Add a few retirees for whom this is the only retirement option other than cramped government-funded apartment in the ghetto, van camping out in nature surely beats that.
Financial Crash (2022-25)
- Thread starter Cynllo
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Add a few retirees for whom this is the only retirement option other than cramped government-funded apartment in the ghetto, van camping out in nature surely beats that.
Keep in mind that there is similar math for Canada, except we have a far different starting point.
This chart only goes to the point just before they started raising rates, and we've gone up by a similar amount as the US. We never had a 2008. People saw the US, then experienced Canada, so unless you were a home owner in 1991, people idea of a "crash" is 4 slow months where prices pull back 7%, then by the end of the year they're back in the black again. Every single metric says Canada is so overpriced, that prices could plummet by 2/3rds and that would only take us back to "normal".
In the US and Canada, cost to own/rent ratio technically isn't that high yet. In many countries in Europe and Latin America, land, homes had been very expensive compared to both rents and median income and this had been going on for decades sometimes (big own/rent ratio), most people had been renters, as a result. So this stuff can keep going. If they mean it about "you will own nothing" it's meant to keep going. US and Canada are simply becoming more like much of the world.
Right now, it takes about 14 years of average house rent to pay off a typical home in the US. But 20+ years are a norm elsewhere. Some of these links express the ratio in months, not years, need to divide by 12
Own to rent in Europe
Own to rent in Latin America
Right now, it takes about 14 years of average house rent to pay off a typical home in the US. But 20+ years are a norm elsewhere. Some of these links express the ratio in months, not years, need to divide by 12
Own to rent in Europe
Own to rent in Latin America
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Caduceus
Heritage
Europe having a high price-to-rent doesn't surprise me, especially the really nice/rich places like Switzerland and Luxembourg. But Latin America having a high ratio sure does surprise me. Any idea why theirs is commonly higher than the US?
There's a YouTuber called Homeless Firefighter who saved 225k living in the back of his Toyota Tundra mostly parked at his fire station. He kept it going for 2.5 years whilst occasionally travelling the world and fighting fires during the summer season.
He hasn't posted in a while but if you like dry humour he's pretty hilarious despite the low subs. Naturally funny dude. Highly recommended. Respect for going his own way with the difficulty of house prices in Northern California. I wish I did something like this sooner.
Yeah I've met people exactly like this. A guy rented his home to take travel gigs and live out of a van. Tenants' rent pretty much pays the mortgage, he keeps the living stipend tax-free and uses it to turbo-charge paying off his mortgage so he can retire.
Not 100% sure. I think it's because "You will own nothing" started there earlier.
Latin America has plenty of land and lots of trees to build homes from, but they got oligarchic systems earlier than the US, higher inequality and wealth concentration being the norm.
Getting a mortgage is a lot harder in Latin America, that's the official reason for more renters, lack of creditworthy people. Overall it might be cultural too. In the US, homes are financialized assets heavily bought by investors who think in terms of monthly returns though rent and compare them to other assets on this metric. In Latin America, local owners might be accepting lower rent returns because of habitual high inflation and homes being a hedge more than anything else - just guessing here. Sort of like gold holders not expecting gold to pay interest, all focus is on value.
Also, in the US there might be higher maintenace, insurance, mortgage insurance and tax costs, requiring higher rents to get returns on the same value
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A built out professionally converted new van with all RV features now easily costs 150-250k, like a cheaper house.
Even just a plain cargo van with good gas mileage and big enough to live in will cost at least 40k-50k if new. And doing even basic conversion will cost, and a lot if not DIY. The ones with crappiest DIY builds and few miles on them also cost at least 40k to buy.
New trucks cost 40k+, and 4x4 with good clearance a lot more. Truck camper will cost tenths of thousands if it has RV features. Buying used, non-Toyota especially, often means buying someone's problems and repairs cost insanely high now, you have to be able to do own repairs.
I doubt someone could save 225k in 2.5 years by living in a van, this would mean nearly 100k/year rental expense saved, just not real.. Living in a van for a long tine, especially without full RV build, can be pretty miserable and stressful and will get old. Most vanlife vids hide the truth and many are paid by van conversion industry(I travel full time and fulltimed using all modes, you name it, van, truck, boat, rv, airbnb)
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Did you watch his videos? He simply has a mattress in the back of his Toyota and a cooker and during the busy summer fire season he only has to sleep in there 3-4 nights a week.
He's not saving 100k a year, nor is that much coming from saving on rental ( Your own math doesn't add up btw )
His other video explains he only saved 15 k by not renting / utilities etc, in his first year. As a Firefighter he had access to overtime and trading shifts. Basically, he had little to no expenses and long hours. There's also the knock on effect once you begin that life your finances will begin to snowball once you see results. Not out of the question. He's also making money from his YouTube videos with his old videos generating a decent amount of views for a low subscriber.
Of course this is not the norm for most people, but he seems pretty frugal and made the most of the opportunity.
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He makes 225k in 2/year and lives on a van to save 15k? Why?
The problem with the idea that property prices can spiral out of control isn't based in reality, because who is going to own those homes? When Prices to rents are 20, and then you take off all those extra little fees that landlords are responsible for like taxes, maintenance, insurance, vacancy, management, you might be left with earnings that are 2%. If you have to borrow any money at all, then you're hemorrhaging it. If you pay cash, then you have a very volatile investment (in can take a year+ to get rid of a non-paying tenant in parts of Canada or Europe), where, if everything works out perfectly as it should, you have 1/3rd the returns that you could get with a bank GIC, 1/5th what you'd bank in bank dividends, and you're subject to double the tax that you would compared to buying bank stock. You'd literally be lucky to make 1% free and clear. Secondly, appreciation is great when it happens, but there have been 2 decade stretches where after inflation RE has just kept up. RE as it stands today is a garbage investment based on the likelihood of appreciation, and the returns it garners. I'm not sure why any corporation, big or small would want to enter the game. Look at REITs, they've gotten slaughtered. Costs to buy are way up, rents are up, but no where near to the same degree. It's mostly just retard mom and pop investors who've drunk the koolaid the RE is a no lose investment that never goes down.
The reason why P/R could be high in Latin America is because on average, people don't make any money. Rents are a function of the markets they service. When I lived in Indo, You could rent a room for $30 a month. We rented a furnished 1000 sq ft, 2 br house in a touristy area for $325 a month - but then wages were literally 10% of the west. Ultimately all these things move lock and step. If a labourer makes $10 a day, then the laborer needs somewhere to live and raise a family for less then that. Meanwhile, the home he builds, will be subsequently cheaper, because the labour costs from everything to hewing lumber, to burning limestone for concrete, to putting it all together, will all subsequently be 1/20th the cost of what it would be in the west. Ultimately all costs are labour. The idea that a home should be about 3-4 years your salary, stems from the idea that it takes 3-4 man-years of labour to make a house. Whether you call the salary 100k and home 400k, or 10k and 40k, again all lock in step. At least in a sensible balanced economy. We're anything but in the west.
Ultimately though things can't get too far from the norm though, or else things don't work. Average people buying average homes *ARE* the market, and if that can't happen, then the whole market freezes up (Toronto sales rates are at 20+ year lows).
In another post, someone referenced the rising costs of owning, and i mentioned that it was worse here due to the differing start points of Canada vs the US since out "GFC" was 4 months with no foreclosures. I found another one that shows the total debt service of the two countries. A noticeable tick in the last couple years like the other one showed, but also the differing of the two start points for that uptick in both countries.
The reason why P/R could be high in Latin America is because on average, people don't make any money. Rents are a function of the markets they service. When I lived in Indo, You could rent a room for $30 a month. We rented a furnished 1000 sq ft, 2 br house in a touristy area for $325 a month - but then wages were literally 10% of the west. Ultimately all these things move lock and step. If a labourer makes $10 a day, then the laborer needs somewhere to live and raise a family for less then that. Meanwhile, the home he builds, will be subsequently cheaper, because the labour costs from everything to hewing lumber, to burning limestone for concrete, to putting it all together, will all subsequently be 1/20th the cost of what it would be in the west. Ultimately all costs are labour. The idea that a home should be about 3-4 years your salary, stems from the idea that it takes 3-4 man-years of labour to make a house. Whether you call the salary 100k and home 400k, or 10k and 40k, again all lock in step. At least in a sensible balanced economy. We're anything but in the west.
Ultimately though things can't get too far from the norm though, or else things don't work. Average people buying average homes *ARE* the market, and if that can't happen, then the whole market freezes up (Toronto sales rates are at 20+ year lows).
In another post, someone referenced the rising costs of owning, and i mentioned that it was worse here due to the differing start points of Canada vs the US since out "GFC" was 4 months with no foreclosures. I found another one that shows the total debt service of the two countries. A noticeable tick in the last couple years like the other one showed, but also the differing of the two start points for that uptick in both countries.
The average people buying average homes might not be the future market.
Again, "you will on nothing" was not said for nothing.
The rich can own everything.
They do not always need high returns, they are already rich.
Human beings used to be owned outright.
Egyptian pyramids were built by slaves, were owned by the Pharaoh and paid no returns, as an example.
Market in its current shape will only lead to concentration of assets in the hands of the few, because they got a lot more money available, simply and they can always collect rent on assets. Rents can be raised later.
Discussion of rent versus ownership cost assumes d type evonomy and market, but entire paradigm can shift.
Again, "you will on nothing" was not said for nothing.
The rich can own everything.
They do not always need high returns, they are already rich.
Human beings used to be owned outright.
Egyptian pyramids were built by slaves, were owned by the Pharaoh and paid no returns, as an example.
Market in its current shape will only lead to concentration of assets in the hands of the few, because they got a lot more money available, simply and they can always collect rent on assets. Rents can be raised later.
Discussion of rent versus ownership cost assumes d type evonomy and market, but entire paradigm can shift.
Regarding vans, life in a van is only possible in a very warm climate that isn't too hot in summer either like in coastal CA, in differerent climate seasonal migration is required or it will be very, very miserable existence. Not realistic for holding a job. Most public lands tightened camping limits, one will have to be in constant violation if wants to stay near a job or deal with knocks in the door at 2am. Or sit in cheap monthly RV park 10 feet from some junkies' RV.
Most online vanlifers who glamorize that stuff got rich parents with property or burn though lots of cash. Nomadland movie is kind of accurate.
Bob Wells featured in Nomadland who runs Cheap RV Living channel explains in detail how to live out there with a cot and crap bucket kind of thing, but for retirees its always a forced choice situation. I mean many live out of sedan cars. Not owning real estate is a big mistake in this country, it will only get worse
Most online vanlifers who glamorize that stuff got rich parents with property or burn though lots of cash. Nomadland movie is kind of accurate.
Bob Wells featured in Nomadland who runs Cheap RV Living channel explains in detail how to live out there with a cot and crap bucket kind of thing, but for retirees its always a forced choice situation. I mean many live out of sedan cars. Not owning real estate is a big mistake in this country, it will only get worse
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That's a fantastic point. Concrete construction in Mexico lasts for a while, and even in a dilapidated state, no one complains -- they just keep it going with frugal means, out of necessity. Americans expect everything to work perfectly.
Yeah, the guy I know paid $105k for a nice, but used van build. So he gets to live in a nice van instead of a truck bed, and a good portion of his "savings" go into paying off the van, which of course depreciates. He's also spent time, energy, and money maintaining it, and it's a Sprinter not a Toyota -- of course it's more expensive to maintain. So not as frugal as the Truck Firefighter, but he also can walk around and has a heater and a sink.
If he keeps the van working well and vans stay expensive, he'll still be able to sell it down the road(pun intended) for quite a bit as vehicles seem to be holding value better/inflating.
I agree, extended vanlife sounds miserable, and is why I've never done it. Wouldn't extended trucklife just be even worse?
I was fortunate enough to buy a house and have gone the "house hacking" method by renting out other rooms. Couldn't be happier with it, and it also helps create some actually affordable housing for my high-cost area. This helped me purchase my second, smaller place, and set me well on my way to financial independence.
I had watched a part of the vid you posted.
There are numerous channels and vids by nomads, one would need multiple lifetimes to watch all of them. I had lived nomadic life for a very long time and know pretty much everything nomads can post.
Some of them try to make money on youtube while claiming to be well to do, but it's not true and they are desperate. It's hard to make real money off travel channel, especially if one is not a hot young chick.
This guy appears to be genuine and not glamorizing vanlife, some vanlife youtubers are fake and don't even live in their vans/trucks/RVs.
What he described was very stressful urban camping life simply not worth it. I only did it for nature travel staying in remote locations miles from anyone else, because of my very unique life circumstances most people do not have. He says he saved a bunch of money but these money would get eaten by inflation by now, cut in half, and should have been put into home equity instead.