Do you think renting is dead money?

Dudess

Really? Why stop at renting then? Why not apply the "dead money" logic to any essential/life-improving service?

I don't understand the above mind-set - accommodation is provided by someone else who owns it, therefore they have to be paid. If it's too expensive or the accommodation is sub-standard, well ok, that's not worth paying for, but if it's what you're looking for and you're happy there, what's "dead money" about that if the alternative is not affordable?

Tefral

I suppose its got to do with the fact the rent money isnt going to buy you accomodation that you will own one day.

I mean you could be paying the same on a mortgage and you would also be essentially paying installments to eventually own the dwelling..

Renting only gains you a roof over your head.
Buying and paying a mortgage gives you the roof over your head but the money is also used to essentially buy the place in the end therefore giving you 2 things rather than just renting which gives you one.

chin_grin

cronin_j wrote: »

I suppose its got to do with the fact the rent money isnt going to buy you accomodation that you will own one day.

I mean you could be paying the same on a mortgage and you would also be essentially paying installments to eventually own the dwelling..

Renting only gains you a roof over your head.
Buying and paying a mortgage gives you the roof over your head but the money is also used to essentially buy the place in the end therefore giving you 2 things rather than just renting which gives you one.

Tell that to all those in negative equity. :pac:

cornbb

Paying interest on a mortgage is dead money too. And you don't actually own the house for 20/30/40 years anyway.

Havermeyer

The first DLC for Fallout: New Vegas is "Dead Money".

Snakeblood

Dudess wrote: »

Really? Why stop at renting then? Why not apply the "dead money" logic to any essential/life-improving service?

I don't understand the above mind-set - accommodation is provided by someone else who owns it, therefore they have to be paid. If it's too expensive or the accommodation is sub-standard, well ok, that's not worth paying for, but if it's what you're looking for and you're happy there, what's "dead money" about that if the alternative is not affordable?

There are a lot of people walking around right now who wish they'd invested in dead money rather than the vampire stuff that's sucking the life out of them.

I realise this is a tortured metaphor so let me close on this.

SAN DIMAS HIGH SCHOOL FOOTBALL RULES

Nolanger

Britain to become a nation of renters

Millions of young adults 'will never be able to afford their own homes'

By Andy McSmith
A generation of young British adults is close to giving up hope of ever owning their own place to live. A startling new survey reveals that while the great majority of young Britons from "Generation Rent" would like to become homeowners, most believe they will be unable to raise the mortgage they require to get on to the property ladder.


A combination of continually rising house prices and pessimism about the future is threatening to send into reverse the explosion in home ownership stimulated by Margaret Thatcher 30 years ago, making Britain more like Europe, where living in rented property is the norm. The findings, issued by the Halifax, coincide with a separate report from the housing charity Shelter which reveals that the number of mortgages offered in April slumped to the lowest level since records began. Just 29,355 mortgages were granted, 18 per cent fewer than during the same month last year.

ScumLord

Dudess wrote: »

Really? Why stop at renting then? Why not apply the "dead money" logic to any essential/life-improving service?

There's been a recession just so you know, people haven't said that for the past two years.

In fact us renters laugh when we hear something like that from people in negative equity.

Micky Dolenz

It's an old saying for old people.

We all need to live somewhere. I bought a house in 09 for a friction of what they wanted and my mortgage is still higher then if I was renting the exact same house. With renting is great freedom, no maintenance worries and you can feck off when you feel like it.

Kevin Bacon

You receive the use of an asset, namely the house or flat. That is not dead money. Very simple stuff.

Dead money would be throwing out in the street, you receive no good or service for it.

Never understood what people meant by that.

Snakeblood

Micky Dolenz wrote: »

We all need to live somewhere. I bought a house in 09 for a friction of what they wanted and my mortgage is still higher then if I was renting the exact same house.

Well, that's the rub, isn't it?

Danbo!

Haha I love this phrase. Heard it all the time in 2004-2007. "ya finton, my one bed mid terrace in athlone means a 2 hour commute to Dublin but the value went up 10,000 last week alone, you should buy, renting is dead money."

Don't hear any of the ****ers telling me how much their house's value dropped last week now.

Benny_Cake

Never got this argument. If I took the train every day for 30 years, I wouldn't expect to own a train at the end of it all. I pay for a service, I get the service, I stop paying, I don't get it anymore. I speak as a homeowner btw (well, mortgage payer would be more accurate). If it suits you to rent, then rent.

Crasp

Flatmate owns our college apartment. charges me and a 3rd flatmate 300 per month. (say 600 total).

So I lose 300 per month and at the end of the 5 years of college have lost 18,000. (I think? sounds like a lot).


my flatmate buys apartment, uses our rent to pay his mortgage installments.
at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even. I'm down 18,000.


that's why rent is dead money!

BrianSlipknot

Rentings great. No restrictions as in you're not stuck there when u eventually own the place. AND as said before the bank owns your ass for about 20/30 years anyway 'till its paid off.

Tar.Aldarion

renting is the way to go, get to change house/location when you want...not tied down as much. Constantly get a change of scenery etc

Snakeblood

Crasp wrote: »

Flatmate owns our college apartment. charges me and a 3rd flatmate 300 per month. (say 600 total).

So I lose 300 per month and at the end of the 5 years of college have lost 18,000. (I think? sounds like a lot).


my flatmate buys apartment, uses our rent to pay his mortgage installments.
at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even. I'm down 18,000.


that's why rent is dead money!

You aren't losing anything. You're buying a service. Your flatmate is gambling with a mortgage that he will be able to pay, and that he will be able to sell for a profit orr break even.

Benny_Cake

Crasp wrote: »

Flatmate owns our college apartment. charges me and a 3rd flatmate 300 per month. (say 600 total).

So I lose 300 per month and at the end of the 5 years of college have lost 18,000. (I think? sounds like a lot).


my flatmate buys apartment, uses our rent to pay his mortgage installments.
at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even. I'm down 18,000.


that's why rent is dead money!

But you have the use of an apartment for 5 years. So you're not just handing over money and getting nothing back! I wouldn't be so jealous of your flatmate, the value of apartments in a lot of places has fallen far more than the value of houses.

Silentcorner

if you hope to live past 65 you had better put money into something if you have been renting all your life...a pension perhaps...how are they performing these days does anyone know?

After 20/30/40 years the roof over your head is yours, you live for free....the day you stop paying rent you are out on the street...

The people who are now the pro renters have become as obnoxious as the old "our property is now worth..." dimwits....negative equity only affects you if you are selling or can't afford the mortgage ( in which case you will probably live for free for two years anyway )

--LOS--

Thats just the attitude of this country, it is a lot more common to rent in other countries like Switzerland but then that is only due to the price of property there. I wouldnt view it as dead money anyway, you're dead stuck in the one house forever though.

kelle

Well, I'm very pleased I bought my house. My mortgage repayments were slightly less than the rent I had been paying on a flat for 2 years previous, and I now own the house outright.

If I hadn't spent so long renting, I could have owned my house sooner.

Benny_Cake

Silentcorner wrote: »

if you hope to live past 65 you had better put money into something if you have been renting all your life...a pension perhaps...how are they performing these days does anyone know?

After 20/30/40 years the roof over your head is yours, you live for free....the day you stop paying rent you are out on the street...

The people who are now the pro renters have become as obnoxious as the old "our property is now worth..." dimwits....negative equity only affects you if you are selling or can't afford the mortgage ( in which case you will probably live for free for two years anyway )

I agree with your last paragraph. It suits a lot of people to rent, if I was single and wanted to live in the city, you bet I'd be renting. We did rent for years, but got a bit tired of the shoebox apartments in Dublin (at the time it was hard to find decent-sized places to rent at a reasonable price). We moved out and purchased in early 2010 and have no regrets even though the value has dropped a bit since then, our quality of life has really improved. Horses for courses really.

stovelid

Owning a home suits some people, especially those who don't want to move around anymore or sometimes those with kids and they will own the house eventually, giving their kids an asset when they die. Renting suits some people for other no less valid reasons. To be honest, the smug pontificating from those who rent is no less annoying than that from the buyers during the boom years. Everybody makes a lifestyle choice and it is no better or worse than anybody else's.

Kevin Bacon

Kevin Bacon wrote: »

You receive the use of an asset, namely the house or flat. That is not dead money. Very simple stuff.

Dead money would be throwing out in the street, you receive no good or service for it.

Never understood what people meant by that.

It's a phrase churned out by people who see housing as an asset rather than shelter, by that it means that after paying the mortgage (easily 2x the "price" of the house) it's yours to sell. Rent on the other hand is spent with no chance of any return.

Most people who promote "rent is dead money" hope to gain somewhere from the property market.

jam_mac_jam

Food is dead money, transport is dead money..

opinion guy

Crasp wrote: »

at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even

:eek:
Where've you been ?
I hope you are not studying economics!

Silentcorner

And by the way you are not stuck in the one house, you can rent it out to someone willing to pay the mortgage for you, you can rent where ever you like and still in 20/30/40 years time you have an asset you can sell or live in.

People in other countries rent off someone as well, that doesn't make them smart does it?

We live in a predominantly rural country where we should expect to own a home, for security if nothing else. They will prove to be as reliable as any pension.

My point is, on the balance over a 20/30/40 year period you are better off buying....

amacachi

Crasp wrote: »

Flatmate owns our college apartment. charges me and a 3rd flatmate 300 per month. (say 600 total).

So I lose 300 per month and at the end of the 5 years of college have lost 18,000. (I think? sounds like a lot).


my flatmate buys apartment, uses our rent to pay his mortgage installments.
at the end of the 5 years, sells the apartment (probably for a profit) and at worst breaks even. I'm down 18,000.


that's why rent is dead money!

Fair play to him/her for making a profit in these times. Also for being in a position to get a mortgage when in college. Out of interest, you do realise that after 5 years probably about 5%, if even, of the principal will have been paid back? Add fees etc. and selling the place at cost price means breaking even. Then again, we all know property values only ever go up!

opinion guy

jam_mac_jam wrote: »

Food is dead money, transport is dead money..

Has anyone seen any live money around ?
I tried feeding mine, watering it, giving it light etc. It never grows:(

amacachi

stovelid wrote: »

Owning a home suits some people, especially those who don't want to move around anymore or sometimes those with kids and they will own the house eventually, giving their kids an asset when they die. Renting suits some people for other no less valid reasons. To be honest, the smug pontificating from those who rent is no less annoying than that from the buyers during the boom years. Everybody makes a lifestyle choice and it is no better or worse than anybody else's.

Except when people bitch and moan that they can't afford their lifestyle choice but still insist they should be entitled to it.

Crasp

Snakeblood wrote: »

You aren't losing anything. You're buying a service. Your flatmate is gambling with a mortgage that he will be able to pay, and that he will be able to sell for a profit orr break even.

Benny_Cake wrote: »

But you have the use of an apartment for 5 years. So you're not just handing over money and getting nothing back! I wouldn't be so jealous of your flatmate, the value of apartments in a lot of places has fallen far more than the value of houses.

The question isn't about buying a service or not, it's about buying Vs renting.. it's a sound investment where we are, I am certain they will make a profit on the apartment.

I have the use of the apartment for 5 years, at the end I have nothing. They have the use of the apartment for 5 years, at the end, they still have an apartment!

that's the difference... We bothe bought the same "service"

Benny_Cake

Silentcorner wrote: »

And by the way you are not stuck in the one house, you can rent it out to someone willing to pay the mortgage for you, you can rent where ever you like and still in 20/30/40 years time you have an asset you can sell or live in.

People in other countries rent off someone as well, that doesn't make them smart does it?

We live in a predominantly rural country where we should expect to own a home, for security if nothing else. They will prove to be as reliable as any pension.

My point is, on the balance over a 20/30/40 year period you are better off buying....

It isn't as easy to rent out a place to someone as you might think, especially with a falling population. In some parts of the country it's downright impossible. Also, in a lot of European countries, properties are often owned by large institutions such as pension funds etc, which take more of a long-term view and value stability over simply trying to put the rent up every time the bank raises the interest rate. Makes renting look a lot more attractive that many of our "property investor" landlords do.

amacachi

Crasp wrote: »

The question isn't about buying a service or not, it's about buying Vs renting.. it's a sound investment where we are, I am certain they will make a profit on the apartment.

I have the use of the apartment for 5 years, at the end I have nothing. They have the use of the apartment for 5 years, at the end, they still have an apartment!

that's the difference... We bothe bought the same "service"

If you're certain of a profit then of course it would be stupid to not buy the place, which begs the question, why didn't you? Obviously you realise property prices only ever go up.

Big Nasty

I bought in 2005. I'm in negative equity now to the tune of €120k - well I'm not really because I have no intention of selling in the next 5 years.

Am I sorry? No! On paper it's not my place but in my head it is and I take pride in it. I can't see myself taking the same pride in a place I was renting. It's my home.

It will be paid off in 2040 and by then I will be 65, retired and 'rent' free!

gaeilgegrinds1

I bought my house while very young, always rented it so each and every mortgage repayment until my OH moved in more than covered the mortgage. Now...no mortgage...so no dead money. You can own a house and be smart about it too!

Crasp

opinion guy wrote: »

:eek:
Where've you been ?
I hope you are not studying economics!

At no point did I say it was Ireland anyway!

amacachi wrote: »

Fair play to him/her for making a profit in these times. Also for being in a position to get a mortgage when in college. Out of interest, you do realise that after 5 years probably about 5%, if even, of the principal will have been paid back? Add fees etc. and selling the place at cost price means breaking even. Then again, we all know property values only ever go up!

yes and after 5 years, MY rent has paid for that 5%, and he sells the apartment to pay the remaining 95%.

Snakeblood

Crasp wrote: »

The question isn't about buying a service or not, it's about buying Vs renting.. it's a sound investment where we are, I am certain they will make a profit on the apartment.

I have the use of the apartment for 5 years, at the end I have nothing. They have the use of the apartment for 5 years, at the end, they still have an apartment!

that's the difference... We bothe bought the same "service"

No, you don't understand. He didn't buy a service, he became a service provider at a considerable risk. You became a service consumer. So you didn't 'lose' money, you spent it on a service.

You can be as certain as you like, and you can still be wrong.

"Rent is dead money" - four words that played a huge part in the Irish property bubble.

Crasp

Snakeblood wrote: »

No, you don't understand. He didn't buy a service, he became a service provider at a considerable risk. You became a service consumer. So you didn't 'lose' money, you spent it on a service.

You can be as certain as you like, and you can still be wrong.

He bought the apartment for himself, he needed accommodation. and I'm essentially subsidising it. We are both paying, in different ways, for the same roof over our heads.

He didn't buy it for the purpose of renting it to me.

Kevin Bacon

Deleted User wrote: »

Rent on the other hand is spent with no chance of any return.

Your "return" so to speak is the use of the asset if your renting so you are getting a return on your money the fact that the return is intangible and exhausted at the end of the lease still doesn't mean is has no value. Your return on purchasing an asset, is the continued use and ownership of the asset less the risk of ownership which would be risk of loss on resale and risk of default if purchased with a mortgage which is applicable to nearly all cases.

amacachi

Crasp wrote: »

yes and after 5 years, MY rent has paid for that 5%, and he sells the apartment to pay the remaining 95%.

Again, since the profit is certain why didn't you take on the reponsibility? You and the other person's rent has paid that 5% which will likely be wiped out by early payment charges. So yes, fair play to him/her for getting a few years accomodation for free apart from the responsibility they took on, their relying on two housemates to pay the rent on time every month and not drop out and the certainty there'll be a profit at the end.

Once again, fair play to them for being in a position to get a mortgage when beginning 5 years of college...

Dudess

Silentcorner wrote: »

The people who are now the pro renters have become as obnoxious as the old "our property is now worth..." dimwits

I only started this thread to ask why people use the "dead money" expression btw, not because I view renting as better than buying. Neither is "better" than the other, only whichever suits the individual. Personally I can see the merits to both.
And yep, plenty of people who got a mortgage during the "boom" got a modest one and could afford it at the time, but have now run into hard times through no fault of their own - sickening when they get judged for what was a well-thought-out, workable plan at the time.

amacachi

Crasp wrote: »

He didn't buy it for the purpose of renting it to me.

I assume he intended to rent parts out? Hence he's providing a service.

Crasp

amacachi wrote: »

Again, since the profit is certain why didn't you take on the reponsibility? You and the other person's rent has paid that 5% which will likely be wiped out by early payment charges. So yes, fair play to him/her for getting a few years accomodation for free apart from the responsibility they took on, their relying on two housemates to pay the rent on time every month and not drop out and the certainty there'll be a profit at the end.

Once again, fair play to them for being in a position to get a mortgage when beginning 5 years of college...

I am entirely unsure what your tone is aiming to achieve? But I digress..

As I said, he bought the place for himself. He would have been paying a mortgage anyway, regardless of if anybody was renting or not. He bought his own home. Perhaps he then saw the oppotunity to rent out some space.

I was in no position to buy my own home.

amacachi wrote: »

I assume he intended to rent parts out? Hence he's providing a service.

I am not sure of his intentions, as I said he was buying the place anyway! but ya I can see where you're coming from

Snakeblood

Crasp wrote: »

He bought the apartment for himself, he needed accommodation. and I'm essentially subsidising it. We are both paying, in different ways, for the same roof over our heads.

He didn't buy it for the purpose of renting it to me.

You're not subsidising it. He could be using the money to pay for his coke habit. You're giving him money to live there, and you should divorce that in your head from what he does with the money.

Lawrence1895

Micky Dolenz wrote: »

It's an old saying for old people.

We all need to live somewhere. I bought a house in 09 for a friction of what they wanted and my mortgage is still higher then if I was renting the exact same house. With renting is great freedom, no maintenance worries and you can feck off when you feel like it.

So my OH is 'old'? With 37 years of age?

Never mind...there is that saying in Germany, that you have to move with your job, so renting always was the one and only option for me.

And renting is much more convenient anyway, because of maintenance and stuff like that.

Crasp

Snakeblood wrote: »

You're not subsidising it. He could be using the money to pay for his coke habit. You're giving him money to live there, and you should divorce that in your head from what he does with the money.

I agree, that is one way of looking at it.

melekalikimaka

Dudess wrote: »

sickening when they get judged for what was a well-thought-out, workable plan at the time.

very poor judgement, greed more than anything else if you ask me

Kevin Bacon

Kevin Bacon wrote: »

Your "return" so to speak is the use of the asset if your renting so you are getting a return on your money the fact that the return is intangible and exhausted at the end of the lease still doesn't mean is has no value. Your return on purchasing an asset, is the continued use and ownership of the asset less the risk of ownership which would be risk of loss on resale and risk of default if purchased with a mortgage which is applicable to nearly all cases.

Yes, that's right, I was referring to the fact that your rent money has been spent, you have the use of the house but at the end of the rental period, that's it.

Kevin Bacon

Dudess wrote: »

I only started this thread to ask why people use the "dead money" expression btw, not because I view renting as better than buying. Neither is "better" than the other, only whichever suits the individual. Personally I can see the merits to both.

I would say the use of the phrase "dead money" is a confusion on what your putting your money towards. Renting is paying for a service where as buying a house would be better classified as an investment.

Obviously these are two distinctly different things.

Dudess

melekalikimaka wrote: »

very poor judgement, greed more than anything else if you ask me

A couple who wanted to start a family during the "boom" buying a modest three-bed semi-d in a "middle-of-the-road" area and both in permanent jobs, for instance? How is that greedy?

There's too much chucking people like the above into the same category as people who took the complete piss - it's not one bit fair.