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  • Rent Vs Buy

    This is one of the best video I have ever seen on rent Vs buy. However, the biggest take away is how many people didn't understand this video in the comments section.


    Last edited by james.hendrickson; 07-10-2019, 06:49 AM.

  • #2
    I'm seeing a thumbnail but it just disappears when I click on it.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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    • #3
      I'll just post the link then. Fixed.

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      • #4
        Here is the link in case the video isn't working:

        https://www.youtube.com/watch?v=Uwl3-jBNEd4&t=257
        james.c.hendrickson@gmail.com
        202.468.6043

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        • #5
          Originally posted by Singuy View Post
          This is one of the best video I have ever seen on rent Vs buy. However, the biggest take away is how many people didn't understand this video in the comments section.
          The 5% rule makes sense as a good ballpark figure to use.

          I disagree with something he says at 4:39 though. He says you would never sell your house for 500K if you knew that the buyer would be able to resell it a year later for 550K. Of course I would. When I sell my house isn't based on the price. It's based on an overall decision and desire and/or need to move. If we've decided it's time, we wouldn't change our mind and stay another year just to get more money.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


          • #6
            ^

            And if the house value goes up 10% to 550k, it's likely the house you're moving into also went up by 10%, probably resulting in a wash.

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            • #7
              Originally posted by ~bs View Post
              ^

              And if the house value goes up 10% to 550k, it's likely the house you're moving into also went up by 10%, probably resulting in a wash.
              Kind of but depends on the cost of the house. You have more money that went up 10% if the house cost 500k vs a 250k house. So if you downgrade then you still pocket the profit.

              Investing is about how much money you have in a particular asset and how much of that increased in value. It's not just the 2nd part. 1 dollars worth of bitcoin that 100x is just a 99 dollars worth of profits. 100 dollars that 100x is 9900 worth of profit. You can't compare the two just based on percentages.

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              • #8
                That’s true Singuy but his point was still wrong. We still wouldn’t stay in the house just because we knew the value was going to rise.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                • #9
                  Well if you think it will go up in value, you probably want to move and rent it out in the mean time.

                  When looking at houses as an investment, people need to realize that it's like buying a stock using margins. You only paid 20%(or less) while the rest are on margins (with interest of course). So the value increased can superceded your investment by a boatload if done correctly. That's why I'm not 100% sure if a house value goes up by x percent vs stocks is apples to orange comparison. Compared to a stock using margins is more of an apples to apples comparison.

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                  • #10
                    Originally posted by Singuy View Post
                    Well if you think it will go up in value, you probably want to move and rent it out in the mean time.
                    Nope. Not a chance. I have zero interest in becoming a landlord. It is just not something I am cut out to do. Plus, if and when we move, it will be 1,000 miles away and I definitely wouldn't want to be a long distance landlord.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                    • #11
                      Originally posted by disneysteve View Post


                      I disagree with something he says at 4:39 though. He says you would never sell your house for 500K if you knew that the buyer would be able to resell it a year later for 550K. Of course I would. When I sell my house isn't based on the price. It's based on an overall decision and desire and/or need to move. If we've decided it's time, we wouldn't change our mind and stay another year just to get more money.
                      His mistake was using the over-generalization "never" ... Many people will make a decision to sell a house based on price (myself included), but not everyone.

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                      • #12
                        Originally posted by disneysteve View Post
                        That’s true Singuy but his point was still wrong. We still wouldn’t stay in the house just because we knew the value was going to rise.
                        Completely agree, by that logic you would never move if you knew your home would continue to increase in value.

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                        • #13
                          It's not a bad video but i found this article to be a more condensed breakdown, though it is about lofts as opposed to houses.

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                          • #14
                            Originally posted by scfr View Post
                            Many people will make a decision to sell a house based on price (myself included)
                            You'd sell your house just because the market value increased? That's... as politely as I can think... puzzling. Where would you live that also hasn't escalated in price that offers a similar lifestyle?

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                            • #15
                              Originally posted by Nutria View Post

                              You'd sell your house just because the market value increased? That's... as politely as I can think... puzzling. Where would you live that also hasn't escalated in price that offers a similar lifestyle?
                              Absolutely - Not only would I ... I have. No law says you have to buy again immediately. No law says you can't ride out a cycle in a rental. No law says a rental has to offer a similar lifestyle. And no law says when you buy again it has to be in the same geographical area. You can buy in a different area AND in a different market cycle. Ain't life grand?

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