tag:blogger.com,1999:blog-14245531.post2216708817146780484..comments2023-11-18T01:21:55.631-05:00Comments on My Open Wallet: David Leonhardt on Rent Vs. BuyMadame Xhttp://www.blogger.com/profile/11536189690094235926noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-14245531.post-89909579031780891102008-05-30T08:05:00.000-04:002008-05-30T08:05:00.000-04:00I bought somewhere between 9 and 10 in 2001. Like ...I bought somewhere between 9 and 10 in 2001. Like you, I wish I had bought earlier. My now-ex husband wasn't on the same page with me about that, though, so we didn't. Maybe it was for the best; not having any real estate made the property settlement easier. Irony of ironies, I felt like I <I>had</I> to buy when I did because I could no longer afford to rent.<BR/><BR/>Having said that, while buying was absolutely and positively the right decision for me, there is no single approach that is right for everyone.frugal zeitgeisthttps://www.blogger.com/profile/17804781758510341558noreply@blogger.comtag:blogger.com,1999:blog-14245531.post-26071737000834220472008-05-30T07:19:00.000-04:002008-05-30T07:19:00.000-04:00In someways David is missing the point. It is not ...In someways David is missing the point. It is not really a comparison of two stocks where you could invest in either and both offer the same benefit (passive economic gain). Renting is about having a home plus flexibility. Buying is about having a home plus other things like control and an economic investment (debt reduction, possible change in value).<BR/><BR/>Maybe the two are similar in that both can be a home. At the same time the flexibility that comes from renting has its greatest benefit when the occupant is unsure of the future (job change, city relo, death, divorce, marriage, house prices). The purchase decision is many times related to long term family commitments. Putting down roots.<BR/><BR/>When you buy you rent money to buy an asset. When you rent you just rent the asset. Both have a cost and both can provide shelter. If you save money renting you really should be investing the savings rather than increasing the personal consumption.<BR/><BR/>Many times when a couple buy there is a large emotional attachment. A statement about the relationship. A plan for the long term including children.<BR/><BR/>A simple calculation as to the ratio is interesting. Just like checking the weather forecast. In many cases the weather is nothing more than a distraction to what is really going on.<BR/><BR/>I have been a RE investors for over 20 years and I continue to buy or rent when that suits my situation. Even when I am renting I still own property in the same city or in other places (different states and countries).<BR/><BR/>David can calculate the ratio if that makes him feel better. Reducing the decision to a simple ratio is far from sufficient if one really cares to optimize. He might as well flip a coin as that will provide a simple answer also.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14245531.post-28339059156507475842008-05-29T16:35:00.000-04:002008-05-29T16:35:00.000-04:00Thanks for sharing the article -- I like the formu...Thanks for sharing the article -- I like the formula and never thought of it that way. I think I bought at around 10.4 in 2004.Escape Brooklynhttps://www.blogger.com/profile/02619558338660997233noreply@blogger.comtag:blogger.com,1999:blog-14245531.post-51439847077512302812008-05-29T15:27:00.000-04:002008-05-29T15:27:00.000-04:00While this link has merit .. I would just use this...While this link has merit .. I would just use this link.<BR/><BR/>http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=2&oref=slogin&oref=sloginAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-14245531.post-60177662720114309062008-05-29T01:36:00.000-04:002008-05-29T01:36:00.000-04:00That's a somewhat different approach. I've never c...That's a somewhat different approach. I've never considered it when evaluating a house purchase, instead I've looked at cash flow - which creates the biggest out flow of cash and I've considered if the rent will cover the costs should I decide to move out and rent the place.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14245531.post-88414265316218407702008-05-28T17:07:00.000-04:002008-05-28T17:07:00.000-04:00I calculated ours at between 15 and 19, back when ...I calculated ours at between 15 and 19, back when we bought in 2001 in SoCal.Anonymousnoreply@blogger.com