Home ownership vs renting

[killramos]

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Idk if I agree that it's a narrow set of circumstances, as there are quite a few levers on the vacation home own/vs rent decision. If there is a market crash, it might make a lot of sense to pick up a second home if a person plans to use it a lot. That being said, some friends of ours just bought a house in Palm Springs with plans to rent it out while they're not using it, and it's going to cost them $10k/mo to carry if they don't rent it. That's not something that makes any sense to me.

re: OP - sitting on lots of cash during an inflationary period is basically the worst thing you can do, isn't it? The value goes to $0 eventually.

That sounds an awful lot like timing the market to me.

As for your carrying cost argument, 120k a year buys a lot of vacation rentals lol. Not sure I could spend that much if I wanted to without renting a very large boat in the Caribbean haha

[dirtsniffer]

results very unsurprising for the demographic.

[benyl]

$10K / month is worse than a timeshare.

[SJW]

If I start renting does that mean I can complain about the government more while asking for relief?

[bjstare]

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$10K / month is worse than a timeshare.

$10k/mo is worse than [insert any option here] haha. Like I said, doesn’t make sense to me, but perhaps there’s more to the story.

[max_boost]

Beyond 2002
Beyond 2023
Beyond 2050
Good to see Beyonders in good shape

[killramos]

To me it’s a big inflection point on how many months a year you can spend at a vacation place, 3months+ (GFL pulling this off with a day job) I can see it. Any less than that, well maybe your wife doesn’t work and likes to spend a lot of time away from you with the pool boy?

Or you are wealthy enough that it doesn’t matter anymore. That’s fine too.

[Cash Money Hoes]

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Idk if I agree that it's a narrow set of circumstances, as there are quite a few levers on the vacation home own/vs rent decision. If there is a market crash, it might make a lot of sense to pick up a second home if a person plans to use it a lot. That being said, some friends of ours just bought a house in Palm Springs with plans to rent it out while they're not using it, and it's going to cost them $10k/mo to carry if they don't rent it. That's not something that makes any sense to me.

re: OP - sitting on lots of cash during an inflationary period is basically the worst thing you can do, isn't it? The value goes to $0 eventually.

Prices in Old Palm Springs/ Las Palmas doubled over COVID. I have been watching that market and it appears that prices are coming back down. Although much of the current sales inventory in the area appears to have traded in the last couple of years with current listing prices possibly inflated by people hoping to flip these houses. Many price reduction happening there. There is a actually a decent economic case to Airbnb the houses down there is you got in at decent value. Many houses renting at $20-30k USD or more per month during the 4-5 months of peak season (admittedly it is unlivable there during the summer months and Dec - Feb its sweater weather). That said it is easy to spend $50-100k per year in pool, gardneing, property tax, utilities and maintenance (depending on the size and quality of house).

I figure if you've got $10k to throw at a house per month, it's unlikely a housing crash is going to sink you, you've bought in cash or have a low leverage mortgage on the property. Almost certainly a long term lifestyle hold and you can ride out a dip. The lure of renting is a rational justification for an emotional purchase.

[SilverRex]

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With appliances and furnaces/HWT no longer expected to last more than 10 years and PolyB replacement prices, owning isn't looking as pretty. Windows, doors, insulation, roofs, etc don't last forever either. At the same time, all of those costs would almost certainly be passed down to renters. Having been mortgage free for a few years in my previous home and selling it for double what I paid, I'm still OK with owning.

Also, landlords seem to me like either a 3rd parent or a 2nd boss.

when I moved in 8 years ago, I read up that one should put aside about 400/month for maintenance. I thought it was a joke. Well the joke was on me. 8 years later I have put in 24,000 for general and major repairs including but not limited to garage door motor and springs failing, roof top leak, basement flood (from window that had a blocked drain outside), replacing a warped kitchen counter top due to a hidden faucet leak for many years, replacing a 23 year old furnace, and now recently all the poly B stuff. Next up is the falling cedar side fence that I share with my good neighbor and my original water tank....

[benyl]

Have you heard about the awesomeness of cottage country in Onterrible? Prices dropping 30-40% as everyone is trying to sell as they can't afford the payments.

Some of these rocket scientists used their LOC on their main home in Toronto to buy $1.5M+ "cottages" and can't afford the interest payments anymore and are trying to unload.

[Buster]

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Have you heard about the awesomeness of cottage country in Onterrible? Prices dropping 30-40% as everyone is trying to sell as they can't afford the payments.

Some of these rocket scientists used their LOC on their main home in Toronto to buy $1.5M+ "cottages" and can't afford the interest payments anymore and are trying to unload.

can you post sources on this?

[benyl]

https://www.cbc.ca/news/canada/ottaw...2023-1.6902062

https://www.thestar.com/business/pan...342a2b3b6.html

[rage2]

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can you post sources on this?

https://www.thestar.com/business/pan...342a2b3b6.html

It’s happening out west as well just not as drastic (yet).

[ExtraSlow]

Current primary residence thread now vacation property thread. Beyond, yep, checks out.

[suntan]

You'll pay rent until the day you die and rent always tracks inflation.

That's all I have to say.

[Swank]

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Current primary residence thread now vacation property thread. Beyond, yep, checks out.

Wait until the neighbor's leaves blow over to their vacation property while their kids drink pop, that's when it'll really go off the rails.

[dirtsniffer]

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when I moved in 8 years ago, I read up that one should put aside about 400/month for maintenance. I thought it was a joke. Well the joke was on me. 8 years later I have put in 24,000 for general and major repairs including but not limited to garage door motor and springs failing, roof top leak, basement flood (from window that had a blocked drain outside), replacing a warped kitchen counter top due to a hidden faucet leak for many years, replacing a 23 year old furnace, and now recently all the poly B stuff. Next up is the falling cedar side fence that I share with my good neighbor and my original water tank....

Pretty similiar. I plan to spend around 1% of the house value per year in maintenance to keep on top of things (my house was built in '91). That is somewhat outside major maintenance items like roof, windows, furnaces etc..

[ExtraSlow]

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Wait until the neighbor's leaves blow over to their vacation property while their kids drink pop, that's when it'll really go off the rails.

I'd rather die

[max_boost]

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https://www.thestar.com/business/pan...342a2b3b6.html

It’s happening out west as well just not as drastic (yet).

BC? Okanagan areas?

Or AB like Sylvan lake? lol

[riander5]

I own a home and love paying 6% on my mortgage

- - - Updated - - -

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BC? Okanagan areas?

Or AB like Sylvan lake? lol

Did you just put a space between your sentences?