patrick.net

bgamall4 says

CaptainShuddup says

I could rent my place and make $600 to $800 a month.

And it would be trashed.

What you're saying is that all renters would trash their rental when they left?

retire59 says

We did not buy based on Patrick's website advice as our jobs kept us in the SFBA. Rent was much less than buying as the houses are way overpriced in SFBA. So we saved and lived in small apartment and no debt. Then we retired before 60, moved to an area where home mortgage is the same as rent, again using Patricks rent vs own calculator, and are very happy owning. It is not an investment, but we all need a place to live. In this case we are getting the best for our money and able to retire and enjoy whatever time we have left. And we hated renting, but our jobs were in SF and renting was smart...I agree and thank you Patrick!!

It's interesting that both you and Patrick made a mistake of not buying in the Bay Area and now claiming you're happy. Had you bought in the Bay Area, you would have been much more happy.

Btw, I was able to retire at 36 years of age thanks to owning several handful of properties in the Bay Area. My investment partner retired at 40 years of age in Brazil right now. There's a price to pay when you're making wrong choices. :0)

thunderlips11 says

Are you free to pack up and move without having to swing both a mortgage and a rental payment?

Because of this thinking, I love my renters. One of them just moved out after 2.5 years living at our place. We raised their rent only 3% 1 time during this period. They left the place spotless. We raised the rent another 17% and got it rented immediately to another young couple. Gotta love real estate in the Bay Area.

http://www.latimes.com/business/la-fi-retirement-savings-bankrate-20140818-story.html

Why my house is a terrible investment? Yep, it's a terrible investment. Why own when you can rent and be mobile? After all, real estate in the Bay Area only doubles itself every 10 or 15 years.

Had one bought in the last 2-5 years, some of the properties had more than doubled themselves. But then again, who cares about appreciation and all of these equities. Renting is better, and it gives mobility.

Renters rule. LOL!!!

Here's the thing ... buy a home in the countryside, much cheaper than the bubble cities & their bubble 'burbs. Consult/contract among the various cities, up/down the coastline, renting a studio or a room in someone else's home, while paying off the mortgage.

In the end, you have a place for retirement because you don't want to be a renter during those golden years with variable & increasing monthly costs. Plus, you can then tap the equity in the home for emergencies (and such) but of course, that's a final option if things go awry.

The whole problem with buying in high cost areas is that if one loses that job, all hell can break loose, esp given the fact that re-locating for work is becoming more often these days.

http://www.nbcnews.com/business/real-estate/affordable-homes-frozen-underwater-many-americans-n109906

http://www.nbcnews.com/business/real-estate/nation-renters-fewer-americans-now-own-their-own-homes-n167776

E-man says

Had one bought in the last 2-5 years, some of the properties had more than doubled themselves.

Which great if you want to sell. Not so great if you're looking to raise a family in that house. Moving every 2-5 years isn't supposed to be the point of buying a house.

E-man says

My investment partner retired at 40 years of age in Brazil right now.

Retiring in Brazil is not a strategy that interests everyone.

FunTime says

E-man says

Had one bought in the last 2-5 years, some of the properties had more than doubled themselves.

Which great if you want to sell. Not so great if you're looking to raise a family in that house. Moving every 2-5 years isn't supposed to be the point of buying a house.

Why sell? You can tap 80% of that equity tax free if you want. That's even a better deal than selling and paying the taxes and transaction costs.

FunTime says

E-man says

My investment partner retired at 40 years of age in Brazil right now.

Retiring in Brazil is not a strategy that interests everyone.

Works for him. Had he not invested in real estate, he would have been looking for a JOB in Brazil.

FREEDOM BABY.

Rin says

Here's the thing ... buy a home in the countryside, much cheaper than the bubble cities & their bubble 'burbs. Consult/contract among the various cities, up/down the coastline, renting a studio or a room in someone else's home, while paying off the mortgage.

In the end, you have a place for retirement because you don't want to be a renter during those golden years with variable & increasing monthly costs. Plus, you can then tap the equity in the home for emergencies (and such) but of course, that's a final option if things go awry.

The whole problem with buying in high cost areas is that if one loses that job, all hell can break loose, esp given the fact that re-locating for work is becoming more often these days.

Now you know why you need a wife? Helps you qualify for a loan. You can't do that with Montreal Hookers. If one of you loses a job you might still be able to manage. The idea is to buy in the Bay Area, wait for it to triple, and finally retire in Vegas or Hawaii.

E-man says

Why sell? You can tap 80% of that equity tax free if you want.

If you bought a house that more than doubled itself in the last 2-5 years and are just tapping 80% of the equity that isn't much money. In other words, those houses are barely in the SFBA and cost much less than SFBA houses. I'm not seeing anything close to doubling except occasional massive remodels sold in prime areas to newly made millionaires. Good luck with that strategy too.

E-man says

Works for him. Had he not invested in real estate, he would have been looking for a JOB in Brazil.

Well if you're going to be in Brazil anyway, then sure.

FunTime says

http://www.nbcnews.com/business/real-estate/nation-renters-fewer-americans-now-own-their-own-homes-n167776

The reason less Americans owning homes is because they couldn't afford to buy. Wait until they and their kids are renting from the Chinese and Indians and don't understand why.

The effing politicians have sold us out, and people on this site are still arguing about the Dem & the Rep. Pathetic.

Strategist says

Now you know why you need a wife? Helps you qualify for a loan. You can't do that with Montreal Hookers. If one of you loses a job you might still be able to manage. The idea is to buy in the Bay Area, wait for it to triple, and finally retire in Vegas or Hawaii.

I own my home now. The mortgage was paid off, after the big bonuses started coming in with the hedge fund.

If I so wanted, I can sell and buy myself a retirement pad up in Montreal and continue to bone hoes with the dividend checks.

I bo*nk, therefore I am!

Rin says

Strategist says

Now you know why you need a wife? Helps you qualify for a loan. You can't do that with Montreal Hookers. If one of you loses a job you might still be able to manage. The idea is to buy in the Bay Area, wait for it to triple, and finally retire in Vegas or Hawaii.

I own my home now. The mortgage was paid off, after the big bonuses started coming in with the hedge fund.

If I so wanted, I call sell and buy myself a retirement pad up in Montreal and continue to bone hoes with the dividend checks.

In that case you don't want a wife. If you divorce, the bitch gets it all.

Strategist says

In that case you don't want a wife. If you divorce, the bitch gets it all.

Trust me, many guys over 45 have been telling me this for the past few years.

Rin says

Strategist says

In that case you don't want a wife. If you divorce, the bitch gets it all.

Trust me, many guys over 45 have been telling me this for the past few years.

Well, too late for me. I've been married over 25 years. She won't leave me no matter what I do. I think she is waiting for more money.

E-man says

FunTime says

http://www.nbcnews.com/business/real-estate/nation-renters-fewer-americans-now-own-their-own-homes-n167776

The reason less Americans owning homes is because they couldn't afford to buy. Wait until they and their kids are renting from the Chinese and Indians and don't understand why.

The reason is quite simple.

Homewownership is painful in the first 10 years for everyone who has a mortgage. After the first 10, the home is an asset.

Some take the approach that you have to scrap, work extra jobs, borrow and do what it takes. If my kids need a house at age 25, I'll write them the downpayment check, not have them wait and save for the DP.

Some look at it like I don't want to be tied down to this debt, save cash, rent ratio is not good, income % is too low, the Patrick way.

The US will be more competitive not less, so me thinks there is no choice but to compete or go to South Dakota. Basic demand and supply tells you things people covet will cost more, me thinks people will be even more demanding and pay even more money for things people like. A premium paid today is superpremium tommorow.

Call it Crazy says

Strategist says

Well, too late for me. I've been married over 25 years. She won't leave me no matter what I do. I think she is waiting for more money.

Just make sure she doesn't up your life insurance without telling you...

My term life insurance expires in 3 or 4 years. Shit, I think she's planning something big before that.
If I don't show up one day I want you guys to know......she did it.

We did not have the money to qualify for a down, then when we did we could not afford the monthly mortgage...thus the plan worked for us. Our other friends bought houses and cannot afford anything and say they cannot afford to retire...and some foreclosed too.

I am happy for you that you invested in real estate and did well, retired and your friend moved to Brazil...but for low to middle income folks like us in the SFBA, our renting, saving and buying worked very well.

Patrick's advice worked for us and we are happy ;)

retire59 says

We did not have the money to qualify for a down, then when we did we could not afford the monthly mortgage...thus the plan worked for us.

Respectfully, Im not seeing how being priced out is a "plan". In essence you had no choice - you couldn't afford to buy in 1979, you couldn't afford to buy in 2009. So again why thank Patrick in a rent vs buy thread when in reality, there never was a choice for you to make as you've been priced out for your whole life?

In any event, I see nothing "smart" about (your words) "renting for life and hating every minute of it". The reality is, had you been willing to sacrifice the way most of us did who bought when young, it pays huge dividends later in life. Like Patrick I confronted a rent vs buy calculator in 1999 (rent =2400 /buying =2900) and here in 2014 I thank god every day that I ignored it and bought (comparable rent now =3600).

Fact is your story is more of a teachable moment for the younger posters & lurkers on this site - if you are going to spend your whole life in one area, and if you can sacrifice early to afford it, a house usually pays enormous dividends well down the road. But unless you are able and willing to make that sacrifice, be warned, you later in life may have no choice but to move away.

CDon says

The reality is, had you been willing to sacrifice the way most of us did who bought when young, it pays huge dividends later in life.

Don't assume the renters are saving like crazy and making sacrifices. I'll put my unleveraged gains in the stock market against anyone's gains on a house. It's about net worth. Buying a house takes a lot of years off your ability to gain compound interest so it better gain fast. Like you said, "Ten years." A net worth growing with compound interest for ten years is very difficult to catch even with a leveraged investment. Probably the only way, based on statistics, is to time the market. Good luck with market timing-based investment strategies. On average, they don't work.

"aren't"

I bought in '11 and now my payment (refinanced locked in 3.75% for 30y) is $1000/m less than what rent would be....best move ever. Not sure what else to say.

I respect your comments but we eventually did buy...and using his calculator are doing very well and were able to retire early. We lived within our means and that meant renting instead of buying.

There were several layoffs during our working years and we were ok as the rent was much less than a mortgage. I think it always comes down to being realistic with your economic situation. We would have bought if we could have, and we did sacrifice, it was just a wiser decision for us and our finances.

In some areas of our country, it is wiser to buy, but not for us in the SFBA and our financial situation....being honest with ourselves, living within our means and when ready to buy, using his calculator worked ;)

Quite the circle jerk when house prices are "recovering" to a "sustainable" price point. Did patnet exist in 2006? If so I imagine a very similar thread was posted then. Boom times are great...

SubOink says

I bought in '11 and now my payment (refinanced locked in 3.75% for 30y) is $1000/m less than what rent would be....best move ever. Not sure what else to say.

You could say this: when purchased at a low price in a government manipulated market anything is a good investment at least in the short term.

E-man says

Had one bought in the last 2-5 years, some of the properties had more than doubled themselves

That's because those same houses LOST 50% of their "value" or more in the 2 years prior.

I am going to be over 10 years ahead on the mortgage ammortization chart by the time that nfl regular season starts!

The SFBA seems like one of the most artificial and wierd markets in the country. There are no fundamentals. There's only greed and speculation. Sort of like the stock market. You can win big or lose big, it all depends on where you get on the ride.

Quigley says

The SFBA seems like one of the most artificial and wierd markets in the country. There are no fundamentals. There's only greed and speculation. Sort of like the stock market. You can win big or lose big, it all depends on where you get on the ride.

of course there are fundamentals, the most basic one. demand/supply.

The median price in SF is what 1M, yet there are only 600 in the market for a city of 330K households.

I never understand the argument that just because it is expensive means its overpriced. Freakin Aulani resort in Oahu is expensive, yet the kids love it and the price is right. That ignores the basic principle of supply and demand.

SFace says

I never understand the argument that just because it is expensive means its overpriced.

Depends on what you mean by "overpriced." Overpriced can mean some fundamental that categorizes the price as wrong. I don't tend to think that.

Overpriced can also mean, "I know my income and I'm not buying no matter how much you'll loan me."

SFace says

Freakin Aulani resort in Oahu is expensive, yet the kids love it and the price is right. That ignores the basic principle of supply and demand.

That's the demand/supply curve for snob products. Demand increases as price increases.

FunTime says

Overpriced can also mean, "I know my income and I'm not buying no matter how much you'll loan me."

I wouldn't call that overpriced. It means you can't afford it, but it doesn't mean it's overpriced.

All these pro ownership folk base the entire "solid investment" argument on the premise that appreciation continues for eternity. So yea, if those shit boxes double again while they decay further over the next ten years, maybe paying all that interest to the bank will sound like a good business plan.

However, if we get a repeat of 2007, they will all cry foul. "Stupid republicans! They fucked us all again by allowing housing to become more affordable"
" if poor working shlebs were smart enuff to vote all dem, then our ponzi scheme could hold up while the dems continue down the only path they know, racing civilization into poverty by inflating real estate values"

Because we all know, higher real estate prices make us all collectively poorer.

Quigley says

The SFBA seems like one of the most artificial and wierd markets in the country. There are no fundamentals. There's only greed and speculation. Sort of like the stock market. You can win big or lose big, it all depends on where you get on the ride.

Yep sfba RE is a speculative stock market controlled by the government...just like the stock market.