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The cost of renting a home is about the same as the interest on a mortgage _when you purchase_. If you purchased around my house two years ago, your mortgage w
by cosmie 10y ago
The cost of renting a home is about the same as the interest on a mortgage _when you purchase_.
If you purchased around my house two years ago, your mortgage would be less than $800. But current rates have it at about $1,300. As a rental, you can start renting that at $1,300/month even though you bought in when market rate was $800.
Plus, there's a huge number of tax benefits to investment property ownership, far more than for owner-occupied [1]. If you're going to remove the tax advantages of owner-occupied, you should also reduce the benefits of investment properties. But then you'll likely see rent rates hike as a result and the bar will tip in favor of ownership again.
[1] http://www.nolo.com/legal-encyclopedia/top-ten-tax-deductions-landlords-29497.html http://www.nolo.com/legal-encyclopedia/top-ten-tax-deduction...
- refurb 10y agoThe cost of renting a home is about the same as the interest on a mortgage _when you purchase_. It depends on the market. Price to rent ratios can vary a ton.[1] The link is from 2016, but the extremes are: San Francisco 48x (housing price is 48x monthly rent) Detroit 6.5x The neutral rent to price ratio is ~15. If it's higher than that, it's better to rent. If it's lower, it's better to buy. [1]https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities https://smartasset.com/mortgage/price-to-rent-ratio-in-us-ci...
- ouid 10y agoYes, I would also remove investment property tax benefits, were I emperor, but it would not cause rental rates to rise. That's not how the rental rate is decided. The rental rate is based on vacancy and income, ie supply and demand. If rental is harder to make money on, the only effect will be to drive down the cost of the property as the actual number of houses is fixed.