Early retirement without home ownership

[Alphaville]

You should see my quirky antique rug collection! It's less toxic, more efficient, more visually interesting, and a far better investment.

please post up some photos, if you wouldn’t mind!

[zarathustra]

I gotta figure out how to attach photos. . .

[Flurry]

In Austria renting seems to be easier to me. I rent a apartment with a small garden (what I find luxurious) for 1050€/month together with my wife. Buying a similar apartment would cost around 400.000€ + fees up to 10%. We'd lose flexibility and become the bank's slaves. I like the idea more to purchase stocks until they yield enough dividend to pay the rent
In Vienna there's also a very good social housing system, if we reduce our working hours to move to a lower income bracket, we can apply for an apartment which is even cheaper.
Moving to a rural area gives us the opportunity to purchase a cheap house but we'd need to go from 0 to 1 or 2 cars which adds a lot of costs again and I really don't think it's worth the effort.

[ertyu]

The car issue is definitely a reason why I ultimately decided on settling in a city. A house in a rural area is cheaper than an apartment but it is also more expensive to maintain and carries with it all expenses associated with compulsory car ownership. In the end I decided that purchasing my produce and not having to deal with maintaining a roof and a septic system + avoiding car, fuel, car insurance more than makes up for the added cost of urban housing.

I have to admit that I gave in and I bought a place. There are definitely cons, but let's hope it all ends up alright.

[fireeu]

I am currently renting in Germany, and as soon as you have kids, it is really hard to get kicked out. Even if they want, it takes years. Many landlords also value long term relationships.

So depends on the country. If something breaks, landlord has to fix it. Germans even bring their own kitchen to rental apartments since many stay 10 years or longer.

I guess that's one advantage of FIREing in Germany.

My plan is still to own a place at some point. My wife is Canadian and we want to own a place where we can grow food and have animals there.

But that's maybe 10 years or more ahead. Currently living in a city, with 4 second hand stores close by, grocery shops, schools etc. No need to own a car or anything.

[cloudeleven]

I just applied online for an apartment last night in a pretty big apartment complex managed by a corporate property management company. It's my first time renting an apartment, and I'm 40 years old and ERE'd so I don't have any income, just living off my investments. I called them this morning, and surprisingly I was already approved. They didn't even check my income or financial statements. I guess they liked my excellent credit and clean background/no criminal history? Anyway, she did say she wants to see either previous tax form or investment statements before move-in date.

That was surprisingly easy. I thought I'd have difficulty renting a place having no income, just living off my portfolio, especially being my first time renting an apartment. I was feeling kinda intimidated about it.

Interestingly, I called an apartment complex yesterday about 20 minutes away that uses the same online application system as the one I was approved at, and I asked them, "Can you approve someone in 24 hours?" and she said "Oh, people get approved in 5 or 10 minutes!" So I guess it's just a robot automatically approving you based on credit scores/background report...I like that.

[thrifty++]

I just applied online for an apartment last night in a pretty big apartment complex managed by a corporate property management company. It's my first time renting an apartment, and I'm 40 years old and ERE'd so I don't have any income, just living off my investments. I called them this morning, and surprisingly I was already approved. They didn't even check my income or financial statements. I guess they liked my excellent credit and clean background/no criminal history? Anyway, she did say she wants to see either previous tax form or investment statements before move-in date.

Thats great! What country are you in?

[cloudeleven]

Thats great! What country are you in?

USA. I just updated my profile to show my country.

[WFJ]

Always a renter as career raises have always provided more value than home ownership, but considering home ownership in ERE. Once retired, raises due to job hoping will be removed from consideration, but legacy fixed costs of maintenance and most importantly, taxes are a major concern. Absent a nationwide Prop 13, taxes on a modest home can swamp any ERE budget. Has anyone modeled this fixed and "un-hackable" cost in ERE?

[unemployable]

Absent a nationwide Prop 13, taxes on a modest home can swamp any ERE budget. Has anyone modeled this fixed and "un-hackable" cost in ERE?

Property taxes in most of rural America are well under $1000/year, often under $500/year. They can be expected to rise with inflation unless where you retire to quickly gentrifies.

House prices themselves right now, I have no clue, everything's stupid. For now I think it's best to stay wherever you are for as long things stay stupid.

[lillo9546]

I’ve posted about this in the last thread...and some others. So this is kind of an update.

The story so far is I rented for the last thirty years. I rented cheap places and put all my extra money into stocks. About fifteen years in something started to get obvious. Had I bought the average Silicon Valley engineer’s home in my town I’d be poorer than if I rented my teardowns and put all the rest in Silicon Valley stocks. Now I’m not interested in buying a home anymore. I mean how could I after tasting that sugar?

I look at my landlords and the amateurs trying to rent out in my town. Not the side I’d take in this game. They don’t even know how to run a good business...so they buy a home and rent it out. Then they get frustrated with lousy tenants coming and going while treating them like disposables. Had they run a better operation and carefully courted quality clients they’d be better off than their pay per use revolving door they operate. I get attitude from landlords for the first few years before they figure me out. Then they realize they found a gold mine. It’s an educational period.

After seeing this replay several times I realize we are just entering into a bet against one another by renting vs landlording. Of course I’m better than they are. It just takes them awhile to figure out their place in our new hierarchy. They’re used to their tenant being their subordinate and not the valued customer.

So the unthinkable happened this summer. After stabilizing my rental relationship with my landlord for five years where they are now grateful for my tenancy Covid struck. Landlord is dead. That was a big fear but somehow being afraid didn’t stop it from happening. So I’m either going to have to move again and train another landlord or convince the heirs that they own a gold mine.

I did inherit my mom’s home a couple of years ago. Not really interested in moving in. Cashing it in for stocks would be easier than mowing the lawns and getting the mail.

Hi there! How could you be so "stocks" pro and "real estate" cons? What's your experience/knowledge?

[Stahlmann]

Pls delete

[Sclass]

Oh my @Stahlmann. You’re our archivist here. A little spooky there old friend.

Yeah roughly speaking that’s me.

Let’s see, why did I feel this way? I ran the numbers. For my parameters the stocks showed more promise. I lived in Silicon Valley where homes are very expensive and I invested in stocks I knew - local tech. Renting was a lot cheaper because nobody in their right mind rents there given the appreciation of their real estate.

So in my calculations the home loan sucks up a disproportionate amount of your income for a single asset that goes up at single digit rates. High single digits makes Silicon Valley real estate attractive but you will lose sight of what actually drives the gains. Local tech stocks. So I figured I’d just cut straight to the stocks.

I mean if these crazy bidders are driving up the home prices because they have employee stock options why nut just cut to the chase and buy the stocks instead?

I saw a few of my mentors pull the same trick I did and win big so that inspired me. These guys rode the minicomputer boom cycle in the 1970s and 1980s. History repeats itself in the valley over and over again.

I won if you consider getting more money as winning. Of course life is more complicated than that.