4 ms·

Renting is cheaper than buying? That really doesn't make sense, and I don't think that's the case in most markets. In California, it might because of the funn

Renting is cheaper than buying? That really doesn't make sense, and I don't think that's the case in most markets. In California, it might because of the funny way they do property taxes there, where new buyers get stuck with huge property tax bills but long-time owners are grandfathered at far lower rates, so the landlords are likely people who've owned the house for ages. Other states just aren't like this.

heywiseguy 11y ago
Renting is vastly cheaper than buying in many of the most expensive markets in the USA, if your only assumptions are like "borrows 30 year fixed at good credit rating current rates at 80% of the value of the property". Vastly. Fancy parts of LA. SF. All of New York. Pretty much anywhere in the train-serviced urban/suburban Northeast. It might not "make sense" but it is true. I'm also sure it's not the case in most markets in the USA, but in the large metropolitan markets, it is true, and that's the point people are making when they say "you know, it might make more sense to invest your investment money in a different asset class and rent rather than pay the ownership premium here in Santa Monica/Pacific Heights/Williamsburg"
ArkyBeagle 11y ago
Renting can be cheaper or about the same as buying. And I mean a comparable property. You have to add it all up. My landlord has probably shelled out $10k in repairs ( the house is at that magic 20 year point where everything fails ) in five years. I've done the "buy cheap and spend the rest at Home Depot" thing. It's not bad, but it's not ideal. Unless I'm categorically certain of living in the house at least five years, I'll continue to rent. I've done the math - I'd have less equity in a house of the same value than I have in raw cash freed up just from renting. And that's really not counting fees and closing costs.

heywiseguy 11y ago

Renting is vastly cheaper than buying in many of the most expensive markets in the USA, if your only assumptions are like "borrows 30 year fixed at good credit rating current rates at 80% of the value of the property". Vastly. Fancy parts of LA. SF. All of New York. Pretty much anywhere in the train-serviced urban/suburban Northeast. It might not "make sense" but it is true. I'm also sure it's not the case in most markets in the USA, but in the large metropolitan markets, it is true, and that's the point people are making when they say "you know, it might make more sense to invest your investment money in a different asset class and rent rather than pay the ownership premium here in Santa Monica/Pacific Heights/Williamsburg"

ArkyBeagle 11y ago

Renting can be cheaper or about the same as buying. And I mean a comparable property. You have to add it all up. My landlord has probably shelled out $10k in repairs ( the house is at that magic 20 year point where everything fails ) in five years. I've done the "buy cheap and spend the rest at Home Depot" thing. It's not bad, but it's not ideal. Unless I'm categorically certain of living in the house at least five years, I'll continue to rent. I've done the math - I'd have less equity in a house of the same value than I have in raw cash freed up just from renting. And that's really not counting fees and closing costs.