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You've completely ignored risk. Any financial action (like taking out a $450k loan) comes with risks, otherwise everybody would always do it. In the past 30 yea
by soared 5y ago
You've completely ignored risk. Any financial action (like taking out a $450k loan) comes with risks, otherwise everybody would always do it. In the past 30 years we've had 3 major economic downfalls (.com, 08, Covid-19) - each of which could very easily cause someone to lose their job and subsequently their home/mortgage.
Your argument is how many people look at the stock market as well. It always goes up! - if you entered the stock market correctly, exited it correctly, invested correctly, had a long enough time horizon, and could stomach risk/declines.
Renting is not a long con and its absurd to claim that.
- Communitivity 5y agoYou are 100% right, I did not factor in risk. The SFR has a 100% guarantee of losing all the money they spend on rent. The national average for home appreciation over many years is 3.85%. There is a reason real estate is the investment of choice for many asset managers. Yes, if you sell the house during a downturn you could lose money. If you buy on the edge of a flood plain, or in a bad neighborhood, you could lose money. Individual stocks are high risk, but the DJIA has gone up consistently if you look at it across multiple years. Renting being a con might have been too strong - it might not be an intentional act to steal money. However, renting is almost never in your best interests, if you are not doing it for the flexibility (don't have enough money at the moment to buy a house, don't want to be tied down, etc.)