4 ms·
See my post above. Once you pay off the mortgage it is equivalent to paying yourself out a percentage of cash investment. In NYC that number is approximately 4.
by soyiuz 10y ago
See my post above. Once you pay off the mortgage it is equivalent to paying yourself out a percentage of cash investment. In NYC that number is approximately 4.5%. That is pretty good but not great considering the risks of ownership.
- bane 10y agoExcept I think you are assuming the renter is starting out with a large cash reserve they can invest and the owner doesn't have that at the start and must accrue that value over their mortgage period. To compare correctly you must assume both people are starting the same
- barrkel 10y agoHome ownership via a mortgage is a leveraged investment. If you're renting, you usually don't have access to leverage for an investment like that. Further, when you're renting, you don't normally have much of an impetus to save extra and accrue interest; whereas a mortgage acts as a forced saving scheme. You must save (build up equity) or else the bank will foreclose on your property!