this post was submitted on 12 Feb 2024
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The boots theory is an economic theory that people in poverty have to buy cheap and subpar products that need to be replaced repeatedly, proving more expensive in the long run than more expensive items.

https://en.wikipedia.org/wiki/Boots_theory

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[–] lqdrchrd@lemmy.blahaj.zone 19 points 9 months ago (9 children)

Paying rent instead of a mortgage.

[–] Bravebellows@lemmy.world 8 points 9 months ago (8 children)

It depends on where you live. Take Florida for instance, with the insurance companies abandoning you or filing bankruptcy just before paying a claim. It gets more expensive and as you age, maintenance gets harder to do, much less replace big appliances without paying someone to do it.

If you're young and strong and not working in an industry that breaks you, a mortgage may be smarter (and cheaper) than renting.

Both has pros and cons; one strong con is that if you have a mortgage, you become geo-locked to your land and when you get a job offer that moves you outside of reasonable commute range, you have the extra headache of fixing the property up for sale and having the split attention of working at your new job and keeping in touch with the sales leads.

If you're older, renting may be better as if something breaks, the apartment manager takes care of it.

So there's a hidden cost to owning a home versus renting. You can almost count on renting being a fixed cost each month (rent + utilities + insurance) whereas a mortgage, you cannot.

[–] Nemo@midwest.social 13 points 9 months ago (7 children)

You can almost count on renting being a fixed cost each month (rent + utilities + insurance) whereas a mortgage, you cannot.

Big lol. My mortgage has been the same for five years; my rent went up every year, or worse just kicked us out, forcing us to pay moving expenses as well. Mortgage is much more stable than renting.

[–] stanka@lemmy.ml 2 points 9 months ago (1 children)

Adjustable rate mortgages change with interest rates. The 'real' value of a fixed mortgage changes with inflation.

Landlords are passing on costs in the same way that banks pass costs to them or mortgage holders.

[–] xkforce@lemmy.world 3 points 9 months ago

The kind of people that get ARMs are already in trouble.

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