Forever-a-Renter?

[stand@desk]

In the Canadian city where we live, the price-to-rent ratio is heavily favored to the renting side of things and it has been for some time. I realize with the upcoming boomer wave of possible boomer downsizing and the possible increase in interest rates over the next few years, that this ratio should moderate somewhat, but this expectation has been lingering for years and it seems every year it's kicked a little further down the road.

My wife and I with our little one currently rent a nice suite at a very good price, lower than the average for a similar unit in our city and we live in a good location with a good walk score and close to work for us.

I wonder to myself if we will just ride out this lifestyle for a while to come. I do enjoy our modest living and the free cash flow at the end of the month and no mortgage and no ancillary fees (our monthly rent payment is all inclusive of water, hydro, parking, heat. We pay for internet and a very modest coin-operated laundry service). I enjoy this lifestyle but I do like to look at the real estate in the area and dream a little bit. But anything that is remotely comparable to our current suite but in a house format is grossly over priced. Properties that would be a somewhat lateral move financially would be handyman (and I am no handyman) specials in dodgy areas of town far from services and amenities and our jobs.

It is kind of like the golden handcuffs scenario. But they are quite comfy. I do personally love not having to deal with a bunch of extra fees and payments at the end of the month or year like property taxes, extra insurances, maintenance repairs etc. As far as a house I love the idea of hardwood floors and old character and a decent workout space with possibly a treadmill. I'd also love a nice storage room for long term food storage, something bigger than we have now.

I am just wondering if some of the forum members have had a similar situation to this in the past and have just made it through to the end as life-long renters by choice and have not regretted it, or have some forum members been in this situation and ended up moving to a house and either found the move a success in their life or a regret. I'd love to hear some stories. My wife and I are in our early 30s and we have a 8 month old at home. Thanks!

[Did]

I would like to hear stories as well, but I suspect those with the most telling perspective would not be on this forum. I think you can be enfeebled and unable to handle the rumble tumble of moving regularly and finding the rent long before you would normally get booted from your house. To me that would be a genuine concern: how renting works out for those towards the end, or otherwise impaired.

One success story of a sorts. I know an 80 year old who rents with his wife on the Gold Coast. Should they have bought 30 years ago. Hell yes. One whole pension of two goes on rent. But they still manage to do it. Could he work it out if she died along with her pension and he was 85? That's the unknown. Oldies with no homes are a looming fuckup for countries like Australia. I think there will be a huge "have not" segment that is in a bit of strife.

I guess whether or not the country sorts you out will depend on the political will and finances of the day. In my case I like the idea of a bolt hole at least even if you rent it out for 40 years and just have somewhere to go if renting doesn't seem doable when you get tired of it all.

[jacob]

We've rented and moved on an average of every three years until we bought our house almost exactly two years ago. If it wasn't for the fact that it turned out to be a good investment decision, I would have regretted it. I figured that buying a house and fixing it up would be a very compatible lifestyle for a FIRE person. You can buy cash; you can invest tax free if you live there two years; you're not bound by a job; you're very flexible; and there's a lot of stuff to do. MMM seems to enjoy this a lot. Conversely, I find myself not very interested in having to constantly deal with house issues and projects. It's a mental load that takes time away from things I'd rather focus on. It's kinda like clutter than way. It's always there.

Perhaps I would feel different about a house that isn't a fixer-upper. However, I've come to see home-ownership as a matter of degree. We don't pay rent, but we still have RE taxes. We don't have to ask the landlord if we can put a hole in the wall, but we still have to ask the city building department if we can put a new outlet in the wall. Also, while renting comes with the chain that is a lease, owning comes with the chain of having to sell it and being directly exposed to market prices. This can be good or bad. It's been very good for us. It was very bad for our neighbour.

[Did]

I have noticed we are happier out of our cottage. DW seems to never stop and there is an expectation I will help. I saw it more as a project which has finished whereas she always sees the next thing to do or fix. That's fine so long as she doesn't mind me being as idle as I am on a housesit. I didn't sign up to a long term - multi year - project. I'm just not that interested.

But I would be happy enjoying the fruits of our labour for a while if she chilled.

[Dragline]

Yes, I've come to the same conclusion -- that I don't get a lot of personal value for my time in taking care of a house, because that's really not where my personal interests lie. One could probably write a take-off on YMOYL called "Your House or Your Life."

But this is very different for different people, because many people do enjoy and get a lot of personal satisfaction out of this kind of activity (and we have many great pictures on this forum to show for it). I think I'd rather marvel at the work of others, which I do.

We have a large, newer, house right now but I would foresee downsizing and possibly renting in the future, depending on where our kids end up and whether they have their own children in another decade. Owning has made a lot of sense for us because we've only lived in two places since 1991.

[Sclass]

I've never owned my residence. People always asked why and how. I'll try to put some thoughts down here. This is a personal story and by should by no means be taken as advice. Everyones' parameters are different.

Living in the Bay Area for twenty years I've just rented. I lived near Google where rent for the same home is less than buying it one month at a time. So I just rented the cheapest place I could find near work and invested the rest in stocks. I beat the stock and housing market. I'm an outlier so YMMV. I also ended up picking up real estate as part of other investment packages so I'm actually more exposed to RE than most people even though I don't own the home I live in. I didn't plan it this way but it just kind of happened. That said, it killed the desire to buy more land.

Why am I forever renting? A lot of peers ask this question. Again let me say, this is for my parameters. For my peers, buying a home was the smartest financial decision they will ever make.

I took a look around and it looked like a bad deal in Googleville. Ironically RE has gone up fast there. But I'd still be stuck there working and paying on a mortgage if I'd bought in 1998 when I first had to decide whether to rent or buy. Bad deal (for me) because if you look at the real rate of return, I felt I could beat it. Bad because I didn't like putting too much money on one thing. Bad because I was a victim of the demographic. Something didn't seem fair about Prop 13 tax (tax subsidy for old people - 10:1 here against the young). Something didn't seem fair about paying twenty years salary for a home when my neighbors (the old bastards) bought theirs with five. And if they were so money smart and money rich, why were they unable to afford paint and roofing for their million dollar homes? If that was success (endgame) I didn't want it.

I know I know interest rates, inflation, RE appreciation. Right. I just didn't want to play that game.

I still don't own. Friends and relatives think I'm crazy they've called me everything but financially successful. Funny, except for the seniors, they all still work. And worse, my net worth is higher than the seniors citizens of my family. Takes all the fun out of playing the bragging game at reunions. They are quick to point out I rent. There seems to be some dissatisfaction in how I made my money since I didn't do as they'd instructed. Almost "don't listen to SClass he cheated and doesn't count."

As an aside I have two relatives who are forever renters. They are millionaire next door types. They avoid the same family gatherings as do their heirs. Very quiet rich people living in little urban apartments. They own other people's homes.

My momma wanted me to buy a home. It was her image of stability or being middle class. She said I looked lower class renting. Ironically she compared me to the millionaire next door relatives I just mentioned. Today she has dementia. I get a smile out of her when she mixes me up with my middle class older brother. She says "how's SClass? Does he own a home yet? Is he still unemployed?" I just tell her to forget about that loser. she cannot seem to do that even with dementia and all.

(Edited out old man rambling repeating myself. )

Mom doesn't ask why I can show up at her place any day any time unlike my middle class siblings. Home ownership. Oversimplified yes, but let's say big mortgages requiring long and productive careers to maintain.

Again, this all depends on who you are and where you live. I moved to a cheaper area in Orange County. Ironically it is a neighborhood of aging boomers and the new millennial buyers are nowhere to be found. This is an entirely different thread.

The one I struggle with is peer pressure. I'm 47 and I don't own. That means I'm poor right? I look poor so I am poor to everyone. "Don't listen to SClass you'll be poor like him!" They say. This has forced me to be happy dancing with myself.

It's so hard to think out loud and keep it short.

[Sclass]

One success story of a sorts. I know an 80 year old who rents with his wife on the Gold Coast. Should they have bought 30 years ago. Hell yes. One whole pension of two goes on rent. But they still manage to do it. Could he work it out if she died along with her pension and he was 85? That's the unknown. Oldies with no homes are a looming fuckup for countries like Australia. I think there will be a huge "have not" segment that is in a bit of strife.

I take care of my 80 yo mom with dementia. Owning or staying in your own home shouldn't be on the top of the list at that point. If wife dies he's going to follow in short order. I know from the pensioners perspective he wants to stay where he is forever. My mom certainly does. But then there is the reality of the situation. They're almost already dead.

[Did]

@sclass My gran enjoyed living in her home for much longer than she would have been comfortable renting all over the place. I'm not sure how she could have afforded it in any event. I guess making it to 80 and having to deal with it is a good problem to have....

[GandK]

This has forced me to be happy dancing with myself.

This song is now stuck in my head.

@stand@desk:

Strictly financially, I've seen arguments made in both directions. I think if you can buy a place you like outright it probably makes good sense most of the time, but with mortgages in play, the math changes. You'll have to run the numbers if numbers is your focus.

I hated renting, partly for the peer pressure reasons that Sclass lists and partly because I've never rented a well-built structure, which left me dealing with sketchy landlords and noisy neighbors. However, I also hated suburban home ownership, LOL. I don't want to spend all my time on the weekends pulling weeds and varnishing decks just to please the neighborhood yard Nazis. Or worse, pay someone else to do it. My best home situation so far is the one I'm in now, which is a well-built condo. YMMV.

[Sclass]

@sclass My gran enjoyed living in her home for much longer than she would have been comfortable renting all over the place. I'm not sure how she could have afforded it in any event. I guess making it to 80 and having to deal with it is a good problem to have....

I was kicking myself for sounding so cold about the 80yo friend of yours. I'm saddled with maintaining my moms 5 bedroom home on an acre of land. It is hardly ideal for a woman who should be in a memory care unit. At 80 I will certainly want to maintain what I was used to. My mom is happiest where she is. Maybe me not. It's a lot of work to maintain her fantasy land to my father's standards. Part of me wants her in a tiny one bedroom apartment next to her caregivers place.

Certainly having the ability to turn the home into cash if mom's medical care requires it (gawd forbid if I have to actually spend precious capital to maintain this sorry state more years) is a good option to have. Forever renting would not have allowed that.

This has forced me to be happy dancing with myself.

This song is now stuck in my head.
.

I'm dating myself. Still mourning Prince. I don't even have a turntable to spin my copy of 1999.

The landlord situation is familiar. I had a lot of trouble convincing landlords to rent to a forever unemployed renter this go round. It has made me reconsider buying just to get around the hassle factor. So as far as peers go, poor peers ask me why I'm not buying. So do the rich peers. " SClass you is soooo crazy. "

[JamesR]

Renters are lazy bums, if you want lots of constant work to do, especially on weekends, definitely buy a house!

[BRUTE]

The one I struggle with is peer pressure. I'm 47 and I don't own. That means I'm poor right? I look poor so I am poor to everyone. "Don't listen to SClass you'll be poor like him!" They say. This has forced me to be happy dancing with myself.

the price of being a sheep is boredom. the price of being a wolf is loneliness.

brute enjoys reading Sclass' rambling posts verily.

[Forskaren]

I think people think that I am poor, because I rent and only drive an older car. Sometimes it can be smart to appear poor...

[Toska2]

I'm forever a renter. My need for shelter and desire to control my environment are low. I am currently renting an apartment for 1/2 what a house, taxes, maintence and increased utilities. I have rented a room for 1/3-1/4 the costs.

If I thought I could find a series of stable room mates, I would buy. AirB&B is currently out of the picture due to current location.

[George the original one]

I'm trying to think of anyone I know who isn't a homeowner and coming up empty (unless you count my poor sister who bought a junky fifth-wheel trailer and rents a space in a decrepit trailer park). I suspect partly because home ownership is still 5x-6x median national wage.

Mom began renting once she reached age 78 or so, when she felt the burden of keeping up with yardwork after a vertebra collapsed. Her subsequent rental was a duplex where she could garden a bit... I think lawncare was handled by landlord. She gave up driving at age 80 and moved to an apartment next door to a grocery store. It wasn't until age 85 that we had to find a carehome for her after an acute diabetes episode; she passed away age 92 after flu became pnuemonia. The rest of her 4 siblings did not live long enough to leave their owned homes, passing away in their 60s or early 70s.

I fully expect to follow a similar pattern of becoming a renter once our home with acreage is too physically demanding.
***

IMHO, if you aren't comfortable with DIY and the only affordable options are fixer-uppers, then you're definitely better off renting until you can afford a home that is ready to go. New single-family construction should also be avoided unless you enjoy landscaping/gardening.

[BRUTE]

..desire to control my environment [..is..] low.

brute has a very high desire to control his environment. that's why he doesn't even consider buying a house. few humans have such limited control over their environment as those tied to a mortgage or house. they can't even leave. being bound has to be one of the more drastic reductions in freedom.

in general brute finds that renting vs. owning is usually comparing apples to oranges. brute can't buy the type of place he wants to rent easily, he'd have to buy way more space than he desires. equally, it's not as easy to rent the types of places humans like to buy. similarly, maybe leasing/renting a 1998 Corolla would be interesting to brute, but dealerships only seem interested in leasing/renting out brand new cars.

[Did]

@brute I own a house in Australia which I rented out when I quit my job almost 3 years ago. Having it there makes me feel comfort for my future should I ever want a house back home, and in the meantime it provides me with an income stream. I mention this because it did not tie me down and wanted to note the burden can be flipped to an income producing machine. Many people are in this position. We also own a small cottage in Ireland, but have just listed this on AirBNB and also intend renting it out next time we wish to vagabond globally.

[enigmaT120]

I don't enjoy house chores, but it motivates me to try to do things once. Who has that ad, do it right, do it once? My house has aluminum siding, so I'll never paint it. I (just last summer) finally go the last of the copper water lines out from under my house and replaced it all with PEX, so that should last the rest of my life. I'm saving up to put a metal roof on that should last the rest of my life, and so on. I guess I'll still need to replace my water pump every 20 years or so but that's pretty easy. I like to spend my time managing my woods, and I know some pretty old loggers so I may be able to keep that up until really late in life. Or until a tree falls on me.

[stand@desk]

Additional factors helping the pro-rent side for our case:
-Rental agreement is month to month, no 1 year lease agreements, so extra freedom in that regard.
-Our building has a elevator (we are on the 2nd floor) it's a nice amenity, especially with the kids.
-nice green space outside our suite, a medium size that can be good for the kid(s) to run around.
-School is nearby on foot, just have to cross a busy street (but has a good crosswalk) to get there.

So there are additional benefits to renting for us long term, and from the sounds of the opinions expressed here..renting is definitely the good longer term move for people like us.

My wife wants another baby, so could we have two kids and ourselves in a 2 bed/one bathroom 800 sq ft. apt for the long term? It'd be cozy, but when the kids got older, they would have great incentive to move out and start their lives cause we have no basement with a tv they could claim as their own den. Living in close quarters to their rents in the apartment might give them the encouragement they need to spread their wings! Also it might encourage them to go out and get part time jobs in their teens cause there isn't too much at home for them besides a place to sleep and wifi and food.

Would the dramatic point of decreasing returns be the two/three kids threshold for our home? Meaning our place would definitely be too small for three I would expect. So living here long term could cap our family size to 4.

[George the original one]

> Would the dramatic point of decreasing returns be the two/three kids threshold for our home? Meaning our place would definitely be
> too small for three I would expect. So living here long term could cap our family size to 4.

Only when your outlook on family size vs. home size is modern middle class. Yes, I'd be uncomfortable with more than 4 in that place, but it was certainly not uncommon a century ago.