Comment by techsupporter | Hacker News Reader

Comment by techsupporter | Hacker News Reader

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> most people should own their homes since most people are living in the same place for extended periods of time. The exceptions to that are rare and need consideration

I'd be very curious to know what kind of exceptions you mean.

I've owned where I live a few times, each time it ended poorly. Now, I rent. The problem is, I can't buy what I want to live in even if I wanted to buy. Here's what I want to buy:

- Inside the city limits of Seattle; location is not fungible, I can't substitute a property in Spokane or Atlanta for one in Seattle.

- Within a 10-minute walk to a train station or rapid bus route.

- An outdoor space of my own, not a shared garden but a balcony or private garden of some sort.

That's it. That's the Tweet.

You'd think that would be trivially easy, but the exactly two places I've seen where property can be owned (one is a townhouse development in Rainier Valley with an astoundingly expensive HOA, yet still sold out and the other is a condominium development near the stadiums but the handful of units with a balcony sold out immediately) are unavailable.

There's nowhere else. No condos, no townhouses, no rowhouses, not even any detached houses. It's all rented apartments. No one is building ownable properties, because of a combination of striving for rental returns, zoning, and Washington's condo liability law.

Well yea - that's a poor market for ownership and Seattle has one due to the recent (in terms of housing price response) appearance of two insanely large tech giants in the area - that causes a lot of market distortion that you're sadly on the receiving end of today.

It is financially advantageous to own a property, it is usually financially advantageous to own a property if you purely want to rent it out - renting is a profitable business that's why there are a lot of really large companies holding insane amounts of property in the US. If the city/region has some guaranteed demand for rental numbers (like uni stundents and young people working their first job) then the math changes to make it even more advantageous to rent - what you're essentially seeing is that owning property is the correct decision, it's so correct that the market for property is being soaked up by landlords that can make a tidy profit on the margin and are more reliable load recipients than individuals.

I'm sorry you're in the housing situation you're in because it sucks but, if you did see two identical places you liked and one was available for sale and the other for rent then it'd be the correct financial decision (really correct in fact) to buy the property.

Various regions within the US have toyed with ideas around taxing property ownership for investment more heavily but there is a lot of lobbying money pushing back on that. A lot of places (including BC where I'm at) actually have a primary residence tax credit for owners - if you own your property and use it as your primary residence you get a bit off your taxes to help swing the balance back toward individual owners.

> it'd be the correct financial decision (really correct in fact) to buy the property

Is it still the correct decision if I do not have a 20% down payment (or even a 5% down payment)?

Depends on opportunity cost. You might consider reaching out to trusted family for short-term financial assistance (loan interest is the problem, not the loan itself). You may be able to get a bank loan to cover the down payment, but is that worth it?

Depending on the real estate market and your specific property, a monthly mortgage payment has a good chance at being lower than comparable monthly rental payments. Bear in mind: every dollar paid for rental is burned, whereas every dollar paid to a mortgage has at least some potential to be recovered in the future. And think a few years out: say you pay $800/month for rent. Over three years, that adds up to $28,800. If you live in a hot area, your rent will likely increase, so you'll pay more in the long run. A mortgage payment, however, will not, and you might get that $28,800 back through renting it and/or selling.

I see renting vs ownership as "XaaS" vs in-house. Renting is essentially Housing as a Service. There's a use case for XaaS, but at a certain point, owning critical infrastructure just makes sense.

I agree that buying is preferable to renting (and better for your finances). But you underestimate the difficulty of doing that if you are poor. There are many folks who do not have any family or friends who are well enough off to be able to part with the money for your down payment. And no, you cannot get a bank loan to cover the down. The down payment exists because the bank wants to be sure that you have some skin in the game. In fact, a big part of the process of getting a mortgage loan approved is the bank digging into your financial records to confirm that the down payment is really your money, not a loan (from a bank or even trusted family). If they are not convinced it's your money -- no loan for you!

I suspected a loan wouldn't work for the down payment, but I wasn't 100% sure. Thanks for clarifying.

Oh, I know it's very difficult for poorer people to buy property. Are you familiar with land contracts (also called contract-for-deed)? In certain scenarios, they provide a path to ownership for poorer people, but they're also offered in a predatory manner.

I'll add that a poorer person seeking to buy might consider moving out of a big city to a smaller town. Obviously, this approach isn't for everyone. However, if home ownership is that important, you can find nice homes for sub-$150k in many smaller towns. At that price, a 30-year mortgage is under <$1000 a month. Considering how much a two- or three-bedroom apartment may cost in a big city, financially, it works out.

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