Ep. 345 | Homeownership vs. Renting
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- Опубликовано: 20 июл 2024
- The Minimalists discuss the pros and cons of owning versus renting homes from a minimalist perspective. Watch “Maximal” episodes of The Minimalists Private Podcast exclusively at Patreon: / theminimalists
Questions answered in this episode:
00:00 What are your perspectives regarding owning versus renting homes?
10:37 Is there an age deadline for homeownership?
14:24 How do we determine which is more financially feasible for us between renting and buying?
24:47 What are “Zoomtowns”?
32:34 Do you consider tiny homes a viable homeownership option, particularly regarding resale value?
37:47 What should we look for in a community when we’re ready to plant roots?
45:30 Listener comments and minimalism tips.
#TheMinimalists
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Have you decided to rent or own? Why?
Own. Working towards not having a payment for living. Although I know I have to pay taxes and insurance, but at least when I sell it I can "make" something back on it.
I prefer owning. I don't like paying someone else's mortgage. I also like having something to show for all my payments when I sell my home. Also in the 8 years I've owned my home, it's appreciated a lot.
Own, because it is so much less to pay a mortgage than to pay rent. You can pace fixing many things. Yeah you really shouldn't be selling so fast though. I live in an area where it is likely to crash. Aka the houses are not that expensive.
In my country, owning is sky high ,so renting and saving for future home 🏠♥️thanks minimalist
After moving 11 times in 13 years and since rental prices skyrocketed, we love to eventually live in our own tiny house. I love the stability and the freedom of forming our own garden, making renovations for ourselves, and keeping all kinds of animals without asking for anybody's permission. Renting is a good option if you don't know where you want to live or if you like the constantly changing environment.
Having a PAID home gives u a sense of financial security. If job loss or illness, or COVID, rent or mortgage payment is one thing u don’t have to worry about. You have a roof over your head!!
Our property tax for our house is 1400$ a year and 1000$ for insurance for the year, advantages of living in the mid west 😀
Taxes and insurance 🤮
@@SoulforSale our taxes and insurance are 2500 per year for 3 bed 2 bath 2 car garage house. Perks of living in the mid west😀
@@rowddyone3570 I pay $500 a year in New England but I am a minimalist
@@SoulforSale us too, im a stay at home wife we got no debt. No need to work.❤️
The challenge with rent is that it continues to go up. I am grateful that we rent a small place from a very nice couple who has only raised the rent once in our 5-year tenure, but outside of that my experience has been an annual increase in rent that always outpaced any salary increase. With home ownership, at least the cost isn't constantly raised (as long as you have a fixed-rate mortgage).
I used to be a staunch rent-only person but as I get older the idea of owning a small piece of property is incredibly appealing. Too bad we are still stuck with mostly extra-large homes from the last three decades of construction. Newer homes built in the SF Bay Area maximize the square footage on the plot, whereas, I prefer to have green/outdoor space (without the neighboring two-story home staring straight down into it) and a smaller home. I choose to stay here as I have family here and a great job (albeit, not a $$$ tech job). Unfortunately, the post-pandemic housing market is insane in the Bay Area, so I doubt we will buy anytime soon.
I cannot think of anything scarier than renting when I'm elderly. That's why I'm busting a gut to pay off a mortgage. Imagine being 75, no longer working and being at the mercy of the landlord. Suddenly being told to move and trying to find somewhere new . No way, that is a complete nightmare to me.
Exactly - that's why, at the age of 50, we are buying our first home. 19 year mortgage but when we re-mortgage in 5 years hope to knock some years off. We could not have done it without inheriting the deposit but it was the best use of that money so we have somewhere secure in our retirement.
You're right. Renting puts you at the mercy of both the landlord and rental increases, AND the biggest idiot in the building who leaves a cigarette burning in a planter or something. I also don't like the lack of privacy.
Why should your aga matter?
@@johnyang1420 Income limitations. Physical ability limitations. Anxiety at having to move at a vulnerable age. There are a myriad of reasons.
If I hadn't bought my house fifteen years ago I wouldn't be able to afford to work four days a week.
In reality even if I still worked full time i could barely afford to rent this house on my own. Buying it and prioritising paying it off has given me immense freedom. Conversely the house I chose was, within my very small budget, an emotional choice: other houses in my town have gone up in value more within the time and I've also made maintenance choices (beautiful timber windows rather than much cheaper uPVC) because I want to live in a place I love, even if it's not adding the financial value I'm paying for the additions.
With children owning a home brings stability and a choice to live in a desirable school district. After 22 years of homeownership, we rented for 8 miserable months, apartment living was not for us. Paid cash for current home = piece of mind.
i've owned twice - the first i did gain a bit of money at sale but that project spending every waking minute building that house and tools, and materials, etc. probably cost us our marriage, the 2nd property was post-divorce and parameters were imposed (location, price, size) so i compromised .. and when i sold i lost about 100k .. i am now an emotionally happy and single renter ! LOL
Cannot help but think of M&M's whenever I see your new emblem on each of your microphones
Where I live, our mortgage is half the price of a one room apartment, so it’s a no brained for us to own. And I think our daughter and 2 dogs are happier to have the yard. If it was just me, I’d rent. If I could afford it.
To the host of the show. Credit reports are really owner ledgers. They keep track of the businesses that own you. Credit scores are reward points for staying in debt with your owners. Once you reach $0 you own yourself. Login to your online credit report and look at your mortgage balance. You are one mortgage balance away from owning yourself.
Our rent was raised $300 then $200, then $800 each year.... the "freedom" comes with a lack of control over the big variables. A broken pipe MIGHT be "their problem" ...but when they dont fix it for 2 months...it STILL is your problem. Find a place you can hunker down for 4-6 years. make sure your WHOLE payment (hoa, pmi, etc) is lower than your rent and ur fine. We were renting for 2600. Our mortgage alone was 1850 which gave us Hella wiggle room for the "other costs" when rent goes up, we stay sturdy.
Thank you, Ryan, for stating:
"It's not what your neighbor can do for you; but, what you can do for your neighbor."
This is something we all need to ask ourselves in every aspect of our lives; not just as it concerns what we can bring to a relationship, neighborhood; but, our jobs and community as well.
Professor Shawn. I’m 60 and buying my first home. I want a place for retirement where I can kayak, road bike, mountain bike, hike and chill.
Trying to understand why Ran and Joshua moved to the LA area. A podcast could be recorded almost anywhere - an enviable position to be in. Interviews could be conducted online without the need for guests to be in the studio. It seems moving to the LA area would put anyone back financially, not to mention the taxes.
I honestly wondered the same thing.
Some people just enjoy the city :]
I wondered the same thing, in that you couldn't pay me, a multitude in millions, to live there. ...but, I'm allergic to the bright sun and "fun" California offers. Give me a cold, gray rainy day anytime!!! ...and, the four seasons.
It comes down to this, though:
everyone's dreams are different. ...and, they clearly thought about it for a long time, as they spent years touring cities. There must be something there that was an attraction. Maybe that very sun-fun thing. Maybe to reach broader audiences by using various talent agencies.
Who knows.
Each to their own!
I wondered too. Josh mentioned access. They wanted ocean and mountains. That requires a coast. East or west? They chose west for certain reasons. He may give them later. It does sound like they landed in a good place.
California is beautiful and has the best weather in the country . I wouldn’t live in LA County tho .
My 1100 sq ft home was paid off in 2014. There is NO PLACE that I would be able to rent for the $1500 annual property tax bill I pay. I agree with Ryan...when I do a project I like to ask, "What is the cuss word factor rating for this project?" The worst thing about home ownership is finding a good handyman - I finally have a GREAT handyman who does awesome work for a fair price.
I absolutely love change! We move a lot. I have a degree in architectural engineering and I absolutely love buying a house that needs fixed up. Unfortunately my husband is the one that has to do the work and he doesn't really like to anymore lol so I promised him we're done. But if I could work for a place that buys houses... I love it 😍. It's art to me! The vision, bringing life back. The last home we made a lot of money off of doing this! It was well worth it lol. Our goal is to be completely debt-free including our mortgage so it helped make the current mortgage a lot smaller!
There are businesses that buy fixer-upper and sell them for "profit" - you could look into that.
If your partner is doing most of the work in renovating and does not really like it; it's nice to have a discussion about goals & values together.
If you move a lot - then renting will ALWAYS be cheaper than buying and that's a hard-fact. There are places that offer month-to-month rentals which are perfect for people in your situation.
The thing you are missing about hone ownership is that the end goal is to have a home without a mortgage one day.
A landlord can just terminate your lease with 30 days notice, forcing you to move, and being at the mercy of the rising rent prices.
Owning your home helps fix your expenses and allow you to retire earlier. A landlord can jack up rent. But owning a home in a state with reasonable or no property taxes is residential security in old age.
I'm glad you have made an episode on this because I am also interested in your views. In my country (Hungary) many people don't buy a home because it is out of the question. For many of us renting is the only way. I can put aside money, but it'll take me about 10 years to raise enough to be able to get a loan and obviously prices will have increased even further by that time. And I must mention that I don't earn the minimum wage (approx. 370€/month).
My wife and I rented in Florida for 10 years. We saved a lot of money which served us very well. Until our 2022 lease renewal was jacked up by $688.00 each month. That was January. We decided to GET OUT! Bought a new build in Texas double the size of the Florida apartment. Our rent was $2,630.00 at that time. My mortgage is $2,566.00. As a dig, I pay more towards principal, so my monthly payment is the same as my former rent. Principal payment each month is $500.00 now. By getting OUT of Florida, my salary in a comparable job rose by $30K. It also just so happens to be a MUCH BETTER company that wants to pay bonuses provided I hit my marks. My Florida company wanted everyone to hit their marks but then said "it has been a difficult year" 3 YEARS IN A ROW! Never got any more that $1,700.00 in my Florida bonus. My 6-month tenured Texas bonus was $10,500.00. Bought the house for $352K. Balance after one year is $310K. We put down $33K.
Anyway, we all have options. Exercise them and you may just get lucky.
All my wealth is due to Real Estate… Own 100% vs renting! Only sell your properties if you absolutely have to and of course don’t sell when the market it’s down… Keeping them as a rental instead of selling is a great tool to build wealth. I own homes not only here in the US, but also in South America… Trust me I never lost a penny and I never fixed a water heater (You can always hire). If you have tenants, in the end they’ll be paying the home for you. 😊
Paying off the house instantly turns your monthly mortgage payment into a monthly return in your bank account for the rest of your life.
Great podcast! That price-rent ratio is super helpful. I'm curious why y'all didn't consider housing cooperatives? They require a lot less work than a traditional house yet protect you from the wayward renting market. Because the property taxes are shared, they tend to be a lot lower. The cooperative often covers a lot of maintenance, like a renting situation would. Only downside is that they don't appreciate like traditional real estate.
Love this perspective! My wife and I just sold our 2 homes and built a brand new one. We plan to live in a rv in the next 10 years! The reason we are not doing it now is due to the custody arrangement with my ex wife. Home “ownership” was an investment for us and we don’t have any debt other than a fix rate Mortgage. We hope when we sell in the next 10 years we will have around $600k or so to be able to live in an rv. Hopefully my question when you came in slc sparked this conversation! Loved seeing you guys again though we couldn’t hug this time
Great talk! Thank you 😊 for us a condo fits are lifestyle but Ramsey way. Fully paid cause owing money is very stressful.
I'd love to know if Joshua's neighbours with the "Simplify" sign out front already knew who Joshua was? And if they did, how stoked they would've been having the ultimate simplifier moving in next door! 😄
Home ownership is often overated. People are fed up. Some are even looking into living in RVs and vans.
Hey John! Some RVs can cost as much as a house. Whether your home has wheels or not, owning your home can bring peace of mind.
@@kolitiokada9825 Well….its better to buy used. I like Roadtrek Class B. But my dream rv is Embassy RV at about $145k. Its like a rolling studio apartment. Im in LA. You cant buy a condo in LA for $145k….so its a good deal!
We currently rent. A 3 bedroom apartment in a decent safe neighborhood. We could buy but the homeless with their squatter rights and everything about them terrifies me.
Home ownership can also give you options. We have an old period style house on a huge block within a small city, an hour outside of a major city. Our mortgage is alot cheaper than what we could ever rent in this area & our house value has increased by almost 600% in the past 10 years. Being on a huge block gives us future options to downsize to a tiny (or atleast smaller) home with no bills on the same property while renting out our big house if we chose to, meaning more flexibility to travel for extended periods of time but still having a home base. We have also discussed with our tween/teen kids the importance & perks of living a minimal lifestyle & to be discerning when it comes to debt in the future, which can then afford them to also have tiny (or even studio apartment style) homes on our property (if they choose) to then give them the freedom to travel or whatever it is that they may wish to do with their lives. The increase in house prices is going to make it so much harder for our kids generation to break into the market, if they even wanted to. It's just another way of also giving them future options that we wish we would have had starting out! 😃
Great watching I rent home ownership has its ups and downs and renting does too but you don't have to fix a rental if something breaks but whatever works for each person
Currently paying $1,360 for a small 2 bedroom apartment so it’s definitely a goal to buy a house soon cause to me we’re just throwing away money while making someone else rich(the apartment building owners)plus there’s so many rules here…we have 2 young kids & having to keep them quiet is annoying…they don’t have a yard to play in & they share a room & a girl & boy sharing a room isn’t ideal for me…
I guess I would want to know about the reasons for buying a house. Not just because I can afford it. It seems like so many people are buying houses now, in order to make money selling them. But what is going to happen when the bubble bursts, again? They are going to be holding on to a home that is going to cost them, not make them any profit. I would be very interested in your take on this phenomenon.
Being in So Cal, it is not possible to buy a house with 15 yr mortgage unless you make 6 or more figures. Out of peer pressure by sisters, I bought a house in 2010 for $350K and might as well be a million dollar house. I knew nothing of fixing it; I didn't even know what a drill bit was but I have learnt so much in 12 years. I did a lot of work myself with blood, sweat, and tears. I refinanced many times - which may be counterintuitive because I will never pay this fully but here we are in 2022 with rent sky high, salary increase has been stagnant for me for the last 15 years, and owning a home is what saved me financially. If I was renting, I would have to share a place with someone to afford it because it is not possible to rent an apartment on my own. With this house if I was financially strapped, I can either rent it out (rooms or the entire house) and rent a room somewhere, or sell it and move out of state. In reality, living in USA - we will always pay something. Either mortgage/property taxes or rent. This is a lifetime slavery that's been set up by our politicians. Choose your poison.
Live in an RV
@@johnyang1420 good luck finding a place. My friend did it for almost 10 yrs. Lots of work maintaining the RV, moving in/out every 6 months due to loitering laws. They finally gave in and bought a house in Florida. Im too young to retire and old for that. Btw, RV park rental per month is more expensive than my mortgage.
Boondock, stealth camp. Plenty of people who don’t have any choices are doing it.
It depends on where you are in life and what your plans for the future are. Whereas I was initially opposed to home ownership and being financially tied to a mortgage, I now see it as an investment. House prices tend to rise instead of fall. I grew up in Germany where if you bought a house, it would stay within the family for generations. Typically, grandparents live downstairs and the younger generations upstairs. I'm not sure how things are now. Buying a house, knowing that it will be home for future generations, seemed to be a sensible choice decades ago. Nowadays, you need rich parents or grandparents to even put down a deposit. We need alternative housing solutions which don't cost the world and only take up the required space and not more. Many of us tend to buy bigger properties instead of downsizing. Being faced with the empty rooms in our old home on the day of our move, I realised how much unused space there was.
Fort Wayne!! Very good and less expensive place to live.
After my husband died I decided to move back to my hometown of Missoula. By the time I made the move it was the week before they locked down, so I've been impacted by the zoomtown inflation and lack of rental availability here. While not as bad as Bozeman (AKA Boz Angeles) the rental prices are insane, that is IF you can find a vacancy (last summer there was only 1 apt vacant for a couple of months and it was a dump). There was no way I could buy a conventional home as they were just starting to reach the level of homes in the metro area I moved from. (High housing prices was one of the reasons I wanted to move to begin with). Tiny houses were out (disabled so can't sleep in a loft), plus where do you put one? I wound up ordering a small 2bd/2ba mobile home and got the order in just as those prices started to climb due to material shortages. Even so, it was just slightly more than getting a tiny house. I put 30% down on a 20yr mortgage. Being on Social Security, I needed to keep my payments low and since I financed it thru a local credit union my interest rate is 6.5% (about what a 30yr fixed conventional mortgage is now). I found a lot to rent in a park out in the county about 9mi out of town. My combined mortgage payment (including property tax and ins) and lot rent are HALF what I could get a smaller 2bd/1ba apartment for in town. Plus I have a small yard where I'm planning on putting in a raised bed garden. It was the most practical solution I could come up with to fit my needs.
Side note: To give you an idea how bad the rental situation is here: When I was closing on the new mobile home the title services agent told me that she and her SO were moving OUT of Missoula and going back east someplace (where the SO had family). They had just been given a no-cause eviction notice on the apt they had been renting for over 7yrs (always paid rent on time and were quiet, responsible tenants). They couldn't find another place to rent, even tho they both had good paying jobs (the SO worked construction) and good rental history. It's pricing blue-collar and service industry workers out of the market. It can be seen in big box stores like Home Depot, etc, which are now chronically understaffed to the point that they are paying $17-21/hr for new hires.
The best way is to build your own small house. You can have your mobility, because you can rent out your own house, and rent another one in the other place. But when you are old, and have a low pension, you will be able to live in your small house, and you won't be spending a lot of money on bills.
I don’t want to rent. I don’t enjoy owning either! It’s nuts.
I feel there's less freedom in renting. You have to be locked and loaded into a lease. When you buy a home, you can put it up for sale whenever. I've only had issues selling one home and that was when the market was bad, but it's still sold. Our last home sold in 5 days....
Not if you're paying month to month
You can pay 2-3 months of rent to get out of a lease (its more likely to be a month). As compared to selling a home:
- You have to wait for a buyer as you said in a bad market (which is 4 out of 5 years, this kind of market happens once/twice every decade)
- You have closing costs associated with the house (way less than the 1/2/3 months rent)
- You can get out of a lease right now if you wanted
- Not every house sells in 5 days (again market conditions)
We have rented for the past few years as the flexibility to move easily was useful. However, we have now bought our "forever home" and will have paid the mortgage off before we retire. The worry of paying an expensive rent at the time our incomes will have fallen is not something we looked forward to. Our retirement will be rent and mortgage free.
Please come to Portland would love to see you guys 😍
I don't think there is much between the 2 choices. In the U.K there are now lifetime mortgage options , so you can be in debt all of your working life and beyond , also a " help to buy " scheme , which enables you to borrow money from the government, which you have to pay back within 5 years if you don't it you have to pay it back with interest on top of your mortgage ( this can be up to £ 30,000 ) it's a joke really, no young person can afford mortgage payments as the deposit is well beyond what they can realistically save up ( min deposit £20,000 ) for a small 2 bed house .
Great points but regarding the cities where buying is cheaper than renting; Detroit (MI) has the 2nd highest crime rate per 100,000 people. If someone is planning to buy a home solely on the Price-Rent ratio; that could be a big factor to consider otherwise.
Part of the reason is the exodus out of Detroit by autoworkers and the trickle down effect closing those factories had on the local economy. Many homes and other properties were abandoned. The population of Detroit dropped from 1.8million in the 50s down to 700K today.
I bought my first (& current) home in 2008. It was a foreclosure & is a small house in a "poorer" neighborhood. My mortgage payment is quite a bit lower than what I paid in rent back in 2008, & rent has only gotten higher. I'm in San Diego County, btw.
Mortgage vs Renters: Renters know they're renting ... people with mortgages do not.
I would prefer to own, however we don’t have the 20% down payment, we don’t have money for the emergencies that will surely come with owning and we want something very small with outdoor space and not in a city… so I guess we’ll have to be content with renting. Also, the prices of homes and property taxes are not reasonable in our area of Pennsylvania. We have discussed moving out of state, but that’s very complicated also.
Just curious, did Joshua say he has NOT lived with his wife for 7 years? Since they met? 7:07. I’m curious as I like this idea, but how do they manage it.
I was thinking he said that too. How have they've done that with a daughter?
If it’s short term rent - if it’s long term purchase
So adorable… Ryan if you ever leave I am coming with you
Shawn Too would be a good idea ;)
Despite attempts (and there are small successful pockets) Detroit is not yet back to being a place people want to live. WIth housing prices being so low selling becomes difficult. I think it's actually a place where renting is a better idea than purchasing.
Professor Shawn!!
Age is just a number keep an open mind and that will keep you going
I have lived in the Midwest (KC) forever and believe me, you don't want to live in the neighborhood where a house is $135K. In 2000, maybe, even right after the 2008 crash. But not in 2021.
For me, renting for 12 years was the biggest waste of money.
Professor Shawn 😎
Mathematical Fact: A mortgage will never make financial "cents."
Professor!!!
Professor Sean
Professor Shaun
Shawn² (Shawn squared)
Minimalist retirement planning - I can't seem to find anything on the net about this.
Mathematical Fact: It only takes 1 day to buy a house, not years.
My vote goes to the name Professor Shawn.
Don't forget that you should have renters insurance so take that cost into account.
It literally costs $10/mo; as compared to PMI which could be anywhere from .58% onwards of the home value which would be at least 10 times more than renters'
@@amitmahapatra881 yea. I don't have PMI though, but I do have insurance on my home in the event of other things. PMI is if you don't put down 20%
Mortgage payment - mortgage balance = A LARGE NEGATIVE NUMBER! Now ask yourself, "why do I believe I'm a homeowner though it's not mathematically true?"
I would like see new house@
Shawn ▪︎ squared
New Shawn...sounds like a rapper name😆
Professor Shawn (or Sean or however it's spelled). Let the name stand on its own rather than in relation to someone else.
Other Shawn or professor Shawn
Mathematical Fact: Homeowners don't have mortgage payments.
professor
I think it's easier for certain demographics to sit back and feel more comfortable in certain neighborhoods than others. Personally, if I had a neighbor put up anti-LGBTQIA+ paraphernalia, I wouldn't really want to be overly neighborly with them. I wouldn't go out of my way to be cruel, but they wouldn't seem to be the kind of neighbors I'd want to be friends with. And before everyone comes with the whole "it could be a teaching moment," please consider the fact that people from diverse backgrounds are often the ones asked to step up and teach others, and most of us are tired of having to explain why we should be free to coexist with bigotry.
Shawn 2.0 (Shawn two point oh)
Mathematical Fact: A mortgage cannot buy a house.
Good episode, EXCEPT…. they absolutely lost me at “it doesn’t matter what your neighbors’ politics are.” That is an incredibly tone deaf, privileged position, as prosperous white males. If you are a member of a minority community who is often discriminated against, it absolutely matters. If one of those people looks at a home in a Trump/MAGA neighborhood, you can bet they are going to feel unsafe. People’s politics reflect their personal values. It’s incredibly elitist to claim that one’s politics has nothing to do with who they are as a person.
For example, I am Jewish, and my Jewish relatives (my cousin and his wife) recently moved from a very diverse, liberal area in Southern CA to a suburb of Austin, TX that they told me is very right wing, flag-waving conservatives. His wife wanted to attach a mezuzah on the doorframe, reflecting her cultural heritage, and my cousin advised against it, as it might attract negative attention and could even be dangerous.
It would likely be similar if they were a Muslim Arab, Korean, or even Black family, or LGBTQIA. There are places where members of those communities would definitely feel unsafe based on the politics of their neighbors.
Shaun of the Dead???