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> 1. rent is less than a mortgage This is highly variable. From what I've heard this is usually the case in the USA, while in Europe renting is often much more

> 1. rent is less than a mortgage This is highly variable. From what I've heard this is usually the case in the USA, while in Europe renting is often much more expensive than a mortgage on a similar home.

vonmoltke 6y ago
> I've heard this is usually the case in the USA Where have you heard that it is usually the case in the US? I have put money into two different housing markets (Dallas-Ft. Worth and northern New Jersey) and it was not the case in either.
- persedes 6y ago
  same for the research triangle in NC. edit: just checked an area little further out, same still applies. ~2 years ago the only home we found that would've been that "cheap" reeked of mold. It does not surprise me for these densely populated areas, but I can imagine this might be the case in more rural areas.
  - theptip 6y ago
    I'm wondering if this is a "mortgage payment amount" vs. "total cost of ownership" difference? Not my area of expertise, but a quick search gives some conflicting and unspecific articles like: https://www.cnbc.com/2019/02/13/how-much-more-money-it-costs-to-own-a-home-than-rent-in-every-us-state.html https://www.cnbc.com/2019/02/13/how-much-more-money-it-costs... https://www.businessinsider.com/us-cities-where-its-cheaper-to-own-home-than-rent https://www.businessinsider.com/us-cities-where-its-cheaper-... Or in your experience in these markets are you seeing rent above the total monthly cost of ownership? When I'm saying "mortgage is more expensive" that's really a lazy shorthand for "total monthly cost of owning a house including HOA and maintenance", not sure if that was clear from the context.
    - persedes 6y ago
      From my small sample size I'm seeing around ~500$ / month (33%) more for renting vs what you'd pay on a 30 year mortgage. This difference might be covered by total costs of ownership, but according to the nyt rent vs buy calculator, you'll only be better off renting when looking at a time frame of less than ~5 years. Greensboro, NC is on that list (which would fall in the more remote category) and the same still seems to apply. Not sure if my numbers are right, but a 2,000 sqft house from the 60s is being offered to rent for 1,500$, which is kind of ridiculous imho. Property value should be around 200k, with a monthly mortgage <900$: https://www.zillow.com/homedetails/1603-Milan-Rd-Greensboro-NC-27410/5935444_zpid/ https://www.zillow.com/homedetails/1603-Milan-Rd-Greensboro-...
milkytron 6y ago
Agreed. Even in the USA, from what I've seen, if you put a 15-20% down payment towards a home in a strong rental market (or what used to be), the mortgage will be less. I moved into a residential development about two years ago, and people were buying houses and renting them out nearly immediately. Not sure what they pay on it, but for my scenario, renting the equivalent was about $200 more per month than getting a mortgage (taxes, maintenance and all). And the difference was increasing right up until the pandemic happened, not sure where it stands now. If you're willing to put a solid down payment into a home, you can pay less than rent would otherwise be, it's just a matter of how much.
sethammons 6y ago
agreed, variable. Lived most my life in Southern California. I've seen rent being both cheaper and more expensive than a mortgage. For a long while, the mortgage was a much better monthly payment; folks without a down payment were locked out of mortgages and stuck paying higher rents. Looking at my flyover state on craigslist + zillow, a random house I picked rents for $1.4k/mo and has an estimated mortgage of $1.5/mo. Your rent "savings" would be $100/mo and ignoring cost of maintenance if you mortgaged.

vonmoltke 6y ago

> I've heard this is usually the case in the USA Where have you heard that it is usually the case in the US? I have put money into two different housing markets (Dallas-Ft. Worth and northern New Jersey) and it was not the case in either.

persedes 6y ago
same for the research triangle in NC. edit: just checked an area little further out, same still applies. ~2 years ago the only home we found that would've been that "cheap" reeked of mold. It does not surprise me for these densely populated areas, but I can imagine this might be the case in more rural areas.
- theptip 6y ago
  I'm wondering if this is a "mortgage payment amount" vs. "total cost of ownership" difference? Not my area of expertise, but a quick search gives some conflicting and unspecific articles like: https://www.cnbc.com/2019/02/13/how-much-more-money-it-costs-to-own-a-home-than-rent-in-every-us-state.html https://www.cnbc.com/2019/02/13/how-much-more-money-it-costs... https://www.businessinsider.com/us-cities-where-its-cheaper-to-own-home-than-rent https://www.businessinsider.com/us-cities-where-its-cheaper-... Or in your experience in these markets are you seeing rent above the total monthly cost of ownership? When I'm saying "mortgage is more expensive" that's really a lazy shorthand for "total monthly cost of owning a house including HOA and maintenance", not sure if that was clear from the context.
  - persedes 6y ago
    From my small sample size I'm seeing around ~500$ / month (33%) more for renting vs what you'd pay on a 30 year mortgage. This difference might be covered by total costs of ownership, but according to the nyt rent vs buy calculator, you'll only be better off renting when looking at a time frame of less than ~5 years. Greensboro, NC is on that list (which would fall in the more remote category) and the same still seems to apply. Not sure if my numbers are right, but a 2,000 sqft house from the 60s is being offered to rent for 1,500$, which is kind of ridiculous imho. Property value should be around 200k, with a monthly mortgage <900$: https://www.zillow.com/homedetails/1603-Milan-Rd-Greensboro-NC-27410/5935444_zpid/ https://www.zillow.com/homedetails/1603-Milan-Rd-Greensboro-...

milkytron 6y ago

Agreed. Even in the USA, from what I've seen, if you put a 15-20% down payment towards a home in a strong rental market (or what used to be), the mortgage will be less. I moved into a residential development about two years ago, and people were buying houses and renting them out nearly immediately. Not sure what they pay on it, but for my scenario, renting the equivalent was about $200 more per month than getting a mortgage (taxes, maintenance and all). And the difference was increasing right up until the pandemic happened, not sure where it stands now. If you're willing to put a solid down payment into a home, you can pay less than rent would otherwise be, it's just a matter of how much.

sethammons 6y ago

agreed, variable. Lived most my life in Southern California. I've seen rent being both cheaper and more expensive than a mortgage. For a long while, the mortgage was a much better monthly payment; folks without a down payment were locked out of mortgages and stuck paying higher rents. Looking at my flyover state on craigslist + zillow, a random house I picked rents for $1.4k/mo and has an estimated mortgage of $1.5/mo. Your rent "savings" would be $100/mo and ignoring cost of maintenance if you mortgaged.