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Not really. I know the US has exceptionally low interest rates, but in every other country I've ever lived interest rates are almost always higher than rental y
by glenngillen 16y ago
Not really. I know the US has exceptionally low interest rates, but in every other country I've ever lived interest rates are almost always higher than rental yields. Properties that are yielding higher than the current interest rate are the exception rather than the rule. On that basis, you're paying a premium to "own" your home.
The only benefit of owning in such a market is that purchasing means you draw a line in the sand, "A" is now more in control if their monthly rent. But they're not in complete control, interest rates rise, the building needs to get repaired, there's those not insignificant legal and other costs associated with purchasing in the first place. That adds up to quite an expense. Meanwhile "B" doesn't have those concerns, and a great deal of flexibility and liquidity.
I'll personally stay "B", and my investment properties will be limited to those rare gems that are cash-flow positive within a year or two.