Hear me out with this controversial theory.
- own rental property
- rent primary residence

I find that when I own a rental property, I make wise choices and invest using a payback/growth mindset. Predictable + cash flow

When I own a home, I buy lots of stupid sh*t probably because it is sentimental and a representation of "me" (yuck). Unpredictable -cash flow.

When I rent my residence, I take an investment mindset and just spend money on what I need to exist. Predictable cash flow out.

likeuplifting
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Fine if you don’t value the stability and security of owning your own home. Want to remodel the kitchen? Install a big raised-bed garden with fencing and infrastructure? New floors? Built-in shelves? Springing for the furniture and things you actually want and will keep for 20 years instead of skimping and sacrificing because you can’t guarantee they’ll work in the next place you rent?

I choose to own.

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Like I said, fine if you don’t value it.

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That's the most practical way to go! No kidding.

It's a thought that had been hashed out in the FIRE community (not here on FB) and isn't really controversial.

Besides the points you mentioned, it puts an end to the erroneous idea that a primary residence is an investment.

But the thing with housing is that a great majority buy for sentimental reasons which they mask as practical ones. Me included.

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This is called loan fraud.

smartfunny

It’s not de facto called loan fraud. But, if you say you’ll live in your primary residence and don’t, that’s occupancy fraud (a specific form of mortgage fraud). It’s also not about renting out at a lower rate, but about receiving lower payment terms than if they hadn’t misrepresented intent on the application.

I could see how that’d be confusing for a novice (which is why I googled it when loan fraud seemed obviously the wrong name for it).

You can also just not commit fraud by not lying about the intent.

Sorry for the weird attack dynamic, McKinsey’s reputation (pay aside) proceeds it lately in the news.

Yup, I have always done this. It’s housing arbitrage; buy where cost to own is lower than cost to rent. Rent where cost to rent is lower than cost to own.

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Appreciation in dollars or percent?

Better yet, forget owning rental property, rent your residence, and invest in stocks.

helpfulfunny

Nothing stopping you from putting leverage on stocks if you want to.

I do this also. Has been very beneficial for me so far and I rent for less than my investments rent out for.

Seems like you are just playing mental games with yourself.
Would be more intelligent to control yourself over “tricking” your mind into not buying material things or buying more house than you need.

I did this for many years after buying an apartment building, bud this year just bought my primary residence. Time will tell if it’s a limiting move or not with regard to financial independence. But a few things stood out to me as worth taking that risk:

1. Leveraged growth - I knows there is risk involved but my cash on cash return on real estate (when including appreciation) has been phenomenal. Owning a primary residence just puts another levered asset in the mix. Well I appreciate that it is not conventional in the fire community to include home equity in your net worth, it’s also true that many in the fire movement expect to change their lifestyle or location once they reach independence, meaning the sale of the residence is likely (i.e. that appreciated value will be realized).

2. Exit options - In my case, I can rent out my primary residence and get nominal cash flow from it, so it didn’t seem to be a situation that could lock me down in the sense of being “house poor”

3. Having a wife and kid - there is clearly intangible value to owning your own home. Well that value does not translate into some thing you can retire early with it is nonetheless value.

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