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If your mortgage is lower than the rent that means your location appreciated very significantly. Given stagnant prices mortgage being lower than rent doesn’t ma

If your mortgage is lower than the rent that means your location appreciated very significantly. Given stagnant prices mortgage being lower than rent doesn’t make sense. Now the question for someone buying today is if they expect that to happen in the future. For me the answer is not positive enough to gamble buying a place.

dragontamer 5y ago
It's a townhome, so the appreciation I got is far less than the larger single family homes in my area. Furthermore, I've ignored appreciation from my calculations above (since my property has appreciated considerably, its as if I've gained $60,000 in equity). Frankly, appreciation of assets is one of the biggest reasons to own rather than rent. Townhomes are like apartments but no worries about bothering people below your floors (or people above you annoying you when they move chairs). They also build equity at higher rates than renting. Bonus points: I have a dedicated driveway + garage while my neighbors are sharing their parking space with each other (and often run out). Also like, +1000 sq. feet. 3 stories of space helps a lot compared to the apartment sizes. ----------- Look, not everywhere is the crappy San Francisco housing market. There are plenty of locations in the USA where rent prices are terrible and ownership is much better financially. Any location that's constantly building new homes (pushing home ownership prices down, and therefore rent prices down) will probably have a market like mine where ownership is in fact the better financial decision.
FireBeyond 5y ago
My mortgage is $3,000/month. My rent at the place I moved out of would have been $2,500/month. That's very little difference, ultimately, when it comes to the equity part of the equation. I've had some upfront costs in the first three months, but none were surprises (appliances, knew that the AC was past its usable life.

dragontamer 5y ago

It's a townhome, so the appreciation I got is far less than the larger single family homes in my area. Furthermore, I've ignored appreciation from my calculations above (since my property has appreciated considerably, its as if I've gained $60,000 in equity). Frankly, appreciation of assets is one of the biggest reasons to own rather than rent. Townhomes are like apartments but no worries about bothering people below your floors (or people above you annoying you when they move chairs). They also build equity at higher rates than renting. Bonus points: I have a dedicated driveway + garage while my neighbors are sharing their parking space with each other (and often run out). Also like, +1000 sq. feet. 3 stories of space helps a lot compared to the apartment sizes. ----------- Look, not everywhere is the crappy San Francisco housing market. There are plenty of locations in the USA where rent prices are terrible and ownership is much better financially. Any location that's constantly building new homes (pushing home ownership prices down, and therefore rent prices down) will probably have a market like mine where ownership is in fact the better financial decision.

FireBeyond 5y ago

My mortgage is $3,000/month. My rent at the place I moved out of would have been $2,500/month. That's very little difference, ultimately, when it comes to the equity part of the equation. I've had some upfront costs in the first three months, but none were surprises (appliances, knew that the AC was past its usable life.