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The idea that home ownership guarantees growth is a fallacy. In most cities prices only keep up with inflation. Ergo you are financially better off renting, an
by corv 8y ago
The idea that home ownership guarantees growth is a fallacy. In most cities prices only keep up with inflation.
Ergo you are financially better off renting, and investing the money you would have spent on a house.
- adrianN 8y agoOnly if the returns of your investments minus the rent still beat inflation.
- corv 8y agoUnless you've timed your real estate purchase and sale very well and happen to live in an exceptional city the average return of the public markets is most likely to exceed.
- scarface74 8y agoA house is an inflation hedge. I live in a metro area. Rent went up from $1200 a month in 2012 to $1700 a month in 2016. Now it is $2100 a month. This was for a 3 bedroom 1600 square foot apartment. We moved into a 2900 square foot house, a new build, where the mortgage is about the same. A fixed rate mortgage will only change slightly with property taxes and insurance. Even if the value of the house only goes up with inflation, you still get larger returns because you can take advantage of leveraging other people’s money. Also, a paid off house means that’s one expense you don’t have to worry about after you retire.