Jared A. Brock makes an interesting point about the new real estate normal:
For years, banks and ultra-elites (bankrolled by years of money-printing, corporate socialism, and bailouts) have been using their wealth to take control of the world and rent it back to us.
Apple did it with music.
Netflix did it with movies.
Nestle did it with water.
Uber did it with cars.
Airbnb hosts and landlords did it with houses.
The lecherous gig economy did it with employment.
Instead of buying and owning products, now we’re all just renting “services.”
After all, why should people like you and me build equity when a multinational corporation can build equity instead?
So long as your monthly housing-as-service payment remains relatively “affordable” (AKA half your income), the ownership class doesn’t care if it’s rent instead of a mortgage. Thus, house prices continue to rise against all reason as private equity and rent-seeking investors outbid families for control of shelter. Sure, there might be more real estate price crashes, but they’ll just be bigger versions of 2008 — buying opportunities for the hyper-elite. Your home is now a future hedge fund investment
So what can you do about it? It’s actually simple. Here are the three simple rules that have worked for me:
- Buy a home as soon as possible that is well below your means.
- Pay off the mortgage in less then 10 years. Do what ever it takes (within the law and ethical conduct) to do this.
- Never upgrade to a larger home unless you are paying for it in cash.