning is a good idea.

Sonnenblumen

Micky Dolenz wrote: »

It's an old saying for old people.

We all need to live somewhere. I bought a house in 09 for a friction of what they wanted and my mortgage is still higher then if I was renting the exact same house. With renting is great freedom, no maintenance worries and you can feck off when you feel like it.

+ 1, on the money there. Renting usually means more mobility, more money to spend on other items and probably a more enjoyable lifestyle.

The alternative is become a hamster and take your chances on the wheel of debt.

Celly Smunt

Guy:Incognito wrote: »

Negative equity means nothing unless your selling your house.

still dead money.

Guy:Incognito

Deleted User wrote: »

It's a phrase churned out by people who see housing as an asset rather than shelter, by that it means that after paying the mortgage (easily 2x the "price" of the house) it's yours to sell. Rent on the other hand is spent with no chance of any return.

Most people who promote "rent is dead money" hope to gain somewhere from the property market.

When a renter is 65 and retired they still have to keep paying rent, right up till they die or cant look after themselves anymore.

A buyer owns the house and doesnt have this quite expensive bill every month anymore coming out of their pension (which could very well be just a state pension of circa €220 a week.

Guy:Incognito

pmcmahon wrote: »

still dead money.

It'll always be worth soemthing. You can never recover any of the rent money paid.