Renters, what is your net worth?

synthetik

This poll is for renters only. What's your net worth, minus any debts or real estate.

The Shugster thinks that all renters are just rats, with no hope of building equity or any type of home debtorship in the future. My assertion is that there are probably a few people here that could afford to buy a home with cash, outright. (and will, when the time is right)

TJ_98370

Would liquid net worth include semi-accessible retirement savings?

synthetik

Yes!

The_Tim

I'm in the "Under $50K" category, but considering that I recently finished paying off nearly $50K in debt (mostly student loans), have purchased both of my last two automobiles with cash, and am now socking away a decent sum of cash every month, I'm definitely not bitter.

I find it difficult to be bitter when I'm kicking back in the living room enjoying movies with my wife in surround sound on our 76" screen, or writing up a blog post using my crisp new 1600x1200 LCD monitor, or wrestling with my dogs, or doing pretty much whatever I feel like doing, buying what I feel like buying, and paying for it all with cash.

Oh, and knowing that I could quit my job tomorrow and easily pay all the bills for 6-12 months is pretty wicked, too.

100% Debt-free, and loving it.

meshugy

That sounds awesome Tim....

Can you explain the free rent thing again. I still don't understand why your landlord won't charge you rent. I think you'll have to admit, that's extremely weird. I'd be a "renter" too if I had a rent free house.

The_Tim

Quoted from here.

The Tim wrote:

We moved into the place when friends of ours moved out. We were originally paying a paltry $250/mo rent thinking we were subletting to the residents that lived here before our friends, but one day the owner came by and said "I don't charge rent for this place." So we stopped paying rent.

That's pretty much the whole story. I don't ask too many questions about it. Something about looking a gift horse in the mouth and all that...

Even if we had to pay rent though, our liquid savings would still be more than enough to float us for a year.

meshugy

Right....I saw that. But why won't the guy charge rent for someone living on his property? That's totally bizzare. Is it some sort of religious cult compound?

Obviously he must have a mortgage, or a least taxes and maintenance to pay. Why would he subsidize a living space for someone he doesn't even know?

synthetik

why would The Tim spend thousands of his own personal time, at no charge, working to help educate people about a housing bubble?

Some people are just extraordinary and do bizarre and strange things all the time.

The_Tim

Those are the kind of questions that I just don't ask. Sure, I wonder, but all I need to know is that I'm living rent-free. There are actually two houses on the property (it's over an acre). He collects a paltry rent from the guy that lives in the other house (it's slightly nicer than ours), but it isn't even enough to pay the property taxes on the land. Heck, for a good number of years, the owner was even paying the water bill for both properties.

Why would someone do this? I have no idea, and I'm not about to go poking around to try to figure out. I'm just going to enjoy it for as long as I can.

biliruben

It may not be up to code. Perhaps he can't charge rent, but appreciates people in the unit, keeping the property up and livable.

Not everyone's obsessed with money.

meshugy

synthetik wrote:

Some people are just extraordinary and do bizarre and strange things all the time.

Cool....can I move in with you?

meshugy

The Tim wrote:

Those are the kind of questions that I just don't ask. Sure, I wonder, but all I need to know is that I'm living rent-free. There are actually two houses on the property (it's over an acre). He collects a paltry rent from the guy that lives in the other house (it's slightly nicer than ours), but it isn't even enough to pay the property taxes on the land. Heck, for a good number of years, the owner was even paying the water bill for both properties.

Why would someone do this? I have no idea, and I'm not about to go poking around to try to figure out. I'm just going to enjoy it for as long as I can.

Are you sure this "guy" isn't your Dad?

Seriously, I think it's great you have a generous benefactor. But I do find it strange that he won't even explain why he's subsidizing your housing. There's something very odd about that...he could at least tell you why. I mean what happens if something breaks? Do you even call him to fix it or do you feel obliged to do it yourself? How could you ask him to provide the normal services of a landlord when he's not charging you a cent.

Also, can I have this guys #?

synthetik

I just picked up some renters insurance. I can't believe how cheap it was! I even got a rider to cover my wife's wedding ring as well.

We discussed the housing bubble and he said he sold in June 2005, then we hi-five'd. Now he's a happy bubble sitter too!

He mentioned that he has a friend that works for Countrywide who told him "you will simply not believe what is going to happen in this country over the next few years."

Either way, I'm LONG the CFC puts![/code]

The_Tim

meshugy wrote:

Are you sure this "guy" isn't your Dad?

Positive. He's just some guy that bought the property from the uncle of the guy that lived here before my friends did.

meshugy wrote:

Seriously, I think it's great you have a generous benefactor. But I do find it strange that he won't even explain why he's subsidizing your housing. There's something very odd about that...he could at least tell you why.

It is indeed rather strange, but I just don't have a burning desire to know why.

meshugy wrote:

I mean what happens if something breaks? Do you even call him to fix it or do you feel obliged to do it yourself? How could you ask him to provide the normal services of a landlord when he's not charging you a cent.

That's something that's been part of our understanding from the beginning (even when we thought we were subletting). We're on our own. If something breaks, it's on us to fix it. The flip side is that if we buy a brand new washer & dryer or refrigerator or whatever, we can take it with us when we leave. Also, we can paint the rooms to our liking, put holes in the walls to hang things, do some interior remodeling, replace a crappy aluminum frame windows with a nice low-e double-paned vinyl window, install light fixtures, have a garden, etc. (all things we have done).

It's pretty much the same as home ownership, except that we get to choose to put our money toward other investments, and we may someday be told to move out. When (if?) that day comes, we certainly won't be sore about it. We've already gotten more than our share of advantages out of living here. We were already on a clear path to financial freedom before moving in, but living rent-free certainly accelerated the plan (oh, and it allowed us to pay cash for my wife to take a year-long program at the Art Institute).

meshugy wrote:

Also, can I have this guys #?

Sorry, no.

synthetik

Tim,

FWIW, it's a great time to start a business when your overhead is low. My first business was a computer integration firm, back in 1988; started from my bedroom at my dad's house.

All I had to pay for was my phone line and a little advertising and I was good to go for 13 years.

Puget Sounder

I'm under $50k in net worth, but that's because I'm 25 and have been working since a week before my 23rd birthday in a "real" job in finance that pays decently -- but I am not making 6 figures. And Mom & Dad don't give any handouts since I'm financially independent -- unlike some of my peers who have gotten down payments and mass payment assistance with home ownership from wealthy parents.

Alan

The rent free situation is bizzare. I have a lot of trouble understanding why someone would do that in the same way I have trouble understanding how current housing prices are sustainable.

I guess I could see someone who is wealthy not wanting to deal with the hassle of collecting rent and doing maintenance. Maybe collecting rent would put him in a higher tax bracket? Maybe he plans to live there at some point so he can get a tax free sale and is just working through his properties? Maybe he is claiming it as a primary residence now and by not collecting rent he can support that story?

synthetik

My grandparents lived rent free for years during the summer in a 3 bd house in Penobscot, Maine.

In payment they took care of the house and chopped and stacked all the firewood the owners would need for the winter (why they chose to live in Penn during the summer and Maine in the winter is beyond me!). In addition, my grandpa took care of the 1/2m road leading up to the place as well as kept the garden, etc.

I have fond memories of that place, truly God's country.

The_Tim

Puget Sounder wrote:

I'm under $50k in net worth, but that's because I'm 25 and have been working since a week before my 23rd birthday in a "real" job in finance that pays decently -- but I am not making 6 figures. And Mom & Dad don't give any handouts since I'm financially independent -- unlike some of my peers who have gotten down payments and mass payment assistance with home ownership from wealthy parents.

Sounds like we're in a pretty similar situation. I'm with you on the no handouts from parents boat. Actually the last $6k of my school debt that I paid off was to my parents.

TJ_98370

Unfortunately, this poll doesn't show age of responders. I suspect that most of those with less than $50K worth of assets are just starting out.

My parents helped me thru college, but upon graduation I was on my own. I remember actually having to go the bank to borrow funds to buy groceries before I got my first paycheck. It's been all up from there.

synthetik

It's been all up from there.

How old are you? I suspect you're in your mid-late 20's. I think if you were to poll the most successful entrepreneurs in the US, virtually none of them would/could ever make a statement like that.

I've learned the most from the mistakes I've made. I'm 37 and went from a net worth of $1M+ in my late 20's to a business Bankruptcy (CH13) in 2001.

Just for perspective, I've started a total of 7 businesses, two of which have been successful (including the current one)

Pride cometh before a fall.

TJ_98370

synthetic,

Let's put it this way, I'm old enough to be Puget Sounder's dad. For me, it really has been all up from college graduation, but I'm risk averse, frugal, and not smart enough to be an entrepreneur.

I congratulate you for your successful business ventures.

downpayment

I think net worth is much less relevant than cash flow these days when it comes to buying - you may have enough to put 20% down on a house, but do you have enough cash flow to make the payments? I wonder how many first-time home buyers find themselves in this situation.

synthetik

Well Shug, I have to say at this point that you were wrong. Looks like plenty of us could afford to pay cash for a home. (although most of us probably wouldn't do that)

We aren't just a bunch of cube-dwelling losers as you stated.