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How so? It costs thousands to buy a house It costs thousands to sell a house It costs thousands to maintain a house (I once spent, over $10,000 in one month
by astura 8y ago
How so?
It costs thousands to buy a house
It costs thousands to sell a house
It costs thousands to maintain a house (I once spent, over $10,000 in one month on repairs)
It costs thousands in property tax and insurance
You pay thousands in interest and maybe PMI.
If the asset doesn't appreciate faster than inflation, where's the wealth building coming from? Sure, I'm not paying rent, but, honestly, it ends up being mostly a wash once you factor in all the expenses I am paying.
I bought a house because I wanted to own a house, not because i thought it would build wealth.
- azeotropic 8y agoYou're paying all the transaction costs and maintainance costs and tax and insurance costs when you rent too. The landlord passes them on to you in your rent. One thing that can make it better to own (in the US) is that mortgage interest is tax deductible (at the federal level). Rent typically is not (although some states make rent tax deductible because voters naively believe this is a subsidy to renters and not to landlords).
- ap3 8y agoNot always the case because the market sets the rent - not the owners expenses In CA I might be paying double the tax than my neighbors but I can’t charge more rent than them
- azeotropic 8y agoYes, but perennially unprofitable units are going to leave the rental market. So it's not like owners' expenses are not an input into the market price.