That's certainly a hot take for renting.

Yes, you "gotta have somewhere to live" so why would you not take advantage and build equity? The likelihood that you buy at peak market is unlikely, that's scared risk adverse talk. Assuming a negative and downward movement is equally silly, when it's more likely to stagnate or show slight movement towards appreciating. The idea that omg I'm gonna be stuck in this house and not be able to get out of it, is what keeps people from buying, and they end up regretting it when the market shows increase.

Ultimately we're talking about putting yourself on a path to owning something scott-free, or renting it out and having the monthly cash flow at your disposable. Writing off RE and home ownership as a poor investment is lol, when if you do it right can put you in a fantastic spot financially. If for some reason you're projecting a downward trend in your specific case then by all means RENT, but to just blanket write off RE because of upkeep costs is ignoring big picture and equity when the market sits idle.

Renting for life you better have a hell of a monthly income coming in when you're 70. Which brings up another point, of what are rental prices going to be? Since they're variable and subject to increases each and every year, you could be looking at paying significantly more a month than if you had bought something with a 30 year fixed years ago.

Freedom. Are you really free? You're most likely locked into a 12 month lease agreement that you can't break till your lease up date. And, what does having the ability to walk away at that specific time gain you exactly? Plugging in your perfect negative scenario, maybe you gained some ground on rental prices, and now you get the fun experience of moving.

The idea that you are less free because you own a home is very off the mark. It can be rented at almost any time. It can be sold at almost any time with the exception of the first 2 years and barring a catastrophic collapse right after you buy at absolute peak market.

You have some valid points in regards to some hidden costs with home improvement and upkeep, but most of those are optional and varies widely depending on the condition and type of property you purchased. For instance, if you purchased a highly upgraded 2 bedroom condo in pristine condition in a gated complex with an hoa you're going to be doing next to nothing as far as anything is concerned. On the other hand, if you bought some fixer upper Ranch property with over an acre of landscaping, then ya you're going to have some work to do and it's going to cost you. But, that's all something you should have factored into your purchase decision and should net you a price reduction to balance it out. There are some unexpected things that happen like a water heater goes out or something, but again if you know you're purchasing a house with an old water heater that might need to get replaced at some point then you know that going in. Point is, it's not going to somehow validate that you should have rented instead of purchased, when it doesn't even happen that often. Most of the things that get done are because of the owner's personal taste or they like things a certain way whatever.

I will say that if there is a large gap between renting vs. buying where it would be significantly cheaper to rent, then by all means rent. But, if you plan to stay in the same spot for years on end and the difference is nominal then you're indeed lighting your money on fire, with no return on anything.

You apparently aren't good at reading. There were just two studies linked showing depreciation for structures.

I guess "silly" and "truth" mean the same thing now. Or we have a bunch of people who don't have the faintest ****ing clue posting on the internet exhibiting high levels of Dunning Kruger. 50/50 I guess.

I agree with your conclusion. My overarching point is that you need to evaluate these on a case by case basis with a pro forma. Some of your comments range from fabricated to dumb to nonsense. (eg appreciation, lack of a termination clause in lease, needing income at 70) So I can't really address most of the specific concerns since the bulk are outright falsehoods or illogical and have no rebuttal based in fact.

However, you raise an excellent point that a mortgage locks you in for a long term price. Many areas have rent controls that do a similar thing. There is another thread where someone is locked into a rent controlled apt. Many people who are married with children and have a stable career would be fine to buy a home in vast swaths of the US. But arguing against that strawman for a single guy with a timeframe of < 10 years who wants to pay down the entire mortgage in < 5 years is just absurd.

It's not a case of asserting "the housing market is overpriced therefore I shall wait". It's merely a case of "renting and investing my savings in equities is more attractive on a risk adjusted basis than taking a highly leveraged position in housing".

Naturally, this assessment will change should house prices fall but note that, at no point was judgement passed on the efficiency of the housing market.

This thread seemed pretty productive. Cleared up a mistake that many people were so deeply convinced of they even posted ridiculous personal attacks and white knighted each other. Although, over the past few days I thought of another way that people could understand how structures would become less valuable.

I don't know if many of you have been in older homes (100y or even 50y) that have not had extensive remodeling, but many suffer from rather major layout issues. Linen cabinets and storage in general is a major issue as kitchens and people in general have more junk to store. For those of you in Europe, en suite bathrooms are becoming more popular in multi bedroom (or even single bedroom luxury dwellings). These type of taste and preference change across time also contribute to the decrease in the value of existing structures. And obviously technology improving.

Anyway, there is really no rational explanation for why people think structures appreciate in value except that it is the most nefarious of survivorship bias coupled with wisdom of ancients.

A study specific to Herengracht shows that, in the extreme long run, house prices tend to increase roughly at the rate of inflation:

http://digitalarchive.maastrichtuniv...0717764/ASSET1

Once you factor in the cost of maintaining the house- repairs, insurance, re-modifications etc- this return is approximately nullified.

To sum it up in one word- stupidity.
Real estate investors claim that it's the land (not the house) that appreciates in value. This is true but it only increases by inflation in the very long run.

Right, no one ever makes money in Real Estate because it is a depreciating asset.

So you should rent from all these stupid people who own these houses/apartments/buildings and are inevitably going to go broke. What a bunch of suckers.

Wow at people ignoring an asset class because of pre judgemental bull****. If you found a rental property that offered 50% ROA before appreciation then only a mad man would ignore it.

Now this is quite an example but I have found rental properties generating cash flows to owner in excess of market indexes. And even if you only come slightly close you should consider buying it.

1. Free float that can be invested in the market in form of deposits
2. Free float that can be invested in the market in form of deferred taxes
3. Free float that can be invested in the market in form of deferred expenses
4. Diversification into another asset class is insane (You can have higher margin in your broker account if you have a good deal with the bank/You can transfer money across if needed)
5. You have insane leverage that does not get a margin call and you can use it to refill on stocks
6. I agree that property appreciation is overstated at current times. But remember, there are many faces of real estate. Dare I name one?. Many real estate investments are valued at what cash flow you are able to produce, and if you are really good at generating those, then you are golden.

Also, you are screwing yourself over. You currently posses a job. Lets say it pays 50000$ after taxes. That job is very similar to a bond, and if you think of it as a bond giving you 5%/year then your job is worth 50000/0.05 = 1000000$ (not factoring in growth). Now this job is extremely valuable and can certainly be considered an asset. And it should be utilized.. sadly, your broker does not give a **** about your job. He only cares about what is in your account. But a bank does. So... stop screwing yourself over and use it

Three logical fallacies wrapped in one? Impressive.

Please try again.

Buy now. new tax on forein buyers in vancouver means they gonna look elsehwere. They probably gonna look at seattle and toronto. If it is near seattle then I would buy.

Buying a home is a terrible idea right now. 99% of people are invested in stocks, bonds, and real estate which is all completely propped up by cheap money and is going to collapse.

Buy gold and silver wait for housing market to crash and burn and metals to skyrocket then buy a home for an ounce of gold like some people in Venezuela are able to do who had the foresight to get some gold and silver.

Housing is so overvalued and the prices are just fantasy and is going to collapse. I mean home prices got crushed in the 08 bubble and the bubble we are in right now is way bigger than 08.

You were doing half good until the gold/silver line.

Are you suggesting that the economy in Venezuela is representative of the world at large?

Wow what a thread... my 2cents I think you should invest in what you know.

OPs brother clearly doesn't understand real estate and it's leverage. He has no idea what he's doing. Either he educates himself and buy or he rents, because buying a home with no knowledge will bite him in the ass.

If you overpay for a property because of emotions/no knowledge of market/irrational fear the consequences can destroy your wealth, while if you overpay when you rent you can just move out next year.

Who has ever gone wrong owning gold and silver going back thousands of years??? Literally ever human born going back thousands of years has valued gold. Just because you and all Americans were brainwashed into fiat doesn't mean that you are right....just look around you man....fiat currencies are all currently exploding all over the world.

The dollar value of gold is irrelevant. It isn't like gold and silver all of a sudden gained value when America was born and the dollar was created.

You have 99% of the country invested in over inflated real estate, stocks, and bonds all propped up by cheap money............and you have less than 1% of the population actively buying gold and silver (in America). Yet... China, Russia, India, and even central banks are all accumulating gold and silver with ever increasingly worthless fiat at a record clip. So who is right? The 99% sheep all invested in an overinflated stock and housing market who are all going to lose their ***es. Or the less than 1% who have their wealth in actual real money and all these far east countries accumulating gold like its going out of style?

Just because the stupid corrupt govt doesn't recognize gold as money doesn't mean that it isn't money.

Gold and especially silver...as assets are phenomenally undervalued, and housing/ stock market are both phenomenally overvalued. I think a median priced American home is equal to about 8,000 ounces of silver right now, which is just absolutely ridiculous and complete fantasy. When the pendulum swings on these out of whack ratios you are going to be able to pick up a home for a couple hundred ounces of silver (4k today priced in fiat) or an ounce of gold......which is what you can buy a home for in Venezuela right now.

I'll leave you with a few quotes.

"Gold is money and nothing else is." - JP Morgan (testimony to congress 1913)

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." -----Debt meaning our debt instrument fraud currency.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value." - Alan Greenspan

Right now? No.

But the world is swimming in debt and the Fed can't even raise interest rates 1/4th of 1 single lousy point and have had rates suppressed at 0% for nearly a decade. You thought the bubble in 08 was bad? When this next bubble pops the collapse 08 is going to be like a summer vacation at Disneyland in comparison.

And what is going to be one of the few things to hold its value and be revalued much higher in the coming collapse? Gold and silver.

My advice is stay get the hell out of real estate, wait for things to collapse and you will be able to buy tons of real estate with relatively small amounts of gold and silver.

This exact debate, like word for word, has been done to death in BFI. Convert all your money into gold/silver and report back to us in 2-3 years on how you did. Beyond that I simply wish you well. I wouldn't do it.

I just discovered zillow's bulk excel data which is probably helpful if you know what to look for. http://www.zillow.com/research/data/

I don't know what to look for because I don't know enough about real estate analysis. I did an extremely basic analysis of ZHVI Summary by Zip Code. The dataset includes information from 13,000 zip codes including the "PeakMonth" and "PeakQuarter".

I simplified it and found the number of instances of PeakYear for all zip codes. The results are as follows:

• 2016- 3993
• 2006- 3516
• 2007- 2122
• 2005- 957
• 2008- 685
• 2015- 476
• 2009- 452
• 2010- 273
• 2014- 158
• 2004- 91
• 2013- 76
• 2011- 74
• 2012- 65
• 2003- 41
• 2002- 10
• 1996- 8
• 2001- 4
• 2000- 4
• 1997- 1
• 1998- 1

wow another 30 post gold bug, shocker

Please explain how you are smarter than the market.

You are competing against the consensus of a lot of smart and hard-working people.

CUZ SHEEP. AND GOLD.

I don't know, I think pretty insane that the market still thinks the Fed has credibility. It has been pretty obvious that the Fed has been bluffing about raising rates for the past 2 years+. Maybe a lot of those smart people you talk about are benefitting from all the cheap money.

Bush and company inflated the last bubble with 1% interest rates, and Obama and company have been doing the exact same thing as Bush but on an even grander scale with 0% interest rates and QE infinity. I mean 2008 wasn't that long ago and none of the structural economic imbalances have been fixed, and are even worse now than before 2008.

I think it is pretty obvious that one of the few things of value that will be left standing when this next enormous bubble bursts is gold and silver.

Again, the dollar value of gold is irrelevant. Literally does not matter. Like I said, gold and silver didn't all of a sudden gain value when America and the dollar was born. It is impossible to lose with gold and silver. Doesn't matter if the dollar price of gold goes back down to $250/oz or if it goes to 10k/oz.

In fact, I would love it if gold went back down to $250/oz, that would mean our government actually got our fiscal house in order. I'd rather have a sane government not inflating away all our wealth.

Despite the fact that you would not convert into gold and silver, I am interested in your thoughts on this line of reasoning above.

"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head" - Warren Buffett

We can all play the quote game.

The Illuminati elite constantly disparage gold to mislead the riffraff while loading up on it themselves.

Soros is a kingpin and he took more than half of his exposure out of the stock market and threw it into gold and Barricks gold.

Think about it, you think a man who has made his fortune in the stock market wants people parking their money in gold instead of the stock market?

China ( a communist country) has been sponsoring to its citizenry since 09 to get into silver and gold. Meanwhile our crooked politicians don't DARE tell the sheeple to protect themselves by converting fraud fiat into real money. Instead they promote us to keep investing in the overlyinflated rigged stock market. Our politicians think we are dumb, and the sad part is they are right.

You don't think Buffet has a lot of gold? He has a lot, trust me.