High enough to buy 1M or 1.5M property easily. He joined 5 years ago, so he has enough down payment.
He could have bought 5 years ago when price was much lower. I’m interested in knowing when he began to analyze rent vs own. Many rent vs own analysts are using it as a vent to cure their hurt of missing the boat. And many of them appear brilliant but never rich. It’s better to appear dumb but make a boatload of money.
Feeling guilty of my ruthless criticism . However this is where free speech has no limit. There is no sensitivity issue when discussing rent vs own.
Yeah, but you are talking about someone who could have easily have bought too. That is why I am not talking about celebrities or one-offs. Many people who owned didn’t have to do anything overtly to become wealthy other than paying their mortgages and taxes on time. The RE did the work for them. Sure, a renter in theory can make a ton of money by keeping a rent controlled place all those years and then properly investing his/her money very wisely in the market. But let’s be honest, the vast majority of renters we probably know aren’t that savvy and are probably living the good life with all that disposable income and are therefore relatively poor when it is all said and done.
I’m sure he’s always been told how special he is. He probably feels entitled to live in Palo Alto. Housing bears always start as would-be buyers who get upset when they realize how non-special they are.
Renters can become a social burden that increases the risk of rent control. I think we should charge a renter’s tax for high income people to pay a rent subsidy to lower income renters. This should be revenue neutral and will defeat the rent vs buy analysts.
Ran the Dropbox guy’s rental calculator on this one. With 3% rent increase per year, and 5% appreciation of home price, with S&P at 8%. I got $2600 as the amount below which renting is better. There is no way this house will be rented for that amount. So, is the house priced attractively?
Schools were about 7 before Greatschools changed their ranking to include vague things like “social xxx” into the numbers. But if you look at test scores, they are ranked at 7. But the scores are getting better and better over the last few years that I have been watching. On the opposite side of Blacow rd, elementary schools are better, so rents could be higher. Also, in Fremont, elementary schools are K to 6th grade.
This is Central Fremont. You can commute to SF, San Mateo, and SV all within an hour. In that sense more reach than Cupertino. It’s almost impossible to commute to SF daily from Cupertino.
The two most important variables are appreciation for housing/rent and stock market appreciation. I think it is OK to assume that house prices and rent will appreciate at the same rate. However, I think it’s nuts to assume stock markets will return anywhere near 10% for the next century. The US stock market had a super run in the last century because it pulled ahead during both World Wars. I’ve read numerous places that a more realistic estimate for next century for US equities is 6%–before inflation! At least for right now, I think the US stock market is due for a correction and don’t expect us to double by 2025 (which is what a 10% annual return implies).
Housing appreciation should be lower than stock market return. Housing is far less volatile and therefore should return less. If something is both less volatile and returning more investors would flock to that asset class, raising its price and thus decreasing its future return.
We may have already seen that played out in Bay Area. People have bid our housing price so high that medium term appreciation may actually be lower than long term trend.
If you think stocks would only return 6% you would need to dial the housing appreciation rate way down as well.
. However this is where free speech has no limit. There is no sensitivity issue when discussing rent vs own.
