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The man's got a point. And I say that as a homeowner of nine years. The first point I would make is that unless you're independently wealthy, you're either goi
by frankus 16y ago
The man's got a point. And I say that as a homeowner of nine years.
The first point I would make is that unless you're independently wealthy, you're either going to be renting housing or renting money. All else equal, thirty years later you'll own some money or you'll own some property, respectively. The trick is in the "all else equal" part, because given rent versus price ratios, interest rates, and inflation expectations one or the other may be a far better deal.
Secondly, in a lot of desirable areas renting an equivalent property is far cheaper than buying. A lot of that has to do with the fact that rentals aren't usually quite as nice in terms of location, condition, and accoutrements as owner occupied places, but the effect often remains after correcting for this.
Good reasons to own your house? If you have pets, finding a rental can be really hard. If you enjoy renovating and general handypersonship maintenance might be a feature as well as a bug. Finally, if market conditions make it a no-brainer.
Tl;dr don't pay more in mortgage than you'd be comfortable paying in rent, and don't feel like you need to own a place to be a grownup.
- ericb 16y agoAnother good reasons to own is that when you own a home, no one can kick you out. When you rent, whether you live there next year is at the landlords discretion. A landlord may decide to sell next year, to renovate, to find tenants who never complain, to let their children live there, etc. Also, fixed mortgages stay the same price, but rents rise.
- TamDenholm 16y agoI understand that your point probably is "as long as you pay your mortgage and taxes, no one can kick you out". I think the likelyhood of being kicked out in both instances is extremely low if you continue to pay your rent/mortgage.
- ericb 16y agoIn the 13 years that I rented, I was forced to move once because the landlord's kids were moving in, once because we had a baby and the apartment had lead paint, and once because the building was being renovated. My point wasn't merely theoretical.
- rahoulb 16y agolast year there were a number of stories in the UK press (not that that is necessarily an indicator of accuracy) about renters having a month's notice to move out as the landlord had defaulted on the mortgage (and not informed the tenants).
- gamble 16y agoThey were lucky not to live in the US! Since the foreclosure crisis began, a lot of people have found out their rental home was foreclosed when the sheriff showed up on their door to evict them.
- sixtofour 16y agoLeases expire, and owners' circumstances change.
- teyc 16y agoThere is not one right rule to follow. It all depends on investment trends, the cost of maintenance, the competition for tenants. In Australia, where 98% of people live on 2% of its land, buying can make sense because it is a hedge against travelling time. As population grows, competition becomes more intense for suburbs that are closer to the city, buying a plot means that you have got a shorter commute than future residents. Ownership is also a hedge against rent rises. A retiree who is risk averse may find it better to own the property they live in rather than try to pay rent on a fixed pension.