Facebook CEO rents :S & Warren Buffet's 32k home.

[Travis Munroe]

Just saw this on another board...

Zuckerberg, facebooks CEO who is worth billions rents a 1.5 million dollar home near the facebook headquarters.
I truly can't think of 1 reason why he would choose to do things this way unless he has plans to live elsehwere in the next year or so.
Also interesting that he drives a $13,000 vehicle. I understand being modest is a great trait to have but I would still consider this guy modest if he owned a 2 million dollar home and drove a 50k vehicle.

Also interesting to note is Warren Buffet has lived in the same home since buying new in 1957 for under $32,000.

http://www.thisismoney.co.uk/news/article.html?in_article_id=521321&in_page_id=2&position=moretopstories

[ynwa03]

What the hell is a Honda Acura?

[TSXCman]

What the hell is this thread's title?

[Phanuthier]

Just saw this on another board...

Zuckerberg, facebooks CEO who is worth billions rents a 1.5 million dollar home near the facebook headquarters.
I truly can't think of 1 reason why he would choose to do things this way unless he has plans to live elsehwere in the next year or so.
Also interesting that he drives a $13,000 vehicle. I understand being modest is a great trait to have but I would still consider this guy modest if he owned a 2 million dollar home and drove a 50k vehicle.

Also interesting to note is Warren Buffet has lived in the same home since buying new in 1957 for under $32,000.

http://www.thisismoney.co.uk/news/article.html?in_article_id=521321&in_page_id=2&position=moretopstories
I think the Buffet $32k home is pretty well known. Buffet is one admirable guy, doesn't let wealth get to his head and doesn't waste money on status crap like nice cars (other than his jet). Buffet and Gates focus on something much more important.

As for Zuck... its not like a house is going to be an investment for Zuckerburg, so why bother? Rent is easy, doesn't tie him down to anything, keeps his options open. He gets to stay in an area with tons of entrepreneurs and startups, as there are tons of startups in Palo Alto. I hear from my friends who work at Facebook or worked with him (i.e. one of the guys I know was one of Facebook's VP's) say he's just your typical nerd, but a really cool and easy going guy, and doesn't seem to be swayed by status crap like nice cars.

[carom]

What the hell is a Honda Acura?

Probably something they make in Omaha, Georgia

Warren Buffett still lives in the five-bedroom house in Omaha, Georgia

[billybob123]

But hey, the guy doesn't have to do any maintenance. Washing machine busted? Call the Landlord. Ooo, another lightbulb out. Time to call him again!

[Travis Munroe]

What the hell is a Honda Acura?

Im guessing it is a honda integra

[Flames0910]

Acura is Honda's luxury brand so it's not technically wrong.

[Hack&Lube]

He drives a TL or TSX IIRC.

[Travis Munroe]

He drives a TL or TSX IIRC.

I have been seeing this IIRC more and more and your post made me investigate lol.
There are several slang terms that came up but I am assuming it is
"If I Read Correctly" ???

Cheers

[KTrain]

The way the American housing crisis is shaping up, renting was probably a better investment than buying.

[Tinordi]

Why would Zuckerberg need to own a place? Pretty sure his other investments are doing well. In all honesty, it just demonstrates more savvy by Zuckerberg as he avoided one of the worst performing investments over the past 4 years in real estate.

If I was him I'd rent too. No need to hassle with maintenance, property tax, or actually selling the place when you want to move.

[getbak]

I have been seeing this IIRC more and more and your post made me investigate lol.
There are several slang terms that came up but I am assuming it is
"If I Read Correctly" ???

Cheers
If I Recall/Remember Correctly.

[Weiser Wonder]

Some people just don't like stuff. I like my food and drink expensive but I don't have a desire to own a home or a fancy car. So I'm with Zuckerberg. Although I'd probably buy a nicer car that drives really well.

[NuclearFart]

Sounds exactly like something Buffet would do......Maybe he idolizes Buffet and is merely following in his footsteps.

[Kybosh]

Warren Buffet knows that moving is a pain in the ass.

[macker]

The way the American housing crisis is shaping up, renting was probably a better investment than buying.




Yep!! Record 1 Million homes repossessed in 2010....The Case Shiller just came out and prices are down again for the 5th straight month. Basically US home prices are at the same level that they were in mid 2003.

Rent vs Buy in the US : this is an interesting take on it : http://money.cnn.com/galleries/2011/real_estate/1101/gallery.rent_or_buy/index.html

Sam Walton would approve of Zuckerbergs ride;)

[ynwa03]

Acura is Honda's luxury brand so it's not technically wrong.

Honda or Acura is not wrong but a Honda Acura is lol

[Flacker]

The Honda/Acura confusion comes from the fact that the article is British and there is no brand Acura in Britian it is all sold under the Honda badge.

[Parallex]

Why would Zuckerberg need to own a place? Pretty sure his other investments are doing well. In all honesty, it just demonstrates more savvy by Zuckerberg as he avoided one of the worst performing investments over the past 4 years in real estate.

Real Estate isn't inheriently a poor investment, it's just like anything else in that it has to be properly valued. The market failure of the US housing market during the past 4 years was more a market failure in non-fixed rate mortgages by banks/lenders then anything else. Well that and the western compulsion to attempt to live beyond our means. That being said it's entirely possible that Zuckerberg can't find a place to buy that is both valued properly and fits his needs.

I'd rather own then rent in general, renting is just assetless sunk money.

[bizaro86]

It's also possible that for someone like Zuckerberg it just doesn't matter. The guy is worth a billion plus, a few million on a house either way doesn't make any difference. If he's renting, it's easy to switch if he finds something different, or wants to move, or whatever. The extra time he'd spend looking for a house might not be worth the potential for gain on a house. Plus, if most of his money is tied up in Facebook stock, he might feel that its not worth selling that stock to buy real estate, because he'd have to pay tax on the gain plus the stock might be a better investment going forward.

Lots of potential reasons he doesn't buy other than real estate is a bad investment.

[Sliver]

It's also possible that for someone like Zuckerberg it just doesn't matter. The guy is worth a billion plus, a few million on a house either way doesn't make any difference. If he's renting, it's easy to switch if he finds something different, or wants to move, or whatever. The extra time he'd spend looking for a house might not be worth the potential for gain on a house. Plus, if most of his money is tied up in Facebook stock, he might feel that its not worth selling that stock to buy real estate, because he'd have to pay tax on the gain plus the stock might be a better investment going forward.

Lots of potential reasons he doesn't buy other than real estate is a bad investment.

If that's the case dude needs to diversify.

[macker]

http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/WhyRentToGetRicher.aspx?page=all

Interesting reasons why many rich people rent. I have heard many others warn in the past few years to sell all your unnecessary real estate as boomer spending has peaked out and the demographic trends favors further corrections for the next 5-10 years and possibly even longer.

But in reality I don't think Zuckerberg has given this much thought and saw a place he liked so he is renting it and if he sees a place he likes next week he will buy it. Maybe he wants to create the perception that many will buy into that he is savvy with his money and hasn't forgotten his humble roots:bag: etc. etc. who knows really....

Maybe he read some quotes from Warren Buffett.....
Warren Buffett : "Why should I invest in real estate when the stock market is so easy?"

[bizaro86]

If that's the case dude needs to diversify.

Probably. But I doubt one 5 MM$ house in California is going to make a difference either way.

[Cowboy89]

Real Estate isn't inheriently a poor investment, it's just like anything else in that it has to be properly valued. The market failure of the US housing market during the past 4 years was more a market failure in non-fixed rate mortgages by banks/lenders then anything else. Well that and the western compulsion to attempt to live beyond our means. That being said it's entirely possible that Zuckerberg can't find a place to buy that is both valued properly and fits his needs.

I'd rather own then rent in general, renting is just assetless sunk money.

Only in the case where renting vs. buying is exactly the same on a cash-flow basis. Often this is not the case and renting ends up being cheaper than even the interest proportion of a mortgage payment (In others words the difference between renting and buying is just who you pay interest to, the bank or a landlord). Another bonus of renting is that you don't have to pay for maintainence and repairs, many homeowners really underestimate this cost. Also factor in the fact that the principal portion you pay is dead money (home equity doesn't pay you interest or dividends unless you have tenants and that comes with its own perils) earning nothing in interest or dividends. This makes a compelling case to rent and invest the difference in a broad variety of investments that earn a return. That way you get diversification, liquidity, and flexibility. All things your house can't do for you as an asset.

[username]

Only in the case where renting vs. buying is exactly the same on a cash-flow basis. Often this is not the case and renting ends up being cheaper than even the interest proportion of a mortgage payment (In others words the difference between renting and buying is just who you pay interest to, the bank or a landlord). Another bonus of renting is that you don't have to pay for maintainence and repairs, many homeowners really underestimate this cost. Also factor in the fact that the principal portion you pay is dead money (home equity doesn't pay you interest or dividends unless you have tenants and that comes with its own perils) earning nothing in interest or dividends. This makes a compelling case to rent and invest the difference in a broad variety of investments that earn a return. That way you get diversification, liquidity, and flexibility. All things your house can't do for you as an asset.

There's been a lot of research done on this and generally renting is better long term if you invest the extra money left over from not buying a home. With that said, very few people have the discipline to take that extra money, invest it and leave it. Chances are it's going to be blown on things like a fancy new car or something.

The advantage of buying a home is that it forces people to save and then when they are ready to retire they can downsize and pull that money out of their home and use it for retirement.

[Slava]

There's been a lot of research done on this and generally renting is better long term if you invest the extra money left over from not buying a home. With that said, very few people have the discipline to take that extra money, invest it and leave it. Chances are it's going to be blown on things like a fancy new car or something.

The advantage of buying a home is that it forces people to save and then when they are ready to retire they can downsize and pull that money out of their home and use it for retirement.

I agree with you that the forced savings is important for almost everyone. The scary thing to me is how many times I hear the sentiment that people are planning on downsizing to retire, or that their retirement plan is their house.

[Tinordi]

I'd rather own then rent in general, renting is just assetless sunk money.

Not really, you're spending your money on a basic commodity, shelter. Just like you spend money on food and clothes, you don't get much back from those in terms of savings either but you need them.

I have no problem paying rent. In return I get a nice place, in an area I like to live in, with a bunch of other quality of life boosters that I value. I'm paying for that for my rent. I get value out of that, if I didn't get any value out of it I wouldn't pay it. So it's not like you're just throwing rent money down a hole. You're getting a hole lot back from it.

[Tinordi]

“Owning your own home is a forced savings plan.”
As you can see above, if home buying is like a savings plan, it’s probably the worst savings plan on Earth. Would you voluntarily sign up for a savings plan where well over half of the money you deposit in the first 20 years simply vanishes, and from which you can only withdraw money by relocating and paying a 6-9% fee (not on the amount you have “saved” mind you, but on the total sale price of the home)? Of course not. That doesn’t sound anything like a savings plan.

If our potential homebuyer has that $85,000 saved up for a down payment and deposits it along with just half of the monthly savings over buying ($578 per month) into an account at 8% interest, the balance will be nearly $300,000 in just 10 years. That’s a liquid investment, that can be used for whatever you want, no relocation required. Buying a home is not a savings plan. Actually saving money every month is a savings plan.

http://www.getrichslowly.org/blog/2007/07/16/renting-vs-buying-the-realities-of-home-buying/

[bizaro86]

into an account at 8% interest,

I'd like one of those please. When was the last time you saw "savings account" and "8% interest" in the same sentence/paragraph? Maybe with stocks or other non-guaranteed investments, but certainly not a bank account anywhere in Canada.

[Phanuthier]

I agree with you that the forced savings is important for almost everyone. The scary thing to me is how many times I hear the sentiment that people are planning on downsizing to retire, or that their retirement plan is their house.
Hey Slava, just wondering what your take is on owning a house vs mortgage?

[TheyCallMeBruce]

haha, if Zuckerberg was going to rent from me, I would decline. You have no leverage with a guy like him lol.

[Sliver]

You'd think he'd want his own place if for no other reason than to customize the crap out of it. Think of how cool you could make your place with an unlimited budget.

[Travis Munroe]

If you plan on renting your entire life then you will need to be good at saving money. Once you retire you will continue to have rent payments until you die. If you own there is a good chance you are mortgage free by the time you retire and will now avoid the monthly expense of rent.

[8sPOT]

My wife and I sold our first home for 203% of what we paid for it 2 years earlier. We put ZERO down at the time and if I could go back in time we would have bought two!

I believe in the long term buying is better than renting. As mentioned just above, when you retire your income will be reduced and do you still want to pay whatever the going rent rates are at that time?

The way I see it is, whether I keep our current home or not I will NEVER add to the amortization. When I retire at 55 my mortgage will have been paid off a year or two prior (maybe more if I make additional payments over the years).

If I didn't have a shelter payment I could flip burgers for a living and get by just fine.

[TorqueDog]

haha, if Zuckerberg was going to rent from me, I would decline. You have no leverage with a guy like him lol.You'd have no leverage at all. Here's what I predict being his landlord to be like:


- Mark Zuckerberg has installed the 'incredibly loud stereo system to annoy the neighbours' application.

- Mark Zuckerberg has invited you to the event 'Huge shaker at my place!'

You have poked Mark Zuckerberg.

- Mark Zuckerberg has installed the 'incredibly rowdy house party to annoy the neighbours' application.

- The Neighbours have joined the group 'Tell that kid to keep the noise down'.

- The Neighbours have invited you to join the group 'Tell that kid to keep the noise down'.

You have joined the group 'Tell that kid to keep the noise down'.

You have poked Mark Zuckerberg.

- Mark Zuckerberg has installed the 'Pay the rent' application and has sent you $15,000 in rent.

You have left the group 'Tell that kid to keep the noise down'.

You have blocked The Neighbours.