The new rentership society.

Wired has an editorial about ‘rentership society‘, the growing inclination for people to rent items ranging from houses to cars to music instead of owning.

For renters today, finding a new apartment on craigslist is almost as easy as streaming a movie. (OK, not quite, but you get the point.) Homeowners don’t reside in this frictionless economy: They’re stuck in one place, unable to quickly downgrade to a cheaper residence when times are lean (or upgrade when times are flush). And it costs thousands of dollars in renovations to beat the depreciation curve.

I speak from experience. My wife and I bought and sold two condos during the latter stages of the real-estate boom, escaping both as break-even propositions (after transaction costs). When we moved into a rental apartment a couple of years ago, we realized that ownership had been a burden, a time sink, and a money pit. Now we ask the landlord to fix things when they break, and we don’t mind that the floor is not the one we would have chosen. We pay less each month than we would on a mortgage, and we bank money that once would have gone into installing central air.

As many markets see asset deflation on houses and condos does that affect a societal preference for owning or renting?

..Oh and I’d be very interested in a Vancouver style car rental.  If anyone can find out where I can rent a car for half the cost of owning it and leave all the maintenance responsibility up to the owner please let me know!

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DMW
DMW
9 years ago

There's a lot of argument and a lot of bad math going on here about rent vs buy. Two points – first it is highly dependent on your personal circumstances. There are no iron rules. Second, there's a calculator (no, NOT the ones on the bank websites) here – http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca018… that pretty much nails it. Note that even this calculation requires you to predict the future.

crabman
9 years ago

@ulsterman: When doing buy/rent analysis, you shouldn't include principal pay-down as a cost. But the biggest variable is expected appreciation. When this number is high enough, it always tells you to buy. Try using an expected appreciation of -5% (or even 0%) and see what it tells you.

realpaul
realpaul
9 years ago

A year of pounding the media with the poverty file has finally been turning up results. The middle class poverty story has finally become the lead story…..I guess the hungry kids made the angle 'sexy' enough to report. Too bad they haven't dug into the seniors poverty result from the ZIRP…. I guess starving seniors aren't sexy. People obviously respond to stories about their neighbors going hungry and having to line up at the food bank. Trouble is…the press is grossly underestimating the numbers and misinterpreting the reasons why…..still downplaying the outrageous mortgage and personal debt. Its sexy to think that you're doing better than your neighbor as you slop bucket KD another day and send your kid to school hungry. The idea that some one else in in even worse shape is sexy….that 'home ownership'…….ya ..thats sexy. It took… Read more »

Bilbo Bloggins
Bilbo Bloggins
9 years ago

Ya renting beats the bejeezus out of owning in Van right now

But what kind of dumbass compares renting a home to Netflix-ing

a video. I Netflix b/c I don't want to watch Anchorman

one a week.

Bilbo Bloggins
Bilbo Bloggins
9 years ago

@vreaa:

If it's "untold" wealth, why is it on a blog?

vreaa
9 years ago

Dunbar House, from Larry's blog

$548K in 2000, $2,468,000 in 2010

Larry's Opinion: “You have to take a deep breath and realize that the world you thought you knew is not as it appears. You must understand and accept that there is untold wealth that exists within our city. A paltry $2.5 mil is chump change. What we are experiencing now is only a beginning.”

http://wp.me/pcq1o-1xQ

ulsterman
9 years ago

OK, now it's my turn for a dumb question. When doing a rent vs buy analysis do i compare the rent amount to just the interest component of the mortgage payment? Is the part that i pay that is considered principle "paying myself"? I realise that i have to include the taxes and upkeep too and opportunity cost of the downpayment.

I've played about with the various calculators and even with the crazy prices we have today they regularly tell me that it becomes better to buy after a number of years.

ulsterman
9 years ago

An absolutely idiotic statement from the Canadian Business article in post 98:

"Historically, home prices have rebounded and then some about a year or two after a decline, and some major markets that had incredible runs — such as Vancouver, Calgary and Toronto — are now all of a sudden relatively affordable for first-time homebuyers"

That's right, Vancouver is all of a sudden relatively affordable for first-time buyers. Do these journos actually do research before writing?

Keeping An Eye on Th
Keeping An Eye on Th
9 years ago

"And make no mistake, change is coming to Canada's real estate industry"

"Travel agents and stockbrokers are nearly obsolete thanks to the Internet – are real estate agents next?"

http://www.canadianbusiness.com/managing/strategy

gigo
gigo
9 years ago

garbage in garbage out http://www.wired.com/magazine/2010/11/st_essay_ow… Posted by: designguybrown | 11/3/10 | 3:18 pm | Do you ever get the feeling that many of these Wired articles are not really thought through or whether the author really believes what they are writing or that all the bloggers are younger than 23 with really little sense of the bigger pictures and other such life complexities? -or maybe they are articles not designed to inform or educate but to encourage rebuttal and response. Hmm Posted by: deadkennedy | 11/3/10 | 3:46 pm | This article has one good implication. I see people are slowly figuring out what kind of crap Wired articles are. Posted by: sic77 | 11/3/10 | 4:04 pm | You are acting like a 20-something with a severe fear of responsibillity and commitment. I can’t believe you get to write… Read more »

vomitingdog
vomitingdog
9 years ago

I like the way everyone is voting everything down now instead of up. Soon all the comments will disappear as will the blog itself.

Now, vote me down.

Keeping An Eye on Th
Keeping An Eye on Th
9 years ago

"CKNW is running ads about classes to learn how to get rich buying real estate in the US."

Have you noticed how much of their advertising comes from the loan sharks? Sometimes it goes on for 5 minutes back to back- no credit, bad credit, no problem.

Yes, Bill Slut and company, count heavily on the cash strapped.

SquareNinja
SquareNinja
9 years ago

@Renting: So you get 8 times the asset value in a condo lease compared to a vehicle lease for the same $1000 monthly cost.

Exactly!

That means renting is dirt cheap.

I don't know why everyone in most "Western" countries are so obsessed about owning real estate, anyway. People in many parts of Europe have rented their entire lives and will continue doing so. Yet, they've lived in the exact same apartment since they were born… and they've put substantial amounts of money into renovating what they don't "own".

Is that part of the reason apartments with a land-lease in Vancouver are about half the price of their non-land-lease counterparts? Oh shit! The land lease is up in 2073!! That means you don't own it!!!

patriotz
9 years ago

@Best place on meth:

There are only two kinds of housing:

Affordable housing, and empty housing.

Best place on meth
Best place on meth
9 years ago

Thank god those laneway houses are succeeding in achieving their stated purpose "to try to create more affordable housing".

http://vancouver.en.craigslist.ca/van/apa/2058524

Renting
Renting
9 years ago

I noticed some of the usual BC real estate shills focusing on the US lately.

Michael Campbell has called a bottom in the US and advises now may be the time to buy. Ozzy Jurock is now teaching how to invest in the US real estate market instead of BC. He seems to discuss it every time he is on the radio. CKNW is running ads about classes to learn how to get rich buying real estate in the US. I can see all the specuvesters heading South soon. That may mean dumping property here or at least not buying anymore.

Junius
Junius
9 years ago

#67 Miracle,

if you are looking for books on the problems with Capitalism read John C. Bogle's works including "The Soul of Capitalism" and "Enough". I believe he has a new one out as well.

He invested Indexed Mutual funds and ran the Vanguard Fund for many years. He is a capitalist at heart but has major problems with the current state of the financial service sector and beyond. He is very ethical and extremely credible.

Anonymous
Anonymous
9 years ago

The world’s most overvalued real estate

Canada @ #7

http://money.ca.msn.com/banking/homebuyersguide/g

NO-LYMPICS
NO-LYMPICS
9 years ago

This is why the Asians are beating the Western Economies

Superior customer service

http://www.youtube.com/watch?v=QgCOnPeyCpA

PS Supraboy and superduperbulltime..is that your mother at the end?

paulb.
paulb.
9 years ago

New Listings 170

Price Changes 80

Sold Listings 143

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

"Consumers are responding to a double-dip in mortgage interest rates," Muir said. "While housing demand waned in the province through the spring and summer, the added purchasing power from low borrowing costs combined with gradual improvement in the B.C. economy has trended home sales higher in recent months.

http://ca.news.yahoo.com/s/12112010/72/bc-victori

Yeah ok Muir, low interest rates, and an improvement in the economy…..

That's a combo that's guranteed to continue.

I think Muir, Bill Slut, and Rennie should head to greener pastures, I read Hong Kong is pumping a nice bubble.

And I wish they would take turds Jurrock and Tsur with them.

NO - LYMPICS
NO - LYMPICS
9 years ago

@Miracle:

Re Rifkin…he was on 60 minutes a while back.back then he seemed to garner quite a following.

My view of the future is not at all positive.

Historically, in troubled times like these, we had a Depression, World War and/or both.

I hear on the news we can expect a rather cold winter, which flies in the face of the Global Warming whackos who lead many astray.

We are bereft of leadership, we have nothing but clowns in positions of responsibility aka "the Emperor/s have No Clothes".

Unfortunately, it will be every person for themselves….we as a society can't afford to maintain what we think we have .

Renting
Renting
9 years ago

Comparing a Zip car to owning a car is comparing apples to oranges. Yes a Zip car may be a good choice for some but it is not the same as owning. Leasing a car would be similar. To use the car analogy lets compare what you get for $1000 per month with a vehicle lease compared to a condo lease. For a car lease you have to cover insurance, damage, brakes, fuel, etc. For a rental condo you get the property taxes and maintenance fees included in rent so we have to deduct those. A nice 1 bedroom downtown condo rental is about $1000 net ($1400 rent minus $400 property taxes and maintenance fees paid by the landlord = $1000). This condo would be worth about $400K to buy. For a $1000 vehicle lease you get about a 50K… Read more »

Anonymous
Anonymous
9 years ago

The rate hikes are on, as expected.

TD raises 25 basis points today.

http://www.canadianmortgagetrends.com/canadian_mo

NO - LYMPICS
NO - LYMPICS
9 years ago

re the link to Commercial RE and its collapse:

One of the points it made was people's ability to work from home via modern technology.

We know a few people(NOT self-employed) doing exactly that, their companies let them work at home.

I can see more and more of that. That could lead to a lot of commercial vacancies, and the zoning become redundant.

When you figure to cost for transit, car or via public transit, the time wasted to and from work, people could realize major savings…maybe even make having children more affordable.

The kicker of course is how Gov't will maintain its pound of flesh…