Denmark Made Home Buying Easier. America Should Follow Its Lead.
Denmark Made Home Buying Easier. America Should Follow Its Lead.
In a cruel twist, millions of Americans are trapped in their homes by low mortgage rates. Denmark's housing market offers a tantalizing alternative.
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Maybe, but that doesn't really have anything to do with what the article is covering.
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The nice thing about owning a home is that you actually build up your saving. If you at some point get in hot waters you can sell your home to get some backup cash.
In a healthy housing market, there's enough competition that renting is much cheaper than buying. Indeed, I remember it being that way when I was a kid. Over the course of my life, landlording went from something that retired people did for a very small additional income stream to a get rich quick scam.
This.
15 years ago, wifey and I talked of selling our home, renting (turnkey), and living off/investing the remaining equity.
Today? Let's just say that "the best laid plans something something...."
As a boomer, one of the biggest "flaws" I see in this irl, is that people won't sell their shit, and their dreams die in their sleep, with them.
Yea, that's true. But I would say that is still better then forking over money into the rent furnace each month right?
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It must be different in different places. I went from a renter in one area, to an owner in the same area, to a renter again in a different area in the period of 5ish years (long story).
Rent in the first area was about the same cost for a two bedroom, two bath, 1000 sq ft apartment as the entire mortgage on a 3 bedroom, 2 bath, 1200 sq ft house, including principle, interest, and taxes. The only reason people would rent there is because they don't have the money for a down payment.
When we left that area, we could have become landlords and rented the house out. We could have easily gotten twice the entire mortgage in rental income, but we felt that being a landlord was unethical (especially since we were relatively wealthy for that area, although we made less than the US median family income). We sold the house and broke even.
Now, we live in a much higher COL area. It's true here that renting is much cheaper than buying, but that's because you can't get a SFH for less than about $1.5 million here. My rent on my 1 bed, 1 bath, 700 sq ft apartment is more than twice my mortgage in my previous area. Our incomes have increased, now we make slightly above the median family income. But our leftover at the end of the month honestly went down a ton. If we weren't here to get an education, we'd be gone by now.
Just saying.... As someone who has both rented and owned, I definitely feel more like I'm shoveling money into a fire as a renter. Owning was the best financial situation I'd ever been in.
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That would be true of landlords didn't also know that and, in turn, redline rent to the maximum tenants can possibly pay.
I don't know about the US specifically, but In Canada, investors big and small have bought up all the rental stock and rents are now maxed out beyond what many people can pay.
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as a renter you aren’t responsible for upkeep/changes to the home
Nobody likes big unexpected costs. That’s why landlords tend to offload the risk to PMCs, warranties, and insurance.
And then your rent pays for the monthly costs of all of that.
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The nice thing about owning a home is that you actually build up your saving.
Thats true in some countries, but not so in all countries. Ownership in some places means simply paying on the interest without any assumption about paying on the principal. A person could still make money if their property appreciates because of market conditions where they could cash out when they sell it, but there's no guarantee on that.
Wait, how do you get a home loan where you don't pay on the principal? That's not even a loan at that point; that's just renting except you also have to pay for maintenance.
We have these in the USA too. Its called an " interest-only mortgage".
that’s just renting except you also have to pay for maintenance.
Lots of things you can do here that you can't do renting:
- Since its you are the owner house you can make any changes you want to it
- If the property appreciates in value because of market conditions, that's YOUR money thats not the landlords money
- You decide who lives in it. Landlord can't tell you no
- Pets if you want them
- no security deposit
- mortgage payment stays the same forever, this "rent" never goes up in price
All of that said, I don't recommend interest-only mortgages in the USA because a home is one of the most accessible investments a person can have with strong legal protections keeping others from taking it from you via legal means.