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> But these same people tend to be a little surprised when I point out to them that the money spent on home loan interest, property taxes, the cost of maintenan

> But these same people tend to be a little surprised when I point out to them that the money spent on home loan interest, property taxes, the cost of maintenance and upkeep, etc., is also something you'll never get back. Right...but all those things you mentioned are less than rent, and at the end of the mortgage, my continued monthly costs are significantly less than what rent would be. When I put $15K down and borrowed $323K at 4% for 30 years. Over the course of 30 years, including interest and the down payment, I'll pay about $570K. At the time I bought, the rental value was estimated to be $1,800/month. Over 30 years, that's $648K. Property tax is about 1.5%, so that'll add about $152K to what I pay, bringing my total to $730K. But rents go up. I've been in my house 9 years and rental value is currently $2,700/mo. If we say you pay $1,800 for 10 years, $2,700 for another 10 years, then likely $3,600 for the final 10 years, then over 30 years, you'll pay a whopping $932K in rent. Home value goes up, too, which does mean my property tax goes up, though I live in Oregon where the assessed value of my house for property tax purposes cannot rise more than 3% per year. So no matter how much my actual value goes up, after 30 years, my house can only be taxed on a value of $820K, which at a 1.5% tax rate, is $1,230/month. So after 30 years, my mortgage is paid off, I'm only paying property tax of $1,230/mo, while you're continuing to rent at likely $3,600+. The early savings you had is now being absolutely devoured. Meanwhile, I'm holding an asset worth at least $820K. It's illiquid, I'll give you that, but if I found myself needing an influx of cash, I can use it as collateral. Or I can sell it and downsize. I'm open to being proven wrong, but in the long term, I think it's abundantly clear that renting will cost more.

panarky 2y ago
Thank you for using numbers in your argument. Too often all the rent-vs-buy discussion is little more than magical aphorisms about "flushing rent money down the toilet" and "at least I'm building equity" and "buying always works better in the long run". The point is that relative prices change over time. There is no one answer that is always correct. Sometimes relative prices renting is clearly cheaper, even long-term. Sometimes relative prices mean buying is clearly cheaper, even short-term. Housing prices don't necessarily increase every year forever. Rents don't necessarily increase every year forever. Interest rates rise and fall. Economic booms and busts are unpredictable and can outlast your personal planning horizon.
- Sohcahtoa82 2y ago
  > Housing prices don't necessarily increase every year forever. Rents don't necessarily increase every year forever. There will be dips here and there, but I think the general trend will always be up because inflation will always be a thing. > your personal planning horizon. That's really the only thing that matters. And I also think it's why rent vs buy arguments are people talking past each other. The "rent" people are likely assuming a sub-10 year horizon, possibly even sub-5 year, whereas the "buy" people are assuming 15+ years.

panarky 2y ago

Thank you for using numbers in your argument. Too often all the rent-vs-buy discussion is little more than magical aphorisms about "flushing rent money down the toilet" and "at least I'm building equity" and "buying always works better in the long run". The point is that relative prices change over time. There is no one answer that is always correct. Sometimes relative prices renting is clearly cheaper, even long-term. Sometimes relative prices mean buying is clearly cheaper, even short-term. Housing prices don't necessarily increase every year forever. Rents don't necessarily increase every year forever. Interest rates rise and fall. Economic booms and busts are unpredictable and can outlast your personal planning horizon.

Sohcahtoa82 2y ago
> Housing prices don't necessarily increase every year forever. Rents don't necessarily increase every year forever. There will be dips here and there, but I think the general trend will always be up because inflation will always be a thing. > your personal planning horizon. That's really the only thing that matters. And I also think it's why rent vs buy arguments are people talking past each other. The "rent" people are likely assuming a sub-10 year horizon, possibly even sub-5 year, whereas the "buy" people are assuming 15+ years.