Another point of view

fret_wimp2

Ok, its based on the perspective of someone in the US market, & its James Altucher who is a little "different" from most people in his thought process, but i still found his point of view quite interesting and some of it made sense to me, particularly the whole "you need to own a house, its what we do" portion of it.

make of it what you will:


https://www.linkedin.com/pulse/financial-fridays-its-suicide-own-house-james-altucher?trk=hp-feed-article-title-publish

seamus

His thinking isn't really anything revolutionary tbh, but he's coming at from a dollar-signs-on-everything perspective. And also from what is clearly the position of someone who is privileged enough to have $2,500/month to spend renting. Where the landlord keeps the house and the grounds nice and who's in it for the investment and won't turf you out because their daughter has decided to come home, and you don't really mind upping sticks and moving your whole family across the country anyway.

Get him to spend that same $2,000 a month renting a small house where you have to contact the landlord 3 times to get anything fixed, and he hmms and haws about whether it's his problem or your problem and about holding onto your deposit. And every few months he hints that he might be selling it and "might need you out by Christmas", but then changes his mind.

Give him the sh1tty unprivileged kind of rental market that the majority of people have to deal with and he might get a better understanding of the intangible things which you can't put a dollar sign on, which drive people towards owning their own home.

The article is heavily US-centric though. It's very difficult to map any of his points to the property market in Ireland, e.g. :

You can find roots with a good landlord. You can even paint the house and knock down walls and do whatever you want.

Lol. Best of luck finding that in Ireland.

fret_wimp2

seamus wrote: »

Lol. Best of luck finding that in Ireland.

my last 3 landlords were fantastic. Wont be knocking walls i admit, but very flexible on everything else. Maybe i have just been really lucky.

seamus

fret_wimp2 wrote: »

my last 3 landlords were fantastic. Wont be knocking walls i admit, but very flexible on everything else. Maybe i have just been really lucky.

I suspect the number of decent landlords actually heavily outweighs the number of bad ones. And that people who seem to continually find themselves with "bad" landlords, probably need to look in the mirror to find out why they're so unlucky.

But that said, the home is such a fundamental part of one's own identity that just one bad landlord experience can permanently taint the whole image of renting.

Cuddlesworth

fret_wimp2 wrote: »

my last 3 landlords were fantastic. Wont be knocking walls i admit, but very flexible on everything else. Maybe i have just been really lucky.

6 landlords over 10 years.

An elderly couple that kept the mother's house for renting after she died. No money spent, same furnishing, single glazed windows, everything close to falling apart but lovely to deal with.

One was very professional in one sense, running multiple apartments. But very unreasonable when managing multiple tenants in regards complaints, for example moving in a couple who held nightly partys in the rear shared garden with upwards of 10 participants until late in the morning. Or where parking was limited to 1 space per apartment but wasn't willing to engage the tenant with 4 cars.

One was a shyster, who tried to retain the deposit after leaving and rented the apartment with a lot of problems(which he knew about). Not far off a slum landlord. All about the money, trying to avoid taxes and expenditure of any kind.

The last three were basically absentee landlords. As long as money was dropped into the account they were uncontactable. One didn't notice there was no money paid for 6 months from a flatmate. In another case, I spoke to the landlord twice, once to sign the lease and the second after two weeks of trying to give notice of leaving.

Gandhi

seamus wrote: »

His thinking isn't really anything revolutionary tbh, but he's coming at from a dollar-signs-on-everything perspective. And also from what is clearly the position of someone who is privileged enough to have $2,500/month to spend renting. Where the landlord keeps the house and the grounds nice and who's in it for the investment and won't turf you out because their daughter has decided to come home, and you don't really mind upping sticks and moving your whole family across the country anyway.

Get him to spend that same $2,000 a month renting a small house where you have to contact the landlord 3 times to get anything fixed, and he hmms and haws about whether it's his problem or your problem and about holding onto your deposit. And every few months he hints that he might be selling it and "might need you out by Christmas", but then changes his mind.

Give him the sh1tty unprivileged kind of rental market that the majority of people have to deal with and he might get a better understanding of the intangible things which you can't put a dollar sign on, which drive people towards owning their own home.

The article is heavily US-centric though. It's very difficult to map any of his points to the property market in Ireland, e.g. :
Lol. Best of luck finding that in Ireland.

Even from a US point of view that article is rubbish. Some of his (many) problems are:

Assuming your rent will never increase ever. The landlord will handle tax increases and maintenance with money that dropped out of the sky.
Landlords will let you knock down walls? What? Only if you sign a contract that when you leave, you will knock down your walls and put new ones back where the old ones were. Most likely not even then.
How do you find a drain snake in Home Depot? Maybe head for the big sign that says "Plumbing" and from there to the smaller sign that says "Drain Snakes"? Like I do. Or anyone with a brain does.
How will he know who to call to paint his house or pave his driveway? How did he know where to buy his car? Or get his hair cut? Or get groceries?

The irony is that he says people buy a house and then try to justify to themselves that it was a great idea. That is exactly what he is doing.

On the upside, he is assuming a mortgage interest rate almost double the one I have on my house, and a rental yield that is barely half what I get for my rental property, which makes me think I should be the one writing financial articles for LinkedIn.

newacc2015

seamus wrote: »

I suspect the number of decent landlords actually heavily outweighs the number of bad ones. And that people who seem to continually find themselves with "bad" landlords, probably need to look in the mirror to find out why they're so unlucky.

But that said, the home is such a fundamental part of one's own identity that just one bad landlord experience can permanently taint the whole image of renting.

You dont hear that more Landlord bring tenants to the PRTB, than tenants bring Landlords to the PRTB. But the media wont highlight Irish tenants are a nightmare. Germans expect everything in a house to be working perfectly. But they dont call themselves "grand tenants" because their rents was only a few days late everything month like Irish people. Irish tenants dont seem to understand house rules like no candles(massive fire risk) and no smoking are not suggestions, but rules

This article is pretty poor IMO. He fails to take into account inflation erodes interest and principle on a mortgage. If you have an interest rate of 10% on a loan and the inflation rate is 10%. The real interest rate is 0%. Likewise the real burden of a 1 million mortgage will be 900k after a year. Although 10% inflation is extreme. You can expect some inflation to reduce the rate of interest. He doesnt take this into account in his article.

IMO this article lacks even the most basic financial knowledge.

TimeToShine

It seems to be a generational thing more so than anything - baby boomers think that owning a house is the cornerstone of an adult's life and fundamental to raising a family. Generation Y kids are fed the "renting is dead" lark by their parents and a lot of them agree either of their own volition or without even realising it.

Those who do not agree are of a similar mindset to the OP. The truth is that with such a wide variety of work options available worldwide nowadays as well as opportunities for long term travel buying a house before you're a bit older or completely content with your place in life can be construed as rather hasty. Renting in your 20's and 30's is absolutely not dead money in any way - it affords you a freedom that you can only truly appreciate once you've signed that mortgage contract. Now the converse is also applicable in that renting is erratic and dodgy but in general LLs in this country are not a bad bunch. Owning a house is probably the end game for the vast majority of people in this country, the only thing I would question is why the big rush to get there?

riclad

I think the problem is there,s a lot of people working ,paying 1200 rent per month,
so its difficult to save a deposit to buy a house,
even though in theory a mortgage would cost 1000 euro per month.
So they may be stuck paying rent even though they would prefer to buy
a house .
Every city /state in the usa is different,
in some places the rent is cheaper than getting a mortgage in that area.
There,s a wide range of prices for a 3bed house in america.