Is renting when you're young REALLY a waste of money?

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Once you mortgage unless you have wealth you're a slave. Yeah sure if you lose your job and miss your rent you face eviction but a mortgage ties you down so much, you'll spend the next 20 years of your life in stress. Oh and, if you buy a cheap house because 'well it's really cheap' and then you can't get a job because the reason houses are so cheap is because the industry is shrinking. Have fun stressing about it forever.

Reply 21

Josyb

Im your own place you can walk around naked. Can't put a price on that. The air blowing through

Reply 22

Roving Fish

Original post by sr90

Depends what your circumstances are and where you live.

Lets assume someone is fresh out of uni and wants to start their career in say, Finance. If their parents live in or around London then the obvious thing to do is to move back home and save up, as renting would be throwing money away. However if the family home is from some random village in Devon, they're going to have to move if they want to get anywhere. Moving to the city will give them a base to start their career, so renting is not a waste of money.

Personally i've rented for 6 years and have no regrets. I now live up north so i'll easily own a property by age 30.

Agreed -

My options were to start renting in Birmingham or another big city, or move back to my parents in a village in Cornwall.

Clearly my career is greatly improved by the fact I'd be earning about £4k less living in Cornwall and there is no real design industry neither big corporates there.

I like the freedom of being able to move every year, certainly helpful when you're moving fresh into the city and don't know the areas terribly well. I'd be looking to own a home by the time I'm 30 I'd say.

Reply 23

uberteknik

Original post by RogerOxon

House prices can go down. If they do significantly, and it has happened before, then you're losing borrowed money - a double whammy.

Bad investment decisions often come from thinking that prices only go up.

That's for sure.

Which is why house purchase is not a short term decision. The people who speculate to make money will at some point lose when they get the timing wrong or an upset hits the economy to throw the calculations into confusion.

I did qualify my statement with the caveat 'in the current financial climate'.

The markets are anxious with Brexit, but I have no doubt the UK will make a success of it whether we stay in or not. With that, the long term property valuation will always keep pace with the low end mortgage market where mortgage lending is set to the level of new buyers multiple of average income for a geographic loacation and forced by interest rates.

I have witnessed mortgage interest rates as high as 17% and whist that killed the housing market for a few years with recession and negative equity for some, those that could ride it out are rewarded when the market picks up (and it akways does) because a new generation drives demand once again.

I stand by my original assertion. ( I bought my first home at 22 and have owned ever since. I am now on my 5th property).

(edited 7 years ago)

Reply 24

username2384435

For young people, renting FTW. You can move pretty much whenever you want/need to. If you're starting a family though, buying it is probably preferable.

Reply 25

yudothis

I would rather rent than put all my in the mortgage, and invest it instead.

Reply 26

SirMilkSheikh

A much better option is to buy a camper van and live in that for a year or two.

Reply 27

Reue

Original post by uberteknik

Renting is dead money

Unless the interest on your mortgage is more than a comparable property rent would be.

Reply 28

RogerOxon

Original post by Reue

Unless the interest on your mortgage is more than a comparable property rent would be.

Property ownership costs are more than just mortgage interest. Maintenance (time and money) and (buildings) insurance are not trivial costs. You are also risking capital (which can go either way) - it's not unheard of for a house's value to fall by years' worth of rent.

One reason that I wanted to buy was to be able to do work on my property. I don't know what I was thinking :wink:

Reply 29

Saoirse:3

What middle-class **** is this where they think we're all renting out of choice rather than cause we, you know, need somewhere to live cause our parents can't support us into our 20s/30?!

Reply 30

RogerOxon

Original post by StormCommando

I'm using some money a passed relative left over to do up a boat he also left, and I'll live on that.

That can be a good solution in some places, e.g. San Francisco Bay area. However, BOAT - Bring Out Another Thousand :eek:

Reply 31

StormCommando

Original post by RogerOxon

That can be a good solution in some places, e.g. San Francisco Bay area. However, BOAT - Bring Out Another Thousand :eek:

Good acronym that! Very accurate :biggrin:

However it's a tug, only 11.3m LOA so again - a floating caravan. The costs will be in getting the hull blasted and recoated, but overall it will be a fairly cost-effective and fulfilling exercise when compared with the cost of housing these days. Easily at least an order of magnitude cheaper.

Reply 32

ThePricklyOne

I rented while travelling round Europe in my gap year. It's brilliant for the freedom it gave me to stay if I want or up sticks and go live somewhere else.

I hope to have a mortgage in the future to have some protection against rent rises and dodgy landlords, but if I get the travel bug I could rent my place out and spend the money renting abroad.

Renting and buying are both good.

Reply 33

sherbet_lemons7

Must be nice to have the choice! :erm:

Reply 34

username1740449

Well what's the alternative to renting in order to supposedly save up, living at home? Hah.

My parents are literally 9 hours away from the nearest university. They also only earn £14k per year so they aren't really in a situation where they can financially support me. As for buying, why do you guys think I rent? Buying under the age of 25 is near impossible and saving up for a mortgage will take forever.

I also don't like the idea of being 'tied' to one place. Anything can happen and I don't want to be stuck to a location like a ball and chain.

Reply 35

Michiyo

I understand that renting can be seen as a long-term waste of money; however, I believe it is a practical solution when you do not have much money or when your parents are too unbearable for you to live with. It also has the benefit of freedom.

Say you or your parents do not earn much; 16000 pounds a year, maybe. There is no way in hell you would be able to afford to buy a house with such a salary and your parents would not be able to support you financially. If you save up enough money, I guess it would be feasible, but not in the short term. As such, in this case, renting is the cheapest and most realistic option.

To exemplify the second case, I moved into a rented flat at the age of 17 because my parents were so mentally and emotionally abusive that I became suicidal when I was 11. I have had two suicide attempts because I could not handle living with my mother anymore and just wanted out. The only way I could have stayed with my mother would have been at the cost of my sanity and even life if I went completely insane and killed myself. I would rather pay with cash than with my sanity and life, hence why renting was not a waste of money.

If you want more freedom as a young adult, renting is the way to go if you cannot afford a house.

To answer the question, renting is not a waste of money. Unless you are somehow rich enough to buy a house when you are young, in which case you would probably have a house already.

To be honest, renting is not a choice for many of those who rent.

(edited 7 years ago)

Reply 36

Ladbants

Why would someone want to rent from someone else when they could buy their own house? And live on their own land

Reply 37

fat_pam

It's stupid to rent (if you can choose not to).

That money could be better invested in equities, where in 4-6 years the market will hopefully double or even triple your money if you buy in at the right times. For example I currently have £30,100 in the stock market, I have made £3500 over the last year in capital gains. All my dividends (which are right now, £1300 a year) get pushed back into buying more equities. So this compounds over time.

In 4-6 years, by me putting a £1000 a month into the market, the value of the portfolio will surpass £170,000+

Reply 38

abc:)

I don't understand people's obsession with owning a house? Can someone please put me straight on this, maybe it's cause my Mum rented the whole time I was little. I'm 24, and I rent, and have no plans to save for a mortgage any time soon.

I just don't see why people care. Especially young people (i.e. most on TSR) - why do you want a house to tie you down? Why do you care about it?

Someone help me out - convince me!!

Reply 39

fat_pam

Original post by abc:)

A house is an asset, a liquid asset.
When you own things like property, gold, stocks or bonds, you know there will always be a buyer ready to buy.

It's a form of security in a way, when **** hits the fan, you can always sell the house and downsize, free up some money in a way. Though selling the house for that would be the last resort.

For example I currently have £30,100 in shares, I'm a finance phd student so I can invest without getting burnt in the market. I keep shares because they have great income and growth potential and are extremely liquid. I can find a buyer straight away as long as the market is open.

Gold is similar and so are bonds, people are willing to buy them in the future.

So all in all, it's good to own appreciating, liquid and productive assets.

p.s. gold isn't a productive asset but is very liquid and generally appreciating. I avoid gold for that reason of it's lack of productivity.