from the expectations-are-pre-arranged-resentment dept.
Arthur T Knackerbracket has processed the following story:
We aren't very good at predicting what will make us happy. That is one finding from a study by Basel economists. They investigated the effects of purchasing a home on life satisfaction. The positive effect on happiness did not last as long as people expected.
A big yard, more space, or admiration from family and friends; the reasons for home ownership may vary, but the goal is the same: ultimately, it's intended as an investment in happiness. Prof. Dr. Alois Stutzer and Dr. Reto Odermatt of the University of Basel's Faculty of Business and Economics examined whether home-buyers' expected increase in life satisfaction actually materialized following their move into their own four walls. Their results are outlined in the Journal of Happiness Studies.
The authors evaluated the statements of over 800 future home owners in Germany as recorded in the German Socio-Economic Pales (GSOEP). The dataset contains information about people's expected and actual life satisfaction. On a scale of 0 to 10, respondents were asked to evaluate their current level of happiness and to predict where they would fall on the scale in five years. Results indicated that homeownership does, in fact, result in increased happiness, but not to the extent predicted by the future homeowners themselves.
[...] "Adaptation has a relativizing effect on life satisfaction. People generally anticipate it, but they underestimate it," Reto Odermatt says. "When predicting future life satisfaction after moving into their own homes, on the other hand, people seem to disregard adaptation entirely." Accordingly, participants overestimated the medium-term added value of homeownership.
[...] "In economics we generally assume consumer sovereignty. In other words, that we know what's good for us," not the researchers. This study, however, shows that people may wrongly estimate the happiness factor of a decision, thereby not acting in their best interest.
In order to combat this tendency, it's worthwhile to examine one's own values, especially before making major decisions. "Material values tend to be overestimated and often lead to incorrect prognoses. Intrinsic values therefore seem to be a better compass on the search for happiness in life than extrinsic values," the economist concludes.
(Score: 4, Informative) by EJ on Tuesday September 27 2022, @08:21AM (8 children)
There is no "magic bullet" for happiness. If you can't be happy with what you have, then you'll never be happy with what you can get.
There is most definitely logic in looking to remove things in your life that make you miserable, but thinking "if I just had a GF/BF, I'd be happy," or "if I just had a new car, I'd be happy," or "if I just won the lottery, I'd be happy" is delusional.
Sure, "if I didn't have cancer (or other disease)" is a realistic thought, but that's REMOVING a bad thing rather than ADDING something you think will be good.
Home ownership is still a very good idea. You end up paying less each month, have a STABLE monthly payment (no worry of rent increase), and even can deduct some of the interest in many cases. It does add some extra responsibilities, but it's all worth it in the end. Renting is just an awful way to live.
(Score: 2) by inertnet on Tuesday September 27 2022, @10:30AM (4 children)
Plus you get to leave behind something substantial for your kids, eventually. That's ultimately no benefit to yourself, but definitely adds to your own happiness.
(Score: 3, Touché) by JoeMerchant on Tuesday September 27 2022, @10:53AM (3 children)
You never heard of reverse mortgage?
🌻🌻 [google.com]
(Score: 2) by inertnet on Tuesday September 27 2022, @11:03AM (2 children)
No. I assume it's a way to steal from your children? How could that improve your happiness?
(Score: 4, Touché) by JoeMerchant on Tuesday September 27 2022, @02:33PM (1 child)
You haven't met my father....
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Tuesday September 27 2022, @11:57PM
> You haven't met my father....
Sorry to hear that. I have noticed some bitterness in your posting, I guess this has something to do with it.
(Score: 4, Disagree) by epitaxial on Tuesday September 27 2022, @03:28PM (2 children)
Yep all this is great.
Oh terra cotta sewer line collapsed, well there goes $12k to dig up the yard and basement. Oh time for a new roof, sure another $10k. 20 year old furnace has a bad plenum? Oh look another $8k...
(Score: 4, Insightful) by JoeMerchant on Tuesday September 27 2022, @04:35PM
You know, sometimes those big repairs really are necessary, but in my 25 years of home ownership I have found that most major proposed repair expenses (most being something around 60%) are actually un-necessary, exaggerated conditions, inflated perception of problems leading to a big payday - usually for the person evaluating the need for such work.
OMG I saw a termite! Oooh, yeah, look here, mud tubes leading from the soil up to the attic. Option A: multi-thousand dollar termite treatment, tent the house, bathe all your possessions in Vikane or similar poison gas - oh, don't worry, it's perfectly safe, that's why you have to evacuate for 3 days, and would you care to sign up for our continuing contract insurance plan? Option B: can of spray insecticide with a tube and needle, inject a bit at the site of concern: $5 once every 3-4 years. My first house I took Option B, and never had the dreaded "termite eruption" that the sellers of tent treatments love to talk about. Attic and other wood in the house was perfectly fine on inspection post sale. Interesting twist: there was a remodeled window installed in one corner of the concrete structure that had a crap-wood frame, it wasn't until we had fully moved out and were spending a little time in the empty room that we noticed that that window-frame was 80%+ consumed by termites and was probably the primary source of flyers we had seen over the years. Roof/attic, termite free (except for the old subterranean infestation that never returned), wood floors, joists, etc. also 100% termite free, but crappy new wood window frame mount: toast. Buyers were already planning to replace all windows anyway... odds of them using good wood in the new window frames? Yeah, not high.
We were selling another house and some prospective buyers (using their Uncle the Real Estate Professional as their agent) bid $20K below asking. We said no thanks, asking is asking. They said "O.K. we'll pay asking, we just want to do some inspections." Only inspection they did was to pull a toilet, drop a fiber optic camera, take some fuzzy pictures, and declare the foundation "cracked" will be needing repair, care to guess the cost of this repair? $20K on the button, imagine that, and they'll just be knocking that off the payment if we move forward to closing. Oh, honey. These problems were common in the area, it was a legitimate concern, but they never shared any definitive photos, everything looked like normal 50 year old cast iron pipe, in quite good condition, actually, for 50 year old cast iron pipe - probably another 40+ years of service life remaining. But... having found this "problem" now we're obligated to disclose to future prospective buyers... Or... we had our Real Estate agent, who let them do this inspection without even bothering to be present at the time, do a followup inspection of the same type with a different company (there are only a few in the area), and... guess what? That company found no problems at all. Oh, and the prior inspectors just slapped the toilet (in the guest bath by the front door, most likely to be used by any future prospective buyers), back in place without a wax-ring seal... people can be really shitty.
🌻🌻 [google.com]
(Score: 2) by EJ on Tuesday September 27 2022, @11:27PM
Amortized over the life of the house, those repair costs are nothing. That's why you have a savings account where you put the extra money you would be paying in rent and taxes.
"Oh. My rent went up $500 per month? Well, there goes another $6k per year down the toilet."
"Oh. My landlord wants to sell his house? Guess I have to move."
Also, you must be the unluckiest person on the planet to have all of that happen in the same 5-year period. You also must not have had a decent home inspector prior to the purchase.
(Score: 4, Insightful) by bradley13 on Tuesday September 27 2022, @08:33AM (12 children)
They have weird reasons for buying. Big yard? Space? You can always rent a house instead of an apartment. Admiration? You shouldn't be spending that kind of money (only) for shallow reasons.
Reasons to buy a house: Independence: It's yours, you are not beholden to a landlord or anyone else. Long-term view: You can change, renovate and invest in the place - which you won't do for a rental.
Finally, happiness is not "permanent". When your life situation improves, you are immediately a lot happier, but this levels out over time. So asking people after five years if they are still ecstatic about owning a home? Well, no, they aren't - their happiness level has asymptotically returned close to where it was before. That's how emotions work.
Finally, too many people underestimate the potential downsides of home ownership. There are a lot of costs - utilities, taxes, insurance, etc.. And maintenance. Over the lifetime of a property, maintenance averages around 1% of the value per year. So a $500k property will cost $5k/year to maintain.
You also wind up doing a lot of maintenance yourself: You can't just call the landlord when your faucet drips or your door squeaks. If you enjoy that kind of thing, great. If you don't, either your house will fall into disrepair, or you will be paying even more money to fix all the little stuff that goes wrong over time.
Everyone is somebody else's weirdo.
(Score: 1, Touché) by Anonymous Coward on Tuesday September 27 2022, @09:45AM (7 children)
Are you really under the illusion that you aren’t paying all of those expenses when renting? You are, they’re just bundled into the cost of rent.
(Score: 2) by bradley13 on Tuesday September 27 2022, @10:38AM (6 children)
Sure you are, indirectly. The thing is: you often see people saying something like "I'm paying $2000 in rent every month - I would rather pay $1500 in mortgage." Which doesn't work that way at all. If they get a mortgage payment of $1500, their total expenses will be a lot higher than their rent ever was. People really underestimate the costs of ownership beyond the mortgage payment.
Also - and relevant right now: Mortgage rates change. When they were down, renters here were screaming "unfair, unfair". However, rates are rising fast, and renters will suddenly be very glad that landlords cannot just pass those costs on.
Everyone is somebody else's weirdo.
(Score: 5, Touché) by looorg on Tuesday September 27 2022, @11:04AM (2 children)
Where is this magical place where landlords can't pass their increased costs onto the renters? I have never met a landlord or rented an apartment where the rent have not increased every single year.
I guess that is the main difference is long term, it's not like renters don't have headaches from their living either, as eventually you will pay off your loan and own your property (*). Not that it will be free to live then or anything but still your rented apartment will never be yours and the rent won't ever go down. It will just increase. And you get nothing for it but temporary roof over your head.
(Score: 1, Disagree) by khallow on Tuesday September 27 2022, @11:15AM
(Score: 2) by JoeMerchant on Tuesday September 27 2022, @03:14PM
I rented from a nice Cuban family (some time after signing a year's lease, I found out the man of the house was spending a few years in Tennessee - at a Federal Correctional Facility - something about sketchy paperwork surrounding their now defunct "used car" business).
Anyway, nice apartment in a BIG property in a neighborhood of BIG properties just a couple of blocks from not only University campus, but also on the side of the Engineering building - it was literally the same distance from my office as some of the on-campus dorms... While "at large" rent for a similar apartment was running $550 - in locations far less desirable, I rented this place for $300 or $350, I forget. When I went away for the summer, I negotiated a $100/month rent decrease since I wasn't there and utilities were included... Rent did not increase after the first year, but... about 3 months after I got a "real" job, about 1 month after my brand new sports car showed up in the parking area, yeah, then rent did increase to $425 per month...
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Tuesday September 27 2022, @12:09PM
I recently bought a house after renting for several years. My mortgage rate is locked in against increases (but if they happen to drop below what I'm paying now I can refinance and get that better rate). The rent on the apartment I just left is going up 15% this year/ My mortgage payment is half of what I was paying for rent, and it won't increase regardless of how high interest rates or inflation go.
And, you're naive if you think "landlords cannot just pass those costs on". Do you really think they're going to empty their 401(k)'s or their children's college fund just so you don't have to pay what it actually costs to maintain the property?
The main difference between renting and owning is who gets the "profit" from your living there. If you rent, your landlord gets the profit. If you own, you get to keep the profit.
(Score: 2) by EJ on Tuesday September 27 2022, @11:30PM
You must be very bad at math.
Instead of paying $2000 per month in rent, you pay $1500 for your mortgage, then put the extra $500 in a savings account for when repairs need to be made. That adds up to an extra $6000 per year into savings that the renter won't EVER have, not to mention the tax deductions for interest.
(Score: 2) by Reziac on Wednesday September 28 2022, @03:59AM
Back when I was a homeowner, I worked it out. Taxes and insurance added the equivalent of 5 extra mortgage payments.
This did not include replacing the roof (wind damage, insurance only paid a fraction of the cost), replacing the deep well pump, and other random adventures in plumbing and heating, that amortized over the years I owned the place, totaled up around another two mortgage payments annually.
All in all, it was about half again more expensive than when I've been a renter.
And there is no Alkibiades to come back and save us from ourselves.
(Score: 1, Insightful) by Runaway1956 on Tuesday September 27 2022, @10:44AM (2 children)
That nails it. Want to plant a hedge? You don't need anyone's approval. Cut a tree down? Ditto. Paint the house bright yellow? Or, dull green? You ask no one, you just do it. Garden? Do it your way. Build a new shed? I need no one's permission. The tax assessor will take notice, but I don't need her permission to build it, or to alter it.
The only approval I need, is that of my wife.
Asking permission to do anything is for children.
(Score: 4, Touché) by JoeMerchant on Tuesday September 27 2022, @10:53AM (1 child)
>You don't need anyone's approval.
You will be wanting to avoid these letters at all costs then: H O A
🌻🌻 [google.com]
(Score: 0, Redundant) by khallow on Tuesday September 27 2022, @11:16AM
(Score: 3, Interesting) by JoeMerchant on Tuesday September 27 2022, @11:08AM
>You also wind up doing a lot of maintenance yourself
All in all, I prefer self maintenance to accepting whatever someone else thinks is good enough.
We paid for a total bathroom remodel in 2006, $8k for other people's labor on top of $2k for fixtures, tile, paint, etc. They cut corners I wouldn't have and we ended up with an expensive repair where the shower curtain bar ripped out of the wall too easily. $8k and the one thing we didn't get OCD about: a trim piece around the toilet supply line, they supplied us with the cheapest possible part which rusted horribly within less than a year, and built in such that the drywall, tile and supply pipe to the toilet would all have to be destroyed and rebuilt to replace the $0.25 part.
But... It was all done from demolition through final paint within 2 weeks (promised to be 1 week, but no performance guarantees in the contract of course).
Compare to our present kitchen remodel self build (in part because contractors are impossible to hire lately)... We love how everything is done so far, but it was 4 months with no dishwasher, and we still have 16' of wall and shelves to replace.
🌻🌻 [google.com]
(Score: 4, Interesting) by Nuke on Tuesday September 27 2022, @09:06AM (4 children)
I understand that the housing scene is very different in Germany from that in th UK where I am (it is probably different in every country). In the UK, landlords are mostly crooks, and are always arseholes. If you enjoy dealing with their shit you will be happy renting - otherwise everyone buys, if they can.
(Score: 3, Interesting) by JoeMerchant on Tuesday September 27 2022, @10:45AM (3 children)
>landlords are mostly crooks, and are always arseholes
Goes with the occupation. If your landlord only has a single rental property, you might get lucky and have a decent human being who hasn't been burned by bad renters and is financially secure, handy with repairs and maintenance, and has plenty of free time to maintain both their own home and yours, and doesn't mind charging you substantially less than market rate.
I talked this through with a friend who rented their former house instead of selling for a few years. When a light burns out, or something similarly simple happens in the rental, do you fix it yourself or pay someone else $50 over and above the cost of repair to fix the simple thing for you? If you fix it yourself, now you are maintaining two houses instead of just your own, plus the added hassle of communication and scheduling with the renters for the repairs. That doesn't scale. If you just accept that these minor repairs come less than once a month, factor the $50 into the rental cost and hire someone to do them, now you have a scalable business where you can expand to enough rentals to make management of the maintenance and other issues your full time job (which pays a great deal more than a typical salary) and when you are ready to retire you can sell off the properties, pay off the mortgages, and you will have built up a very nice nest egg in 15+ years.
Of course you don't make a business like this work without charging enough to pay others to do basically all the maintenance and also charge enough to expand the number of rental units you own, so of course you are charging an arm and a leg above the costs of self ownership, but that's probably in line with most rentals available in the local market.
🌻🌻 [google.com]
(Score: 2) by PiMuNu on Tuesday September 27 2022, @04:20PM (2 children)
One workaround is to agree with tenants that they can do minor maintenance, a bit of interior decoration, etc. It requires landlord and tenant are not aholes, which is hard to achieve.
> charging enough to pay others to do basically all the maintenance and also charge enough to expand the number of rental units you own
For many "buy-to-letters" the rental price follows the mortgage, and loan repayment is the main expense. At the very least, mortgage repayments drive the cost of ownership and hence strongly influence the "demand" part of the rental market pricing.
(Score: 2) by JoeMerchant on Tuesday September 27 2022, @04:44PM
Even if you buy your homes to let with all cash, that cash could be invested other places earning interest - so the cost of a mortgage is a pretty reasonable guide as to how much your invested capital should be returning. Not to mention, you're a rare bird and the rest of the market will be charging like that, so why not get what you can?
🌻🌻 [google.com]
(Score: 2) by Reziac on Wednesday September 28 2022, @04:05AM
We have learned not to let tenants do any maintenance more exciting than changing a light bulb, and sometimes not even that. (Idiots putting a too-hot bulb in a wattage-restricted fixture, etc.) The last one thought he was an electrician, and it cost us about $700 to fix what he fucked up.
And there is no Alkibiades to come back and save us from ourselves.
(Score: 4, Insightful) by Kell on Tuesday September 27 2022, @10:01AM
I, for one, am fuck'n thankful I bought a house when I could. Prices are skyrocketing around here. There is no way in hell I'd be happier paying off some rich cunt's third yacht. Fuck that shit.
Scientists ask questions. Engineers solve problems.
(Score: 4, Insightful) by Rosco P. Coltrane on Tuesday September 27 2022, @10:37AM (5 children)
I'll tell you what home ownership is: headaches. Yeah you save on rent, but all the trouble with the building are for you.
I put my two houses up for rent (because they're in foreign countries and I moved abroad) and I'll tell you what that is: more headaches with the fucking tenants.
I mitigate the problem by knowing the tenant personally in one of them, and by contracting an agency to put the squeeze on the one I don't know in the other. But the law is heavily in favor of the tenants, so when a tenant wants to make your life utter hell and make you lose money on your investment hand over fist, it takes them next no effort to do it and there isn't a damn thing you can do about it.
With the two rental incomes, I rent a house in the country I now live in. I'm not buying here because 1/ the prices have gone completely stupid since the pandemic and 2/ I've learned my lesson: when something bad happens with the house I rent, the landlord deals with it. Not me. Nosiree.
The way I see renting vs owning is this: if you're poor, you don't have the option: you have to rent. If you're wealthy enough, renting is a service you can pay to offset problems onto someone else and have the right to change house quickly without fuss. Me, after decades of owning properties, I'd rather rent.
What I'm very tempted to do is sell my houses (and it's definitely a seller's market right now) and buy garages or storage units: in the right area, they're in high demand, there's none of the pro-tenant legal bullshit attached to them (if a tenant doesn't pay, you open the unit, chuck the guy's crap or car out and change the lock, and good luck suing me over it), they're essentially zero maintenance and they're much cheaper than a house - meaning they're super-easy to resell quickly.
(Score: 2) by JoeMerchant on Tuesday September 27 2022, @10:49AM (4 children)
In the US it's a little different, the laws are very heavily in favor of the landlords in most respects.
Still have issues with bad tenants, but the smarter landlords own a number of rentals and spread the risk (and expense) of bad tenants across all the renters.
🌻🌻 [google.com]
(Score: 2) by Reziac on Wednesday September 28 2022, @04:13AM (3 children)
It's not an "in the U.S." thing, because landlord-tenant laws vary by state, and sometimes by city.
My experience has been that they're mostly tilted toward whoever is the biggest asshole, but that a non-paying tenant can get away with a lot more bullshit than can a neglectful landlord. Landlord neglects to fix shit, tenant can stop paying, and may not have to pay again for a Long Time. Tenant stops paying, and it takes 6-8 months to lawfully evict them, and if they leave shit behind, you're dinged for storing it too.
I knew a guy who lived like that for many years. He'd pay the first month on an apartment, and that was the last he'd pay. After several months they'd finally manage to evict him, and he'd find another landlord who believed his "lack of references".
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by JoeMerchant on Wednesday September 28 2022, @01:29PM (2 children)
>tenant can stop paying, and may not have to pay again for a Long Time
If you mean forever, then, yeah, that's the case just about all over the U.S. Landlord may try to take tenant to court, landlord may sue for damages and win a judgement, but there's a whole population of people in the U.S. (O.J. Simpson included) who owe people all kinds of money in court judgements that they never ever pay, even when they are more than capable to do so - you're not likely to win wage garnishment when you're a fat-cat landlord, too rich for sympathy, too poor to have real legal firepower.
The landlord's basic recourse is eviction ASAP, which as you point out can be 6-8 months in most places.
One might say: landlords who accept people with no references, no background checks, get what they deserve... These days you can run a credit/background check for very little money or effort.
🌻🌻 [google.com]
(Score: 2) by Reziac on Wednesday September 28 2022, @03:02PM (1 child)
Oh, we got screwed by a tenant with a clean background and a good job... when we finally got him out he owed most of a year in back rent and 3x that in penalties per the contract. Wasn't worth chasing him around in court, as you say that usually goes poorly, so it was good riddance and our single paltry rental now sits vacant, as cheaper than the alternative, until we find someone ironclad or with whom we have prior experience. (I've had good tenants...)
Here's something we learned from that one: no unmarried couples. If they're not committed to each other, they won't be any more committed to paying what they owe. Another thing is that next time we're renting the house as an apartment, to prevent fucking with the basement infrastructure (and moving in relatives that aren't on the lease) and so there's no argument about exterior maintenance -- I have access any damn time I need to, not when the tenant allows it (which was never), and things don't fall apart in the meantime. And the grass gets mowed before it reaches "jungle".
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by JoeMerchant on Wednesday September 28 2022, @03:45PM
Most tenants are good, even unmarried couples. By most, I mean: at least 51%. In the populations I know, closer to 90%+, but... there is some self-selection in that the type of people who would be bad tenants are also usually renters, not owners...
The only time we ever rented a house, we tied into the landlord from hell: never had tenants stay more than a year, kept her own niece's deposit, nicest rental house in the area BECAUSE: at the end of every tenancy she would: 1) put it back on the market immediately at 1.5x market rate asking for the duration of the current tenant's lease (so, the house would go unoccupied all that time, collecting rent from the tenant who moved out early), then 2) after dropping rent to market rate she'd get occupancy almost immediately, having used previous tenants as a sort of source of free advertising, and 3) when the new tenants would move in, they would get wind (after signing the lease and their deposit check being cashed) that they had indeed tied into the landlord from hell, so: they would note current condition of every little thing that the landlord from hell could possibly bill them for and... landlord from hell would send in contractors, for MONTHS, "fixing" absolutely every little thing on the list - of course the fixes were eyewash with no durability so the contractors would get called back a year later to do the same again, the whole process being extremely invasive for the new renters who had assumed that the home having stood vacant for months before they moved in was "ready to go" when they signed.... but of course the bill for all these little things? Extracted from the previous renters' deposit, and/or if they sued the landlord then they were up for stuff over and above their deposit as well as treble damages in court - as happened to the renters before us, and these are the type of people who _do_ pay judgements against themselves... We moved out early, ended up paying her the full amount of the lease ahead rather than having the house sit there collecting "damages" we would pay for later - she released our deposit, but wouldn't let us out of the lease until I forked over an additional $400 to cover the cost of utilities for the duration of our lease.
🌻🌻 [google.com]
(Score: 2) by VLM on Tuesday September 27 2022, @05:12PM (1 child)
What about "house" hobbies and lifestyles? I really can't do fine woodworking or ham radio "stuff" or larger scale gardening (raised beds, espalier trees, that kind of thing) to a serious degree without an acre of land.
(Score: 1, Insightful) by Anonymous Coward on Tuesday September 27 2022, @07:11PM
https://twitter.com/wef/status/808328302213689344 [twitter.com]
https://archive.ph/Zk5au [archive.ph]
https://knowyourmeme.com/memes/youll-own-nothing-and-be-happy [knowyourmeme.com]
(Score: 2, Interesting) by darkfeline on Wednesday September 28 2022, @12:56AM
Does anyone buy a house for happiness? Buying a house is almost entirely a financial decision. You're making that decision against renting. If you put aside the financial implications, there is no difference between owning a house and renting.
Why are we trying to optimize for happiness anyway? What is happiness? Can you truly be happy if you aren't hopped up on Class 1 substances?
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