patrick.net

Nope.

As long as you save in other forms, buying a home or not is not that important. Owner occupied home is not an investment, it is just a tool for savings.

Yep. 40, married with one kid and renting. We are in a good neighborhood with lots of kids the same age as our son living around us. We plan to own someday but I don't see any urgency to buy.

Me2, thought not as age matured. Married with kids and long time renter in good neighborhood and excellent school. Thinking to buy someday.

i'm 40 and I dont own a car. I rent one instead. sometimes renting is more convenient I get to drive around in a shiny new car and pretend to live a lifestyle that I really can't afford
when you're done you just get rid of it.

so I can sort of relate.

Cue the "I'm not married, but I rent" jokes!

I generally fit your description, but definitely feel like a winner. Several of my friends who moved to the suburbs to buy have asked me in the last year how much I pay in rent because they were considering renting their place out and moving back to the city.

In my meantime, my wife and I have saved massively while living in a great place in a great city. First child on the way. Schools may become an issue, but uncertain. Two kids will mean a weird juggle in our place, so another child might mean a choice to move and almost certainly rent elsewhere.

We looked at renting a place closer to her office in Palo Alto, but just couldn't find enough reasons to move to the places(San Mateo, San Carlos, Burlingame) we found.

I'm pretty close - late thirties. Second kid on the way. I actually own two apartments that I rent out (a long way away), and use some of that income to rent a house myself. Much more flexibility this way - I moved across the country for work recently. The rent keeps coming in and I moved when I wanted to rather than after a house sold. I've never lived in the two apartments, and have a good management firm taking care of them.

The main problem with this scenario is my inability to "do up" a rental place... So I find myself facing rental options that are either overpriced or a little worn at times.

mnsweeps says

Deep within I know we are still way better than other financially and socially. Like we go on cruises, travel around, weekend movies and all that but our friends hardly do that.. So i do understand that even though we dont have a home to call ourselves, our lives are more colorful and merrier than other home owners…

Remember the story of the grasshopper and the ant:

The ant works hard in the withering
heat all summer long, building his
house and laying up supplies for the winter.

The grasshopper thinks theant is a fool
and laughs and dances and plays the summer away.

Come winter, the ant is warm and well fed.
The grasshopper has no food or
shelter, so he dies out in the cold.

Just some food for thought while you are enjoying your next cruise!

btw, that Grasshopper/Ant story was just to get me to 3 posts so I could post my own topic. It's difficult to know what to do sometimes. I have this constant dialectic within my own head regarding what is the best course of action. I'm a renter, too.

Best wishes,

Sean

no kids, but a few brothers live with me. renting at 42. Fact, I own more of my house, which is zero, than all of my underwater neighbors (which is less than Zero.)
I will save and pay cash or never own.
the security of a mortgage is an illusion IMO. All though, the impact on ones peers, ego, and family is most definitely not. The trick IMO, is to learn to see through the BS.

Sean7593 says

mnsweeps says

Deep within I know we are still way better than other financially and socially. Like we go on cruises, travel around, weekend movies and all that but our friends hardly do that.. So i do understand that even though we dont have a home to call ourselves, our lives are more colorful and merrier than other home owners…

Remember the story of the grasshopper and the ant:
The ant works hard in the withering

heat all summer long, building his

house and laying up supplies for the winter.
The grasshopper thinks theant is a fool

and laughs and dances and plays the summer away.
Come winter, the ant is warm and well fed.

The grasshopper has no food or

shelter, so he dies out in the cold.
Just some food for thought while you are enjoying your next cruise!

Sean7593 says

mnsweeps says

Deep within I know we are still way better than other financially and socially. Like we go on cruises, travel around, weekend movies and all that but our friends hardly do that.. So i do understand that even though we dont have a home to call ourselves, our lives are more colorful and merrier than other home owners…

Remember the story of the grasshopper and the ant:
The ant works hard in the withering

heat all summer long, building his

house and laying up supplies for the winter.
The grasshopper thinks theant is a fool

and laughs and dances and plays the summer away.
Come winter, the ant is warm and well fed.

The grasshopper has no food or

shelter, so he dies out in the cold.
Just some food for thought while you are enjoying your next cruise!

So when you said think about it when you take the next cruise, I am assuming you are thinking that I am like the grasshopper. If thats the case the comparison is not correct. Lets put it this way ..I play and work hard. I usually get a lot of stuff on deals/sales only ...I browse flyertalk.com, fatwallet.com, slickdeals.net and buy things on sale or super sales only.. I have cash to the tune of over $600,000 in bank ( though its earning less interest)... Considering this I would think you would recant the grasshopper/ant comparision..

By the way I just came back from seeing the movie RIO at AMC Universal City with my 6 yr old daughter.. I have not known or heard from my home owner friends of a single such instance. When I tell them I did this outing with my daughter friday evening , they appear expressionless and say nothing..

Civil Partnership and one cat.

Honestly Rent is so much cheaper.

I'd love to buy the place, but, Rent is fine..

robertoaribas says

If you truly have $600K, think about some better investments than banks.

I Recently bought 3 condos in Phoenix for $40K each, that are rented for $800 a piece. Even with factoring in $1000 a year in maintenance, and a months vacancy, they cashflow very nicely. You can find the detailed threads on here, I wrote about them when I bought them.
I am going to look for more this weekend.

Can u link me to your post? You live in az and it may seem easier for you to handle being a landlord..I have no exp in this and not sure how I can work it out from CA.

MnsweepsIphone says

robertoaribas says

If you truly have $600K, think about some better investments than banks.
I Recently bought 3 condos in Phoenix for $40K each, that are rented for $800 a piece. Even with factoring in $1000 a year in maintenance, and a months vacancy, they cashflow very nicely. You can find the detailed threads on here, I wrote about them when I bought them.
I am going to look for more this weekend.

Can u link me to your post? You live in az and it may seem easier for you to handle being a landlord..I have no exp in this and not sure how I can work it out from CA.

Of course he'll help you. He's a real estate house salesman. That's what salesmen do. He will lead you to the promised land in the desert outpost of phoenix. You will make loads of money while you sit in california, in fact he will probably help you load up on many phoenix condos for a commission.

lurking says

Of course he’ll help you. He’s a real estate house salesman. That’s what salesmen do. He will lead you to the promised land in the desert outpost of phoenix. You will make loads of money while you sit in california, in fact he will probably help you load up on many phoenix condos for a commission.

When it comes to "buy now and gimme commish" full-time RE agents, Rob is pretty far removed from them.

I don't get the connection between owning and forming any sort of self worth or image or whatever. I'm single, nearing 40, rent in a pimp place that all my friends are envious of, drive a gorgeous luxury sports car that is paid off, eat out twice a week, take in a concert or sports event with my girlfriend once a week, go out of town once a month, and generally live an enjoyable, awesome life.

I couldn't do any of that if I owned a place in LA in any sort of comparable neighborhood.

Yep, same boat.

In California it's the rational choice.

People who have to drive "cool cars" are suckers in my book. Buying a house would be just another irrational economic decision driven by OTHER people pressure and advertising.

mnsweeps says

I know we are still way better than other financially and socially. Like we go on cruises, travel around, weekend movies and all that but our friends hardly do that.. So i do understand that even though we dont have a home to call ourselves, our lives are more colorful and merrier than other home owners…

Just wanted to vent and see what peoples opinions are..

We are in a similar situation to yours, we didn't sell but we never traded up from our 1200 sq ft sh*tbox in a blue collar neighborhood, owner equivalent rent is VERY low for the Bay Area.

It is never good to compare ourselves to others because there will always be someone else with more or better. Instead just consider what is best for your own selves like the flexibility that comes with financial stability.

In answer to your original question, yes, we are fortyish, with kids, and renting. While this has been absolutely the best choice of the available choices, it is starting to feel sort of dead-end, as I don't actually want to be renting in retirement or paying off a mortgage in my late 60's. So we must consider whether it makes sense to continue living in California, or whether it might make sense to invest in property elsewhere, in a place we like, and hold that for retirement. We do have a cute rental place, and we are able to save a bit, but we don't invest in the rental place as we would in a home, and quality of life stuff is starting to matter. That said, I wouldn't buy the half-million dollar place we rent, on the general principal that (absent hyperinflation), this is not, to me, a half million dollar house.

Eliza says

In answer to your original question, yes, we are fortyish, with kids, and renting. While this has been absolutely the best choice of the available choices, it is starting to feel sort of dead-end, as I don’t actually want to be renting in retirement or paying off a mortgage in my late 60’s. So we must consider whether it makes sense to continue living in California, or whether it might make sense to invest in property elsewhere, in a place we like, and hold that for retirement. We do have a cute rental place, and we are able to save a bit, but we don’t invest in the rental place as we would in a home, and quality of life stuff is starting to matter. That said, I wouldn’t buy the half-million dollar place we rent, on the general principal that (absent hyperinflation), this is not, to me, a half million dollar house.

The theory is that the money you save with renting you should be actually saving, and you end up with more money in the end due to the extra costs of owning a house (tax, maintenance, loan interest). Then you can buy something nice to retire in with cash. Hopefully you aren't going crazy with your money though.

Yes, except for being 28, and with no kids. Ok, so not so much like you except for renting and enjoying the money we're saving. My wife and I would like to buy a home before we have kids but I don't see a problem renting if prices haven't come down by that time. In the mean time we are building up our savings and investments, and enjoying ourselves. In fact right now we're planning this weekend's road trip to Vegas.

You shouldn't feel like a loser, you should feel pissed that your generation got slighted in such a shitty way. Your prime real estate buying years were stolen from you by a housing bubble.

I'm at the point (and you may be too) where my family is growing and a decision has to made about a bigger place with better schools, yada yada. And just like I don't want to waste money on an infalted mortgage, I don't want to spend "extra" on a nicer rental if my goal is to save money to buy a house.

I wish I could take my savings and plunk it down into a house I can buy and live in for the rest of days without worrying that it was the worst financial decision of my life.

jessica says

You shouldn’t feel like a loser, you should feel pissed that your generation got slighted in such a shitty way. Your prime real estate buying years were stolen from you by a housing bubble.

I think a lot of folks share that feeling.

My advice is just save the money and buy something with cash later. Prices will come down and interest rates will rise, and it will be a good time to buy all cash.

I'm 40 and my wife is 36 with a kid on the way and we are perfectly content renting in the Silicon Valley. We wanted to buy a home back in 2007 but were turned off by the ridiculous prices and we wanted to stay flexible in case I had to change jobs. Since 2007, we've saved up a lot of money and got lucky in the stock market so we thought again about buying a home this year because prices have dropped so much but decided to hold of longer because I don't see much appreciation in home prices for the next few years. The reduction in the high balance conforming loan limit http://finance.yahoo.com/news/Federal-Retreat-on-Bigger-nytimes-3995455694.html?x=0 and the large inventory of foreclosures and slow job growth will restrict home price appreciation.

Back when I was 35, it was an issue for me that I didn't own a home, but now that I'm older and wiser I realize I wanted to own a home just to fuel my ego. When I was in my 20's and early 30s I always drove a nice late model European car to impress girls and show off to my buddies. My current car is now 10 years old and I can easily afford a $60k car but have no urge to get buy 1 because I know it's a waste of money.

In my situation, a home has to appreciate at least 5% a year and I have to stay in it for at least 9 years in order for me to be better of owning than renting (based on the NYTimes rent vs. buy calculator. http://www.nytimes.com/interactive/business/buy-rent-calculator.html

I'm kind of in the same boat (a bit younger, single parent), I've been renting and saving with the hope of one day purchasing a home. I felt like a loser before when seemingly everyone seemed to be purchasing, but I'm just grateful I didn't purchase a home others told me I could afford when my calculator said I couldn't.

I'm 45 and renting, but own a house. I
had to move for a job change. Professionally, it was a great move. I miss my house a lot and have had no success in selling it in 6 months.

I am 45 with two kids renting in Mountain view.

I'm also 45, married with two kids and renting, in Menlo Park.

Renting is definitely the best financial decision we ever made. I know at least four families like mine around here that got into trouble by "owning" a really expensive house, when they could have rented the same thing in the same school district for half or a third as much per year. We never even got close to financial trouble, and we took some great vacations too.

It also gave me the freedom to keep working on Patrick.net even after I got laid off. That would just not be possible with a huge mortgage, and I'm grateful for the opportunity to do what I really want to. If I can just make a bit of money from my data service (to be re-launched in a day or two) then I don't think I'll have to work for a boss at all.

I'm also really cheap when not on vacation, which helps a lot. We have just one car, and it's an old Corolla. I don't think our more status-conscious neighbors like seeing it around our very nice neighborhood, but I'm willing to let them disapprove. They think we're a bit weird anyway, because we keep chickens and grow vegetables in the front yard. We have a great landlord who does not object.

I think sometimes feeling like a "loser" is exactly the button that realtors push to get a commission. Realtors ruin the financial lives of millions of people every year. Fighting against that button-pushing is what this site is all about.

The best way to fight it is to stand up with other people and say "Yes we are renters and we save a ton of money!"

Maybe I need to sell or give away some kind of button or bumper sticker that says that.

I am 40 with kids and renting, feel like a winner. Had a home which cost me $5500 per month including property taxes, insurances, gardner, pool man. Got out of the house when I realized that it was all over for the housing market. Now I rent nicer house for $3000. I believe that prices will go to the level where I will buy again much nicer house than I had before for half the price. Just chilling and enjoying life.

I’m also really cheap when not on vacation, which helps a lot. We have just one car, and it’s an old Corolla. I don’t think our more status-conscious neighbors like seeing it around our very nice neighborhood, but I’m willing to let them disapprove. They think we’re a bit weird anyway, because we keep chickens and grow vegetables in the front yard. We have a great landlord who does not object.

I think sometimes feeling like a “loser” is exactly the button that realtors push to get a commission. Realtors ruin the financial lives of millions of people every year. Fighting against that button-pushing is what this site is all about.

Totally agree,..at 42, I too have suffered some shots to the ego over the years. I've been told my situation is weird by a few. I share a 2800 sq/ft rental house with three younger brothers. my share of the rent is $350. here are some facts that have helped me hold my head high.

My family is better off than they where a few years ago.

same neighbor that said my situation was weird also said " he is at least glad we are all white people (um what?)

all neighbors are currently under water from what I can tell.

3 of the 8 properties on my court have been forclosed on since the three years we have been here.,.. one of them twice.( second was a short sale)

I have been able to start a small home business ( cleaning up bank owned properties), and have employed two of my brothers.
2010 was really a lean year for me in Riverside County CA (lots of bid competition) But I'm still here and now doing great IMO.
was able to buy a bunch of new equipment for the business last month and now am looking at taking some time off. and am finally paying off some credit card debt at $1000 a month ,..mostly business start up stuff but not all :-(

I drive a 2001 Subaru with 178,000miles on it.

I shop at goodwill and always look for free swag on Cracklist.

DIY is my style and renew, reuse, recycle, is my mantra

I still have more time than money. And love it! I can garden for food,.. enjoy a week day off when I choose and feel like I live a very stress free life.

Money is still tight because of some debt. but I'm moving forward,.. reading, learning ,..watching,.. wishing,. waiting.

I don't seem to impress the Va Jay Jay much yet but, I think that has actually helped.

Thanks Patrick.

DC

Another great weekend for me... Saturday me and daughter went to Universal city ( we are annual pass holders ..passes we got a good deal for $60 for 2 with no blackouts on craigslist )....Sat night me and wife went to see Bridesmaid.. Just today me and daughter went to JPL open house in Pasadena.....Late evening I called up a friend who bought a home in Stevensons Ranch and he mentioned he spend the whole weekend cleaning up the yard ;-) On the phone I smelled something from the other end of the phone when I mentioned my weekend fun runs ...and it smelled like envy ;-))

I'm almost 40, with a child and rent in the bay area.

I'm so glad that I didn't get sucked into the housing bubble a few years ago.

I do think about buying at times, but not until it makes complete sense financially. In the meantime, I rent a house where the landlady lets me do as I please. I garden, paint, store crap in the garage just like everyone else, but I have the freedom of knowing that I can leave at any time. I put my spare capital in sound investments, cash and cash equivalents that are doing so much better than housing + mortgage would. It works for my landlady, it works out for me.

I don't think housing prices will rise for some time, and when they do, it will be a gradual increase. Salaries would need to increase, interest rates would have to *rise* significantly, and housing prices will have to drop significantly before it makes sense for me.

I don't feel like I'm missing much, and I gain a lot of piece of mind in knowing that my family has and will have everything they need.

mid 30s not married, a few very expensive toys but generally lived reasonable frugal. Zero debt and way above average in savings and retirement due to the fact that I've haven't fell into the American debt dream. Live in a spacious house in great neighborhood in the heart of the Silcon Valley. Super short commute... (damn..do I sound like I'm bragging?...sorry.)

Yep, almost 40 with a couple of kids and renting in the Bay Area.

While we have been frustrated that people making %25 of us priced us out of the market; we have never felt like "losers".

Even during the build up to and the peak of the market, we thought we were making the right choice to rent.

We are zero debt and are general pretty frugal, but... Recently replaced our old car with a new one. About 30K in cash for the new car, not too much of a big deal to us today. A few years ago I quit a job that I hated, and took a few months off with no worries. We always have a couple nice vacations a year. We eat out several times a week, out anniversary dinner this year was a Gary Danko. For the kids we have season passes to the zoo, Fairyland and they get trips to play cafe's.

I don't think any of that would have been possible if we had bought during the boom, we would be running a tight budget that did not allow for much in the way of extravagances.

39, Married with two young kids. Moved to our CT town as renters a few years ago just as the market was beginning to fall so we decided to rent. Looking to buy something this summer, but worried that prices will continue to fall and might wait until next summer. (please see my question on this post about how decreasing conforming loan limits will effect prices: http://patrick.net/?p=696753)

Meanwhile, some of our friends & acquaintances in town, many of whom bought just before the peak and are now stuck, ask us too many personal questions -- imagine sitting in the living room of a cozy cocktail party with five couples and one of the wives asks all about when we will buy a home and how much money have we saved for it "its a great time to buy! A house is not an investment -- it is a place to live [so, what's wrong with you guys -- do you have bad credit?]". Imagine the silence in the room as everyone focuses on the answer.

I've gotten used to being polite and following up with a doozie of a personal question for them.

A drawback is that we are not a fully engaged in the town as we might be because there's always the possibility that when we ultimately do buy something, it will be in a different town -- a town that we were priced out of a few years ago and that has lower taxes and better schools (our school budget is being cut)!

tenant in foreclosed house says

A house is not an investment

Did I hear "grapes are sour"?

tenant said
"I’ve gotten used to being polite and following up with a doozie of a personal question for them. "

I always ask.
"so when did you all buy?"

tenant in foreclosed house says

Meanwhile, some of our friends & acquaintances in town, many of whom bought just before the peak and are now stuck, ask us too many personal questions — imagine sitting in the living room of a cozy cocktail party with five couples and one of the wives asks all about when we will buy a home and how much money have we saved for it “its a great time to buy! A house is not an investment — it is a place to live [so, what’s wrong with you guys — do you have bad credit?]“. Imagine the silence in the room as everyone focuses on the answer.

I’ve gotten used to being polite and following up with a doozie of a personal question for them.

A better doozie to lay on them is why you don't want to buy something that based on your own views and analysis will tank in value. Maybe put a quip in there like "since it's the biggest purchase in our lives, we gave it a lot of thought." See if they can sense the distinction, sense that they did the opposite:)