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Exactly. You are either renting the money or the house. You might as well put your equity into a diversified mutual fund. However, there are massive nonfinan
by vasilipupkin 10y ago
Exactly. You are either renting the money or the house. You might as well put your equity into a diversified mutual fund. However, there are massive nonfinancial benefits of owning a home, don't forget
- taneq 10y agoI can drill holes in the walls wherever I want! Seriously though, renting sucks compared with owning, for all those nonfinancial reasons you mention.
- bane 10y agoAssuming you can rent or buy an equivalent property, in most markets, the monthly outlay is approximately the same. There's very few circumstances where a renter has such an excess of money that they could make any meaningful gains off of alternative investments. Over time this changes, assuming the renter and the owner have incomes that increase, rent also increases on the same property over time (usually on about par with inflation, but sometimes faster), while the owner's mortgage stays fixed. As a percentage of income, it's the owner who's more likely to have excess income they can be investing elsewhere. After 30 years (or repayment of their mortgage if sooner), the owner's property is as close to free as you can get and they can invest all of the money the renter is now spending.
- vasilipupkin 10y agoYou are forgetting that your down payment ( and equity )is tied up in the house, when it could be invested elsewhere.
- bane 10y agoIf you run the numbers and assume a market rate of return on most investments, it's very hard to turn the relatively small amount of money a down payment is into a net gain after 30 years.
- vasilipupkin 10y agothat statement is simply false
- bane 10y agofeel free to run the numbers and present here