On Quora, the question “Why do people pay $10, 000 to $100, 000+ per month rent instead of buying a place? ” was asked.
My answer was, obviously aimed at the high-end, but most of the points relate to the whole of the market:
There are various reasons people choose to rent rather than buy. Many of these are just as true at the $10, 000-and-higher end of the market as they are at the $1, 000-and-lower end.
1: They can’t get a mortgage. In order to secure a tenancy, you typically have to come up with about three months’ rent in ready cash – for a mix of deposit, costs, and the first actual rent payment.
In order to buy a property, you might need to come up with a 20% deposit.
Just because you could afford $10, 000 a month rent, doesn’t mean you could come up with $500, 000 in ready cash for a down payment.
2: They expect that property prices will fall.
If you think that property prices will fall 10% this year, would you rather buy a $2m place, and find it lost $200, 000 over 2011, plus pay maybe $50, 000 in mortgage interest… or would you rather spend $120, 000 in rent over the same period?
In my experience, this is more true at the high end of the market, probably because of the financial sophistication of the people who would do such a thing.
Investment advice2002-02-10 00:06:24 by dont
The residual effects of the Enron (ENE) debacle are slowly, but surely, beginning to PERMEATE the investment landscape. In many instances it is hard to know whether the secondary problems are critically severe, or just a case of paranoid investors overreacting to ghosts. In 1997, ENE was a rather ordinary gas distribution company trading at $20/share. In the 1998-2000 period, the stock rocketed to nearly $85/share, because of celebrious views about their on-line commodity trading capabilities, an 18,000-mile fiber-optic cable and ultimately, the perceived 'rewards' from the California electricity crisis. Management gradually succumbed to the temptation to artificially inflate earnings with artful 'financial engineering' techniques and, all the while, they piled up debt and preferred...
Bush tree2002-02-24 17:19:33 by tree-
Brown Brothers Harriman & Co. 59 Wall Street, New York Cable Address
'Shipley-New York' Business Established 1818
September 5, 1944
The Honorable W. A. Harriman American Ambassador to the U.S.S.R. American
Embassy, Moscow, Russia
Thinking that possibly Bullitt's article in the recent issue of 'LIFE' may
not have come to your attention, I have clipped it and am sending it to
you, feeling that it will interest you.
At present writing all is well here.
With warm regards, I am, Sincerely yours,
'At present writing all is well here.' Thus the ambassador to Russia was
reassured by the managing partner of his firm, Prescott Bush. Only 22 and a
half months before, the...
Good Times:Morgan Stanley lost 5 Billion on RE..2010-04-14 13:57:41 by secureourborders
April 14 (Bloomberg) -- Morgan Stanley, once the biggest property investor among Wall Street banks, expects to lose $5.4 billion, or 61 percent, of its $8.8 billion global fund, said a person familiar with the situation.
The firm sent a fourth-quarter update to clients in recent weeks showing the 2007 fund was likely to recover $3.4 billion of its investments, said the person, who declined to be identified because the information isnt public. A spokesman for New York-based Morgan Stanley declined to comment.
Morgan Stanley raised the fund, Morgan Stanley Real Estate Fund VI International, toward the end of the property surge when market prices were at or near the peak. At the time, it was the largest private fund targeting high-return real estate investments.
CIA Executive Director Buzzy Krongard managed firm that handle2002-02-24 19:48:23 by sept11th
CIA Executive Director Buzzy Krongard managed firm that handled PUT options on United Airline Stock
Although uniformly ignored by the mainstream U.S. media, there is abundant and clear evidence that a number of transactions in financial markets indicated specific (criminal) foreknowledge of the September 11 attacks on the World Trade Center and the Pentagon. In the case of at least one of these trades -- which has left a $2.5 million prize unclaimed -- the firm used to place the put options on United Airlines stock was, until 1998, managed by the man who is now in the number three Executive Director position at the Central Intelligence Agency.
Until 1997 A.B. Buzzy Krongard had been Chairman of the investment bank A.B. Brown. A.B. Brown was acquired by Bankers...
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