Why does Chris Marteson RENT?
Does anyone know C.M’s reasoning on why he rents his house instead of paying for one outright? I’m sure he’s got good reason, I’m just curious on why. Do any of you regulars out there know?
He doesn’t. He just bought the house he was renting.
His standard was that he’d wait until an ounce of gold could buy an acre of productive land. We’re not there yet, but at this point he felt the benefits of ownership now (chiefly the ability to begin implementing long-term sustainability and adaptation measures that are difficult if not impossible when renting) outweighed the possibility that the real estate market may continue to fall.
He was waiting for the housing bubble to burst, I believe. After that he predicted that house prices would continue to fall until at least 2014 or 2015. But, as Switters notes above, he has recently decided to buy real estate sooner rather than later, trading money for time, as he puts it.
He believed the housing bubble was bursting and that housing prices are falling. However that being said home mortgage rates are probably the lowest they will be for the next 50 years.
so in the conundrum of whether to wait on prices to fall with the risk of mortgage rates rising he chose to lock in todays low rate.
I only recommend doing this if you plan on staying in your purchased home for more than 10 yrs, because lets face it renting is much cheaper than owning. It never ceases to amaze me how someone will pay 12000 a year in interest to a bank and be happy because they ‘saved’ 4000 in taxes.
I respectfully disagree- just on the point of saying that renting is cheaper. Since buying our home (we got a $40k house- no mortgage.) our living expense has been cut to less than half. Maybe even one quarter.
IF you are shrewd about what you are buying- INCLUDING terms and conditions (and I’m sure Chris was), you not only can pay less overall, but you maintain control over how a house should be run, do not have to fear rent increases, do not have to worry about losing it if the landlord wants to kick you out, etc.
Upkeep and maintenance. Big ticket items like furnaces, water heaters, roof etc. Have to be added in.
But if you paid cash and don’t have a mortgage then you are probably running cheaper, and if you do your own minor maintenance you will come out ahead. if you pay a plumber or electrician a hundred bucks just to show up and look at a minor problem. that eats up your savings quickly.
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