Buying a Home Is 45% Cheaper Than Renting........

Why isn't anybody doing it? Some people are, but:

"asking home prices have started to rebound and have risen by 2.3% year over year in August (3.8% excluding foreclosures); however, rents have risen more (4.7%). This means that prices are lower relative to rents than they were a year ago"

Is nonsensical, and no conclusion can be drawn from that.

"But more importantly, mortgage rates have fallen:"

Makes no difference if prices rise.

"If you plan to stay in a home for 7 years, which is the average time that Americans traditionally live in a home before moving again,"

7 years, b/c they don't take transaction costs into account.

You answered your own question: "The big obstacle holding back renters who want to buy is the down payment -- even more than getting a mortgage"

HahahjaahhajajajajajajajjHahhahaahahahhahhahahajhajah.
Just watch sprint hit $10/share in a year. Flmaozzzzz. Who gives a fk what better. Discussing the wrong asset class. Flmaozzz

trulia. a bit whorish, don't you think?

i think the comment that people are unable to scrape together a down payment and mortgage availability is not so good is very bullish for real estate. tool.

"Just watch sprint hit $10/share in a year."

Hey Frick, don't you realize you're on a real estate website or are you to dense to understand that? LOL!

Why don't you post on a stock forum or are you out of your league and others laugh at your ridiculous comments?

Just asking.

Sprint $4 a share in a year.

can people stop posting this kind of junk on this forum? they are talking about sh1t places like vegas or FL

thanks for providing the trulia ad--next time buy a banner--this isnt a free advertising site

reny - are you saying it's never appropriate to consider a real estate purchase from an investment perspective?

"they are talking about sh1t places like vegas or FL"

Did you miss "New York/New Jersey Metro area is 31% cheaper to buy!"

Hey yikes, it was picked up by Forbes, MarketWatch, and lots of local and national media. I guess reading it took up too much of your valuable time. LOL!

Seems like it must have hit a nerve with renters. Keep tossing your money out the window.

I can't help it if the real estate market bottomed out 2 years ago and you missed it.........

"New York/New Jersey Metro area" = Paterson and Patchogue

"New York/New Jersey Metro area" = Paterson and Patchogue"

Believe me the equation works for NYC also, low mortgage rates, tax advantages, high rental prices, how long you intend to stay in the home, etc. NYC isn't working in a vacuum all it's own, it's a different market but many of the same national trends affect Manhattan and Brooklyn. I would bet based on the price of NYC rentals, the advantage to renting is greater than 31%.

"are you saying it's never appropriate to consider a real estate purchase from an investment perspective?"

Where did you get that impression.

"the advantage to renting is greater than 31%."

Obviously should be "advantage to buying!"

reny, please provide your dealer's phone number. he sold you something really good this weekend and i want some.

unless you don't have a clue of how simple math works, buying RE in PRIME MANHATTAN is nowhere near being beneficial. most examples that have been put on this board show that it will cost 33% MORE to own than rent.

why don't you show us where it would be otherwise with even a single example in PRIME Manhattan.

guess RealEstateNY never been to manhattan in his whole life and have no idea how the market it is ever.

hey RealEstateNY, did you get all your knowledge about manhattan from Forbes, MarketWatch, and lots of local and national media?

at 45% cheaper than rent, i am a voracious buyer--of numerous properties

you are a broker (in the know)--pls provide examples of this amazing secular investment opportunity so that i may pay you commission

hurry up, i'm hungry

I say it's cheaper to buy a $1 million dollar 2 bedroom (convertible 3), 2 bath on the eastside of Manhattan in a doorman building than it is to pay the average price of $6,000 for a rental. When you factor in the tax advantages, where 50% of your maintenance and 70% of your mortgage are deduct1ble on city, state and federal taxes. That's not even factoring in appreciation, which we all know over time is a given.

Work the numbers.

cao: I bet I've lived in Manhattan much longer than you. I've been here so long that I was able to buy a studio, one bedroom and 2 bedroom/2 bath for under $500k in total. All in doorman buildings. Now that's appreciation. LOL!

cool--so put up the listings--let's do bidnisss!

RENY is the example why there is free lunch - plenty of people out there fail to take into account some major variables in rent vs. buy calc. if you are smart enough to take all variables into consideration, you will pay less to rent.

RENY is the example why there is free lunch - plenty of people out there fail to take into account some major variables in rent vs. buy calc. if you are smart enough to take all variables into consideration, you will pay less to rent.

http://streeteasy.com/nyc/sale/667681-condo-1619-third-avenue-yorkville-new-york

Like this one. An F line apartment rented during prime summer months at $4,400. 20% down, non-conforming loan at an aspirational 4% gets you monthly total somewhere near $5,700. With tax benefit, assuming no AMT (which would be likely), you about break even. For the joy of painting your walls pistachio in a characterless condo building on York Avenue.

Sign me up.

and i'm not counting transaction costs, lost investment opportunity of down payment, etc. which would push this into a fairly significant loss for most purchasers.

Sprint at $5.74. In the SP 500 only one stock has outperformed sprint this year. W67 picked up sprint at $2.40 and stated. Ppl holding on and buying Nyc re are mispricing risk and return. W67 stated sprint will outperform any pos nyc re bought btwn 2004 and 2014.

So it has come to pass. There is a 100k lot w67 purchased that is up 150% in 4 months. Nyc re no so much.

On a much more basic level, you have to assume that the Trulia report looks only at SFRs, and doesn't take into account coop maintenance, and probably excludes even condo common charges (in virtually all of the country, they're a negligible amount: landscape service, new roof and parking area retop every 25 years, water, done.

So they're comparing mortgage payment ONLY (maybe RE taxes, or maybe not, or maybe they use a national average rate applied to everything).

They probably also use a national average for repairs, upkeep, etc. And of course everything is pricier in this Metro; much more so in prime NYC.

Here's another fine example, 9F rented for $4,900 this June.

http://streeteasy.com/nyc/sale/597081-coop-420-east-51st-street-beekman-new-york

impossible to tell what it sold for, but at ask would be around $7,400 a month

RealEstateNY, now we are clear, you are saying 30 years ago in manhattan, buying is 45% cheaper than rent

why don't you just pack up and go back to 30 years ago and be the prophet???

The hard part is for a 1 mil apt you have to basically come up with 300k and a lender IF U CAN GET ONE to finance the rest. They got bailed out and are not willing to lend crap.

"I say it's cheaper to buy a $1 million dollar 2 bedroom (convertible 3), 2 bath on the eastside of Manhattan in a doorman building than it is to pay the average price of $6,000 for a rental"

If only that were a logical comparison.

The kind of apartment that would sell for $1 million (how crappy must it be if it is a convertible 3 for a mil) would rent for less than $6k. Hell, I just saw a luxury 2 bed in a top rental building rent for $6k... the equivalent apartment in the building across the street (maybe a little bigger, similiar amenities) is $2 mil.

stop with the negging--i wanna do bidniss

RENY, bring me deals, baby, deals

AR - didn't you buy a place in blue chip NYC area this year that you determined to be good investment and cheaper to own than rent? My point being, it can be done by a very savvy buyer. Totally agree that renting is cheaper than owning for vast majority of people, but commentary should be fair and balanced. Curious to know if W67th respects your purchase as W67th is the only poster I've seen on this forum who appears to take position that single family real estate purchase is never investment. I have never seen RENY take that position, and certainly not on this thread. I think you are an amazing poster and would actually subscribe to any blog you ever wanted to start. I really value your comments, except those that appear to disagree with certain posters purely for the sake of disagreement.

RENY - Totally agree that W67th should go hang out on site like Stocktwits - I have never read one comment from W67th about real estate other than purchase is for morons. Why is he on this site at all? Broken record.

I'd like to know where in nyc i can buy a $2650 rental apt with only $1850 in carrying costs.

put, like, 60% down, and don't sweat what happens to your downpayment

"why don't you just pack up and go back to 30 years ago and be the prophet???"

If only I could. LOL!

30 years from now, you'll look back at that sack of rent receipts and wish you had bought in 2012, and believe it or not, those 30 years will fly by.

NYCNovice: "Totally agree that W67th should go hang out on site like Stocktwits - I have never read one comment from W67th about real estate other than purchase is for morons. Why is he on this site at all? Broken record."

W67 (Frick as I call him), seems to have everyone mesmerized on this forum with his supposed success with Sprint. Individual stock picking is merely gambling and with gambling you only hear about the winners, the losers are kept very quiet.

he rec'd a buy for a stock, real time, and indicated the size he was committing--the stock has doubled and then some--he has predicted another appx doubling from here--nothing mesmerizing, just a great stock call, not mixed in with a bunch losers, but the one and only call he's shared here.

here's one of your typically vacuous, useless calls:

"I say it's cheaper to buy a $1 million dollar 2 bedroom (convertible 3), 2 bath on the eastside of Manhattan in a doorman building than it is to pay the average price of $6,000 for a rental. When you factor in the tax advantages, where 50% of your maintenance and 70% of your mortgage are deduct1ble on city, state and federal taxes. That's not even factoring in appreciation, which we all know over time is a given."

and to get you some cred, i suggested you back up your claims with some reality: a listing--you aint got one--and then you spout about how worthy your "contributions" are here--

when I look at my sack of rent receipts in 30 years--i look at all the other assets i have owned instead of real estate, and likely be quite pleased

your stuff is all fluff--fluffer

Yes I did. But not in manhattan, and as I've said I've only seen a handful of such cases over the past few years, and most have been in neighborhoods where sales prices are still at risk. My having found a needle in a haystack doesn't really reflect much in terms of the general state of the market

I've been struggling with the question of buying vs renting as well so I would appreciate to hear your views.

Do you guys take into account the broker fee in the rental scenario? What is the going rate these days (15% of first year rent?) Is it fair to assume that the best apartments are only listed by brokers or there are good no-fee apartments out there as well?

In terms of transaction costs, the big costs (for condos) are mortgage tax and mansion tax when I buy and broker fee and NYC+NYS transfer taxes when I sell (so almost 12%). Am I missing something?

"30 years from now, you'll look back at that sack of rent receipts and wish you had bought in 2012, and believe it or not, those 30 years will fly by."

Wow, did we really just get another "buy now or be priced out forever". This guy/gal is losing whatever credibility he had by the second.

I can tell you, I am absolutely looking at my rent receipts for the last 5 years and thanking the dear lord I did not buy.... when guys like this were swearing it was time to. But now you really mean it, right?

AR - Agree. I am a huge fan of the needle in the haystack and just get annoyed by the constant refrain of some on this site who say that renting is always better than buying. So many variables. With that said, my position remains that for anyone who is asking advice from Internet forum as to whether he should rent or buy, the answer to that person should always be to rent, regardless of market conditions.

"just get annoyed by the constant refrain of some on this site who say that renting is always better than buying. "

Of course it isn't. Not only are there exceptions for specific apartments - and that goes both ways, I've had more than my share of below market rental deals - but prices and rents flow.

What you are just seeing is a lot of folks just tired of hearing "it is always better to buy", which has never stopped being said, even though the last 5 years blew the hell out of that one.

Fair enough!

"he rec'd a buy for a stock, real time, and indicated the size he was committing--the stock has doubled and then some--he has predicted another appx doubling from here--nothing mesmerizing, just a great stock call, not mixed in with a bunch losers, but the one and only call he's shared here."

And you think individual stock picking is the key to financial success? It's simply gambling. Do you know how many stocks he's traded since than and how many losers and winners he's had? Anyone who has to toot his horn over and over again on a good stock pick he made is covering up other bigger insecurities. I'll take real estate any day of the week over individual stock picking. You can throw a dart at a list of stocks and come up with a great pick. The question is can you do it over and over again. The answer is no.

Wow, did we really just get another "buy now or be priced out forever".

No one is saying that, but as they say in the financial markets, "Past performance may not be indicative of future results". At least you can live in real estate, and hope that it lives up to past performance, not much you can do with those stock certificates when they tank.

See you in the AM.

I did just that this year and it is way cheaper for me as an owner than was renting. Not hypothetical, real life. Paying about 30% less per month and living in a much nicer apartment and in a comparable neighbourhood. And yes had to put down a good chunk (30%) but that is fine for me.

Notice how a few years ago there were numerous delusional renters on these boards bragging that their time was coming, and now only a few are left standing still clinging to the myth that owners have been worse off?

LICCcummers... hey nice to join us again. What do you think of the impact of IO Jumbo loans going from 7% to 3% since 2007....

AND yet SELLERS can't seem to coax a penny of profit.

REALESTATE NY AND NYCNOVICE stfu. GO BUY MORE REAL ESTATE...... don't turn your head.. .just shovel more mouthfuls of RE down your gullet. WHO says you can't eat spahgehtti O's for every meal? GO on don't stop.... keep shoveling it in..... therez plenty more and cheap too... buy buy buy.... leverage leverage leverage...

Ottawa - interesting. Can you share more? I haven't had any luck making this equation work, so curious to learn from your example. You don't need to provide the actual numbers; maybe you can just scale up or down all the numbers such that 1,000,000 = purchase price and index everything off of that.

If I'd had to put 30% down to achieve my rent/buy discount I never would have bought. But at 10% down I could tolerate it.

NYCNovice. W67th's position is that if you can afford to take a bath and go in knowing you may well do so that's ok. You're just choosing to act stupidly. But he also knows my ability to run the numbers, and my lack of need to sell, so I doubt he thinks I'm an idiot in this case.

Well actually my choice to put down 30% was actually not my choice. But more one of the concessions I had to make to get a decent mortgage because of the lack of any credit history. So with a really low interest-rate, 3.15, and a tax abatement so zero taxes for 12 yrs or whatever. That's how the MathWorks I guess. But for me it was more of a cost certainty thing and the pain of giving money away month. I still haven't factored in taxes. But definitely works for me. So I'm quite happy.

I don't doubt that you are happy. But as a rent/buy analysis it is huge. there is an opportunity cost to sinking your down payment into housing, and there are transaction costs. you are likely quite wrong in saying that your costs are 30% lower, although they may seem to be. not trying to piss on your parade, you may have made a decent decision, but your calculations likely don't take into account various other costs.

Insane in the membrane. Talking about tulips after the tulips have burst. At least try to pump roses or a different asset class. Same ole same ole missionary style. Not again tonite?!?!

How much income are banks looking for to finance 1.5 mil ?

I'm potentially a first time buyer and have been struggling with the own vs rent analysis myself so I would appreciate your comments.

On the rent side of the equation, is it fair to assume that the best apartments can only be found through brokers and as such, the broker fee needs to be taken into account? What's the going rate in NYC (15% of first year rent?). I currently live in a no-fee rental building but it seems that condos are potentially nicer.

On the owning side of the equation, what are the major transaction costs for condos? I've been considering around 4% when one buys (mortgage tax and mansion tax are the biggest components) and 8% when one sells (5-6% broker commission + NYC/NYS transfer taxes). Am I missing anything major?

"And a tax abatement so zero taxes for 12 yrs or whatever"

What neighborhood then? That does not sound like "prime Manhattan" as others are narrowing this discussion to. I question the math even for Harlem or LIC, but I am just curious what area you are talking.

And does the math ONLY work if one gets a similar tax abatement? Which again, is very uncommon in prime Manhattan.

And why you think the 30% down you could have spent on something else does not matter.

And are you including renters insurance versus homeowners in this calculation?

What about inside the unit maintenance?

I can believe that renting versus buying is approaching parity in Manhattan, or even that it might be 5% cheaper or so in certain neighborhoods. TOP is lying big time however if he says its 30-40% cheaper in MANHATTAN.

And again, as others have asked - show specific listings.

There are MANY condo buildings with units for rent, so its very easy to have precise comps.

Jason: Yep, that's exactly why I was curious about Ottawa's comment. I've used both buy/rent calculators and the comps available in condo buildings, and I simply can't get the math to work. It's a bit frustrating, but I'm just planning to sit tight for now.

re: I'll take real estate any day of the week over individual stock picking.

says the guy who just happened to buy before and during the largest real estate bubble in the history of real estate (and bubbles).

re: That's not even factoring in appreciation, which we all know over time is a given.

really? says who? for how long? in which markets?

Oh sorry, hadn't read closely. I went from union square to williamsburg. But into much, much nicer place/building. I looked though in Manhattan (for me prime are about four places south of 14th that I would live) and still would have been cheaper, but more like 10% a month. I found in Manhattan the thing that really killed you was the CC and taxes and I could never figure out why places would have $800 cc and no amenities. But, as I said math worked for me. I never used those stupid rent/own calculators. And problem with the opportunity cost agument is that it assumes that you do something smart with your money. I'm lazy, don't care to follow the market and so I stick it in some mutual fund and then look and usually does nothing.

But for me also, I bought a while ago and market (here at least) has already gone up a healthy amount and beyond all my closing costs (which weren't near as much as I thought) and with condos its tricky, because there are none in Manhattan unlcess you have some serious cash or want to live in Murray Hill, way out west or in FiDi. (Gross)

reny--so anyone can throw a dart into a boardful of stocks, just once, and that stock hit will double in a month, and again?
wtf planet do you live on?

Not in New York City is it cheaper. As high as rents are, buying still has an even higher premium from everything I've looked at. Quality may be better, but still.

A"nd you think individual stock picking is the key to financial success? It's simply gambling."

Absolutely incorrect. Gambling, the net return for investors is negative. Pick stocks, and you might not bea the market, but on average you're going to do slightly worse, which is incredibly positive... and FAR greater than the resturns on RE in the long term.

"Anyone who has to toot his horn over and over again on a good stock pick he made is covering up other bigger insecurities."

Unlike folks who do the same with RE purchases?

Now you are just being petty.

"I'll take real estate any day of the week over individual stock picking."

Great, you've shown your lack of investment knowledge. Stock picking has beaten out real estate recently, and over the long run.

I'm really just not sure what you're talking about here... it is bordering on nonsensical.

"You can throw a dart at a list of stocks and come up with a great pick. The question is can you do it over and over again."

Again, you don't have to. Diversify, and you're all set. You'll do better than RE.

The problem with buying apartments is few people CAN diversify. If you put 500% of your net worth (what you do when you leverage) into ONE apartment on ONE street in ONE city, that is awful diversification (especially when you are only talking one asset class).

Your generalizations are just awful here.

"No one is saying that, but as they say in the financial markets, "Past performance may not be indicative of future results"."

Wow, did a RE bull finally admit to this? Clearly times have changed.

Yes, recent performance is a bad indicator. But over 100 years, there are specific lessons to be learned... clearly you didn't learn any of them.

"At least you can live in real estate"

If you are living in it, then it also costs you money easy month. Unlike stocks, which pay dividends. I was very happy to earn 100%+ return in the stock market, then pay my rent with it. Doesn't mean this is always the case, but it is nonsensical to make this comparison without looking at all factors.

You really don't understand markets, do you?

"Notice how a few years ago there were numerous delusional renters on these boards bragging that their time was coming, and now only a few are left standing still clinging to the myth that owners have been worse off?"

LICC, you can't really be this dense. Fewer people are saying it now because it is much more of a GIVEN now. Owners saw prices tank, and our rents stayed low through most of it. The vast majority of folks who bought in the last few years would have done much better financially if they hadn't and bought now.

Sorry, you were just wrong, sugar, face it. The market tanked, while stocks soared.

palestrino - apologies for my flippant comment above; not aimed at you. I had not noticed your post. The rent vs. buy decision is a highly personal one dependent on a myriad of factors. I believe the consensus these days is to rent unless you have a strong preference for customizing and controlling your living space, having some say over who your neighbors are, etc and are willing to pay a premium for that. So many variables, but as current renter looking for something to buy, I have to say that even factoring in rental broker fees and moving costs that I might have to pay for frequent moves, I am not seeing anything that makes sense to buy given what I can rent for less, and I have a strong preference for controlling and customizing my living space. See http://streeteasy.com/nyc/talk/discussion/32476-help-should-i-buy for more in-depth discussion.

"I believe the consensus these days is to rent unless you have a strong preference for customizing and controlling your living space, having some say over who your neighbors are, etc and are willing to pay a premium for that."

Besides the financial equations, there are pros and cons on both sides (again, leaving out financials, which is its own disussion)

BUY PRO
x Customize the space
x Lock in a portion of costs
x Know your neighbors / live among other owners (assuming not condo)
x Know where you will be living for next XXX years, fewer unforeseen events

RENT
x Much more ability to change apartments / upgrade / switch neighborhoods (big for me here, not only trying different hoods, but my tastes in apartment types have changed, lofts vs. towers vs. townhouses, etc.)
x Landlord responsible if appliances break (big one, this rarely gets mentioned for some reason... love that if something goes, it gets replaced usually within hours, including ac units... and they come and automatically service everything to keep it running well)
x If you hate your neighbors, much easier to deal with the situation
x Very little responsibility as an apartment owner, with leaks, breaks, who knows. Just less to deal with. Send a check, and it is taken care of.

I'm going to leave out apartment "quality" because I think you have good and bad in both. Lots of people went from cheap rentals when young and upgraded to more expensive purchases later, so this isn't a fair assessment. I've seen crappy in both (more in rental), mediocre in both, and great in both. I've lived in high end rental buildings that put most of my friends who own buildings to shame. In the end, the quality will be paid for in either case, so call it part of the financial decision.

"Much more ability to change apartments"

What are the costs associated with that?

"If you hate your neighbors, much easier to deal with the situation."

Why's that?

"Landlord responsible if appliances break"

Stove, and refrigerator last 20 years, dishwasher, A/C and microwave last 5-10 years. No big deal.

"Very little responsibility as an apartment owner, with leaks, breaks, who knows. Just less to deal with. Send a check, and it is taken care of."

Same with ownership, slip a few dollars and the super takes care of it.

Have you checked Sprint over the last 24 hours, down 6%, so if my calc is correct your genius buddy lost 25K in the past 24 hours. That doesn't happen in real estate. LOL!

$25k. Really r u fkig kidding me? What's a special bond for financially retarded people that show zero capital appreciation even as rates go from 7% to 3% on a 10x leveraged basis and which makes up the largest portion of that person's lifetime net worth?

What you don't understand is that a $5 put option on sprint cost $12k for 2months. The other thing w67 has done is sold short laddered put options at $6 / $7 /$8 and purchased $3/$4$5 put options. Worst case scenario my in cost gets bumped up 20% so w67 only has 110% return in 12 months. Best case? $3mm gain. Now run along retarded re broker. Go on and lock in your re bubble. Oh that's right. You'd have to pay yourself 6% commish to sell you pos apt. Flmaozzz.

It all you know is missionary style, lets just ban anal sex shall we?

RENY. Whole foods opened Up. Those sutton place apts must have seen 30% bumps in selling prices in the last month?

Sprint jumped 20% after their last earnings release. W67 can't wait. My plan is to long sprint for 8qtrs and position my option strategy with a bullish view. If done correctly, $5mm gain in 3 yrs is not out of the question.

Doesn't happen in RE. Look at Bloomberg today and the comparison of the Great Depression and this Great Recession. Both linked by easy credit and RE! Flmaozz

> "Much more ability to change apartments"
> What are the costs associated with that?

Renting - moving costs. Some time.
Buying - everything for renter + broker commissions, transaction fees, lawyers, points, even more time.

You're in the business and you really don't know this?

"If you hate your neighbors, much easier to deal with the situation."

Why's that?

> "Landlord responsible if appliances break"
> Stove, and refrigerator last 20 years, dishwasher, A/C and microwave last 5-10 years. No big deal.

See above, much easier to move.

> "Very little responsibility as an apartment owner, with leaks, breaks, who knows. Just less to deal with. Send a
> check, and it is taken care of."
> Same with ownership, slip a few dollars and the super takes care of it.

Not sure what you are talking about. A super will get you a new refrigerator?

> Have you checked Sprint over the last 24 hours, down 6%, so if my calc is correct your genius buddy lost 25K in
> the past 24 hours. That doesn't happen in real estate. LOL!

Yes, instead it took longer but you lost 200%. You really pretending that is better? In reality, RE can lose value that quickly (see 9/11). The challenge is YOU JUST DON'T KNOW IT...

You also seemed to ignore all the other corrections of your mistakes... you really don't seem to get this investing thing.

"And you think individual stock picking is the key to financial success? It's simply gambling."

Absolutely incorrect. Gambling, the net return for investors is negative. Pick stocks, and you might not bea the market, but on average you're going to do slightly worse, which is incredibly positive... and FAR greater than the resturns on RE in the long term.

"Anyone who has to toot his horn over and over again on a good stock pick he made is covering up other bigger insecurities."

Unlike folks who do the same with RE purchases?

Now you are just being petty.

"I'll take real estate any day of the week over individual stock picking."

Great, you've shown your lack of investment knowledge. Stock picking has beaten out real estate recently, and over the long run.

I'm really just not sure what you're talking about here... it is bordering on nonsensical.

"You can throw a dart at a list of stocks and come up with a great pick. The question is can you do it over and over again."

Again, you don't have to. Diversify, and you're all set. You'll do better than RE.

The problem with buying apartments is few people CAN diversify. If you put 500% of your net worth (what you do when you leverage) into ONE apartment on ONE street in ONE city, that is awful diversification (especially when you are only talking one asset class).

Your generalizations are just awful here.

"No one is saying that, but as they say in the financial markets, "Past performance may not be indicative of future results"."

Wow, did a RE bull finally admit to this? Clearly times have changed.

Yes, recent performance is a bad indicator. But over 100 years, there are specific lessons to be learned... clearly you didn't learn any of them.

"At least you can live in real estate"

If you are living in it, then it also costs you money easy month. Unlike stocks, which pay dividends. I was very happy to earn 100%+ return in the stock market, then pay my rent with it. Doesn't mean this is always the case, but it is nonsensical to make this comparison without looking at all factors.

RENY is just delusssssssssssssional.

Stove and Fridge do last 20 yrs, but at times need repair. A dishwasher is $1K, microwave $500-1500. You slipping your super $50-100 for everything that happens can quickly add up. You having to pay at least $1K per month extra, PRICELESS.

a portion of what one owns is a depreciating asset.
a newly renovated apt is usually trashed and in need of a redo in 10 years, much sooner if kids have lived in it.
a newly renovated apt, never occupied even, loses it's appeal and value significantly over 10 years, as styles/tastes change. now there are styles of renovation which are less of a statement and hold value for longer periods of time, but if they're trashed who cares? and isnt the ability to renovate/design as one wished a value? NO

owners consume and pay for this--renters are provided renovations to trash for free

all else equal a 10 year old apt is worth it's original cost less cost of renovation--prob 15-25% of value

ab_11218
about 1 hour ago
Posts: 1647
Member since: May 2009
ignore this person
report abuse RENY is just delusssssssssssssional

your not the only one that thinks that

You are

Bond math / pricing dictates that the rate is INVERSE to the value. Over the past 30 years rates have dropped like a rock. LIBOR is 25 bps today. Going forward, rates can only go up over the long term. That will have a dramatic negative affect on capital values, and the increase in financing costs will make it impossible for future buyers to borrow as much.

Brooks, why don't you have some self respect and spell properly the first time so that you aren't so embarassed by yourself that you need to correct yourself? Not everyone needs to be caonima and speak in broken English.