Why would Millennials rather rent a $1500+ studio w granite counters than live w roommates 1st &save for a downPMT

Why live with roommates when they can live with their parents and buy even faster?

Mrr82 wrote:

Why would you assume millennials in general don't live with roommates? You seem out of touch.

I can't believe it took this long for someone to reject the premise, especially when substantial reporting belies it. Here's just one example:

Millenials might annoy their older co-workers and speak, use gadgets, and prioritize in ways that older generations struggle to understand, but they're shaped by coming of age during the Great Recession, and for the most part have made responsible decisions in regard to housing and their living situations. Hopefully they retain this pragmatism as the economy and their job prospects (hopefully) continue to rebound.

80s kid wrote:

..... Housing prices are stupidly expensive compared to median income levels.

Yes, but mortgage interest rates are stupidly low compared to historic averages. I just bought a $1.2M 2bdrm/1ba house in Silicon Valley. My net after-tax housing cost is nearly equal to the cost of the crappy 1bdrm/1ba apt that I was renting.

plog wrote:

The ideal situation is actually owning a property that you can lease out to cover mortgage payments. I currently own a two bedroom and my tenant covers mortgage plus $200 each month.

Dude, you're losing money then. Let's assume you meant mortgage & taxes & insurance. And let's be even more nice and assume the tenant mows the grass. Netting $200 after that is still losing you money.

In 1 year if you lose the hot water heater, call a plumber twice and have to replace a broken window--you've paid out of pocket in maintenance. And that's not even taking into account normal wear and tear on carpet, painting, roofing and all the hundres of little things that will cost your profit.

Netting $200 on a rental home is not profitable.

Sorry, I should have been more clear and said "covers monthly payment plus $200". That is, the tenant covers P&I, taxes, insurance, and HOA.

Also, as others have mentioned, you're forgetting about the fact that I don't have to pay rent. I'm basically living rent free.

Finally, I said that these properties are condos. There isn't a ton of maintenance and the small projects that pop up are cumulatively less than what I would normally be paying in rent.

If you think that paying rent is a better deal than not paying rent, but getting $200/mo plus equity, then you obviously don't know what you're talking about.

Bingo. You'd be amazed how many young, "full time" "professional athletes" come to Boulder and quickly are able to buy a house/condo. They also have plenty of time to train, drink craft beer and get our over coffee at the hip coffee shops.Don't get me wrong, I love all those things too, but housing prices here are fairly expensive (at least for someone like me).

No skin in the game wrote:

Because their parents are going to cover the down payment for their house so what does it matter. If they save it's just less the parents will give.

Why is everyone still so obsessed with home ownership after what we've been though in the last decade?

Anyway, I always find this interesting:

https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

. Clearly home ownership does not equal wealth ...

Anyway, I don't know why people are so judgy for renters ... "Throwing money away on rent ..." Unless you paid your house cash, you either owe your landlord or owe your bank. What freedom!

No skin in the game wrote:

Because their parents are going to cover the down payment for their house so what does it matter. If they save it's just less the parents will give.

^THIS. While I have to pay for everything myself (which is the way it should be), all of my millenial peers are buying houses. I make 3 times what most of them make, they don't save a penny while I save thousands each month, and somehow they can all afford a down payment. I finally started asking how they could afford this because the math was simply not adding up. The answer. My parents helped with the down payment. Every single one of them had their parents buy the house and they pay the monthly premiums. It's ridiculous.

Also, I live in a downtown metro with granite countertops where I moved from a cheap 2 bedroom place with a roommate. I justify it because I can afford it (although the jew in me still has doubts), but the main reason is the living perks. Most are filled with the best amenities such as pool, gym, business center. LOCATION LOCATION LOCATION. I can walk to all the bars and restaurants in the area. And finally, the hot millenial women. Much easier to take them back to and every one that comes back is getting naked.

That's the main sacrifice. If you get a crappier place in a crappier location you can save mad money, but you won't be getting laid as much. I'm biting the bullet on that for now though.

Moral of the story: Women are into men who have granite countertops.

I bought my first house in 2001 for $92k (I live in the midwest). Mortgage payment was $725 per month. Girlfriend moves in, pays me $350 per month. I had been paying $600 per month for an apartment. She was paying the same. We now are both paying under $400 per month. We get married, live here for 10 more years. Save TONS of money, I mean tons. Plus, I write off mortgage interest and a few other things, I end up with a $3k per year tax return! NICE!

At age 39, buy a bigger house -- $220,000. Put $100k down, then paid down another $50k with sale proceeds from first home. Paid rest of mortgage off in 4 years. 4 beds, 3 baths, .6 acres in the city, live next door to a running trail. No problems. No more mortgages. Now on easy street, costs nothing to live. Will stay here forever.

Millennial here. I live in a modest but comfortable two bedroom with a roommate. My share of rent is 7% of my gross monthly income. Many of my peers (mainly women) think I am a loser for being 28 and having a roommate. With all the money I save I am able to max out my Roth IRA every year, spend time abroad every year, do whatever I want (within reason) and never worry about money. I also now have enough to put together some investments in addition to my Roth. If I keep living like this I'll have a net worth of over $100,000 by the time I turn 30 and will have traveled all over the world as well. Plus my roommate is cool and is like a friend I can talk to if I want and avoid if I don't. Not really sure why I would want to trade all that for an expensive one bedroom.

Hjizzy wrote:

Granite Jizz 🤗🤓 wrote:

Why would Millennials rather rent a $1500+ studio w granite countertops/super fancy loft than live w roommates 1st &save for a downPMT?

Just doesn't make sense to me. Why not rent with roommates temporarily and buy within a few years?

I pay $2000/month and have a roommate. Welcome to NYC.

Just moved to Manhattan and I'm paying $1000/month for an apartment in Washington Heights that I share with 2 roommates. I'm trying to find a room in Manhattan for $800 or less. Is my best bet to just make connections with co-workers/friends or will I find anything for that price on craigslist? How would you suggest searching?

The Night Of wrote:

Just moved to Manhattan and I'm paying $1000/month for an apartment in Washington Heights that I share with 2 roommates. I'm trying to find a room in Manhattan for $800 or less. Is my best bet to just make connections with co-workers/friends or will I find anything for that price on craigslist? How would you suggest searching?

Raise your price range. For 950+, you can find a room in Manhattan. Otherwise, look in Queens or other boroughs.

Mrr82 wrote:

Granite Jizz 🤗🤓 wrote:

Why would Millennials rather rent a $1500+ studio w granite countertops/super fancy loft than live w roommates 1st &save for a downPMT?

Just doesn't make sense to me. Why not rent with roommates temporarily and buy within a few years?

Why would you assume millennials in general don't live with roommates? You seem out of touch.

Answer: Because they are immature. Didn't you make impulsive, short sighted financial decisions when you were younger? Or were you born with all the wisdom you have today?

Apulia Station wrote:

Can bang more hotties with own place. Also, buying a house ties one down to a specific location more than renting.

+1

Gotta enjoy your youth, spread your seed, while you're young and unencumbered

By a mortgage. I say go for it.

One other point here, most millennials have monthly payments for college and car loans, before they can even think about a steep monthly mortgage but, never mind even getting approved for another loan.

So party on.

2500 sq ft 4 br on a half acre lot. To rent a similar house in my area would cost 2500-3000/Mo. Doubtful a rented house would look as nice too.

sock puppet wrote:

Runningart2004 wrote:

For the record I rent a 5bd/2ba 2400sq/ft house built in 2011, formal and informal living and dining rooms, granite countertops, all stainless steel appliances, giant back yard, privacy fence. I would buy in a heartbeat if I was actually going to be here for more than 3 years.

Alan

2400 sf but you have 3 rooms you have to furnish yet never use. Who the F wants formal and informal dining living rooms yet you have 5 BR and only 2 bath. Would you use plastic couch protectors like my grammy? We use that room once a year to open presents. It sat unused 364.

This is why I'm hoping the tiny house movement morphs into a smaller house movement.

I could have all I need in 800-1200 sq ft, but no options for building houses that size that are appealing. I.e. Have to go way out in the country or else in unsafe and undesirable parts of town, or a condo or townhouse.

Formal living and dining rooms are ridiculous.

Two things that have been happening since the beginning of time: people complaining about "kids these days," and parents who can afford to do helping their children to buy houses. It's also interesting to see how most people consider the acceptable amount of parental aid to be roughly what they received, with anything more being somehow immoral.

In any event, the math on owning vs. renting is actually really, really easy. It's own every single time IF you're comparing apples to apples AND you're going to be in the same place for a while (closing costs are big). The problem is that most people buy way more house/condo than they were renting, often under the assumption that housing is an investment. The way to think about it is that housing is an investment that appreciates very slowly but pays a very large dividend in terms of a place to live. If you're living in the house instead of renting it, then the entire dividend is consumed.