4 ms·

If you’re comparing it to renting you still come out on top no matter

noahtallen 3y ago
The numbers I shared in my post are from some basic math! Over 5 years, you spend more money, even if it appreciates by 5% when you sell it. This is because $170k of your mortgage payments went to interest alone, not to mention HOA fees, property tax, mortgage insurance, and maintenance. Unless the house appreciates a lot very fast, or you have very low interest rates, it’s very unlikely that a house in these cities ($650k, for example) will make you money at all in the mid-term, let alone beat renting.
carbine 3y ago
that's just mathematically incorrect as a generalization. it depends on the market, the price-to-rent ratio, interest rates, transaction fees, maintenance fees, taxes, and how long you're actually living in one place. if your burn as a renter is substantially lower you could invest the difference in a non-real-estate asset and make a lot more return, in many cases.
- Sohcahtoa82 3y ago
  There are a lot of factors, but if you don't move, then I can't see any realistic scenario where renting comes out ahead in the long term. In my area, the price-to-rent ratio is nearly 1:1. When I bought my house in 2015, my mortgage payment (30 year fixed) was about $1,500/month (Plus ~$400/month property tax). Zillow estimated the rental value at $1,700/month. From the listings I've seen in my area, Zillow's rental value is pretty close to what people are paying. In my case, I would have been insane to choose to rent instead of buy. The thing to remember is that rent always goes up. 30 years from now, the rent could easily be anywhere from $4,000-7,000/month. Meanwhile I'll be making my final $1,500 mortgage payment. Yeah, if my water heater explodes, I'm on the hook for it. But a single month of savings in the difference between renting and buying years from now would cover the cost.
  - SirMaster 3y ago
    In Wisconsin where I live the rent is like half of what it would cost in monthly costs to buy a house. Renting is so much cheaper in the long run as I can earn so much more on that money difference with various investments like multi-family realestate.
fooker 3y ago
If you live a stable life at the same place for 40 years, yes.
pphysch 3y ago
At current astronomical prices, "buying" means "renting from a bank" and volunteering as unpaid landlord.

The numbers I shared in my post are from some basic math! Over 5 years, you spend more money, even if it appreciates by 5% when you sell it. This is because $170k of your mortgage payments went to interest alone, not to mention HOA fees, property tax, mortgage insurance, and maintenance. Unless the house appreciates a lot very fast, or you have very low interest rates, it’s very unlikely that a house in these cities ($650k, for example) will make you money at all in the mid-term, let alone beat renting.

carbine 3y ago

that's just mathematically incorrect as a generalization. it depends on the market, the price-to-rent ratio, interest rates, transaction fees, maintenance fees, taxes, and how long you're actually living in one place. if your burn as a renter is substantially lower you could invest the difference in a non-real-estate asset and make a lot more return, in many cases.

Sohcahtoa82 3y ago
There are a lot of factors, but if you don't move, then I can't see any realistic scenario where renting comes out ahead in the long term. In my area, the price-to-rent ratio is nearly 1:1. When I bought my house in 2015, my mortgage payment (30 year fixed) was about $1,500/month (Plus ~$400/month property tax). Zillow estimated the rental value at $1,700/month. From the listings I've seen in my area, Zillow's rental value is pretty close to what people are paying. In my case, I would have been insane to choose to rent instead of buy. The thing to remember is that rent always goes up. 30 years from now, the rent could easily be anywhere from $4,000-7,000/month. Meanwhile I'll be making my final $1,500 mortgage payment. Yeah, if my water heater explodes, I'm on the hook for it. But a single month of savings in the difference between renting and buying years from now would cover the cost.
- SirMaster 3y ago
  In Wisconsin where I live the rent is like half of what it would cost in monthly costs to buy a house. Renting is so much cheaper in the long run as I can earn so much more on that money difference with various investments like multi-family realestate.

fooker 3y ago

If you live a stable life at the same place for 40 years, yes.

pphysch 3y ago

At current astronomical prices, "buying" means "renting from a bank" and volunteering as unpaid landlord.