How interesting.
Virtually everyone agrees that when I paid for dinner, it was a good value.
But when I rent an apartment (instead of buying), suddenly many more people think I’m “throwing money away on rent.”
What’s going on here?
Virtually everyone agrees that when I paid for dinner, it was a good value.
But when I rent an apartment (instead of buying), suddenly many more people think I’m “throwing money away on rent.”
What’s going on here?
Some thoughts on why people believe dinner is good, but renting is throwing $ away.
1. Financialization of real estate. In America, we believe that our house should also be an investment. Why? It’s not like that in many other countries.
1. Financialization of real estate. In America, we believe that our house should also be an investment. Why? It’s not like that in many other countries.
2. Propaganda. The powerful RE lobby + government + our parents all tell us that “real estate is the best investment of all.” There are even governmental tax incentives to buy! Repeat this for decades and a population starts to blindly believe, rather than running the numbers.
3. The idea that someone’s “getting one over them.” Americans HATE the idea that someone is making money off them. A Reddit comment said (paraphrased) “If you buy, it might cost more but at least you won’t be paying your landlord’s rent.” Do you understand how crazy this is?
4. Lack of understanding about phantom costs. People believe if you buy a house for $200K and sell it for $450K, you made $250K. They don’t understand maintenance/taxes and don’t compare ROI to other investments.
5. Following the same playbook as always. Buying a house was, in general, a good thing for most Boomers. They parrot the same lessons to millennials, who don't understand WHY/HOW RE works & follow it as a cargo cult. Unfortunately, they face a very different economic reality
Btw, here's what I've always said:
Renting isn't necessarily better than buying
Buying isn't necessarily better than renting
There are lots of reasons to buy a house -- financial, family, pure desire
I will buy a house in the future
My advice: Run the numbers & get educated
Renting isn't necessarily better than buying
Buying isn't necessarily better than renting
There are lots of reasons to buy a house -- financial, family, pure desire
I will buy a house in the future
My advice: Run the numbers & get educated
