Forever-a-Renter?

[Did]

@sclass i guess there are different levels of shit hitting the fan. i meant more personally, rather than at a societal level. Things turn to shit for most people at some stage in their life: mental health, physical health, jobs, returns etc. Not having to make rent and having somewhere safe to go is reassuring. When I was a young man, before I thought of any of this FIRE stuff, I used to say if you own your house all you need is baked beans money. My mate says surfboard wax instead of beans. And it's pretty much true.

[BRUTE]

@Did: it's certainly true that such a "safety net" is nice, but what about the opportunity cost? if instead of buying the house a human saved the money (even in a checking account), they would still have years of rent until they'd have to worry again.

now if buying a house is the only/best way for an individual human to commit to a savings/investment strategy, then that's one thing. brute believes this to be true historically. even a generation ago, most humans probably had no idea about investing or stocks. if humans wanted to save for retirement, a house it was. but that's different now, and for many more mobile humans today, the "house strategy" brings some disadvantages.

[Did]

@brute yeah I guess opportunity cost is something to consider. My tenants pay me A$550 a week rent. We live in a place that cost us about A$100k including modest renos. My mother in law is staying with us. Too early for a retirement village but frankly couldn't organise a pissup in a brewery, let alone moving from rental to rental.

[JL13]

@jacob

What cap rate are you using for NAV?

[jacob]

The long term rate + 1% risk (+ 1% maintenance unless you subtract the dollars amount in the numerator depending on how your equation looks).

[JL13]

10-year Treasury real rate or 30-year nominal rate? I think the former produces NAV approaching infinity.

[jacob]

Nominal, dude!