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> If you rent you're left with nothing. Well, no. You're left with the cash you would've spent buying a house. Whether that's financially better or worse, dep

> If you rent you're left with nothing. Well, no. You're left with the cash you would've spent buying a house. Whether that's financially better or worse, depends entirely on the mortgage interest, taxes, and maintenance costs of the house, as well as the money you could have earned investing the cash elsewhere, compared to the rent you would have spent over the same time period.

zeroq 1y ago
that's true only if you were homeless
estimator7292 1y ago
When renting a 1br costs as much as my mortgage on a 3br, I don't think that really tracks.
- klipt 1y ago
  Depends where you live though. In the SF Bay Area, buying requires a monthly payment several times larger than the rent for an equivalent place.
  - crooked-v 1y ago
    The Bay Area market is a bizarre one because of how Prop 13 and extremely thorough renter protections lead to perverse incentives for everyone.
    - HaZeust 1y ago
      Denver is like it too, what's your prescription there?
- sothatsit 1y ago
  "If I set up a scenario largely in favour of buying, then buying makes more sense" I have never seen a 1br costing anywhere near as much to rent as a 3br costs to buy. In what markets is this even remotely close to accurate? Or are you just ignoring the cost of ownership entirely?
- refurb 1y ago
  But a mortage isn't the only cost of owning. Property taxes, maintenance, possibly utilities.
- phil21 1y ago
  Sure, but this is not universal. I could have bought 15 years before I did. But because rent was less than half a mortgage (not even including maintenance), I was able to put that extra money into the market and save enough for more than a down payment on a forever home vs starter home when I was ready. It’s certainly not like for like, but it would have been a poor financial decision to buy vs rent. Where I live now this math is more or less inverted. Makes more sense to buy vs rent. In the end your primary residence is a lifestyle decision, not a financial one. It’s not an investment in the traditional sense. It’s speculation at best.
  - zeroq 1y ago
    I've ran this simulation a number of times through my head: When I left my parents I could have bought a small, sordid 40sqm for 80k in my home town. Before I left my home town few years later a friend of mine bought an absolutely awesome 70sqm for 200k. Then I moved to the capitol city and I was looking at either somehow decent 70sqm for 550k or absolutely stunning 70sqm 850k. Precovid we were looking at the best apt I've ever seen, 85sqm for 950k. But the offer was shortly taken down. It came back few months later at 1.2M and owners called us back. I should have took it on the spot, but I decided play slow only to learn that the price went up to 1.5M. At that time it seemed too much. Post covid gets me a sordid place in suburbs. Point is - if I was told when I was a kid that "investing" in real estate is the best thing you could do and mortgage is nothing you should be afraid of I could have 7 to 9 apts by now without streching too much. I'm fully aware of multiverse - if I got that first apt my life would probably went slightly differrent route, but still. I'd get that first apt when I was earning 5k/mth in 20y mortgage and just in few years I'd be earning 20k/mth. EDIT: I've rent a number of places and went out to see a countless ones. Here it's pretty standard that when you go out to check a place for rent and speak to landlord it turns out he has ten more. If you don't like this one he may have another one that suits your needs better. I have a friend of mine with which we spoke about investing in real estate from time to time but he was hesitant - too much hustle, legal uncertainty (we leave in communist EU mind you), etc. But once his mother died and left him an apt he decided to rent it. He felt too attached to sell it and it needed a renovation anyway. So he decided to rent it as it was, just to keep it and not having to think too much about it. Fast forward two years later he has two more apts he's renting. And his thought process is really simple - I have savings so I can afford to buy these places, random people will pay for the mortgage, I will get some extra cash in the process, and when all is done his daugher will inherit all this apts and be able to live of it.
cramsession 1y ago
Rents are pretty much always going to be higher than a mortgage for the equivalent housing. It's why people are landlords. He dances around that in the article by saying that people buy "nicer" places than they rent, but that doesn't have to be true.
- tomjakubowski 1y ago
  Rent only has to exceed the property's operating costs -- things like mortgage interest, property tax, paying a manager, insurance, repairs and maintenance -- for the landlord to come out ahead. Paying off the principal is a capital expense.
  - cramsession 1y ago
    Landlords charge market rate, which includes mortgages.
- Esophagus4 1y ago
  But a mortgage isn’t the cost of owning a house. Rent payments are the cost of renting. If you want to compare the costs of renting and buying, you need to compare renting=(rent payments + renter’s insurance) vs. owning=(mortgage payments + property taxes + insurance + maintenance and repairs + equity appreciation / depreciation)
  - cramsession 1y ago
    Landlords bake those costs into the rent price.
    - Esophagus4 1y ago
      Too hand waivey and doesn’t tell the whole story - even with the carry costs “baked in”, renting is generally cheaper in the short run because those costs are lower anyway. > Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros in 2025, with the cost difference between the two growing in all but 12 of those metros since last year, according to Bankrate’s Rent vs. Buy Study. > Over the last year, the study found average mortgage payments (including principal, interest, homeowners insurance and property taxes) increased while average rents either declined or remained stable in nearly all the metros we analyzed. > Housing experts said the fact that it’s cheaper to rent in all 50 metros in 2025 is a broader reflection of rental and housing market conditions across the country. [1] https://www.bankrate.com/real-estate/rent-vs-buy-affordability-study/ https://www.bankrate.com/real-estate/rent-vs-buy-affordabili...
whymarrh 1y ago
You’re right, the math is slightly more complicated than rent v. mortgage payment. Ben Felix, a popular financial YouTuber, made many a video about the math: https://youtube.com/watch?v=j4H9LL7A-nQ https://youtube.com/watch?v=j4H9LL7A-nQ https://youtube.com/watch?v=lBG-g1CKfgs https://youtube.com/watch?v=lBG-g1CKfgs
carlosjobim 1y ago
What? That cash goes to the landlord.
- foxglacier 1y ago
  In the same way the interest payments on a mortgage go the the bank. And the interest is often the majority of the payments people make on a mortgage. If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose.
  - bluefirebrand 1y ago
    > In the same way the interest payments on a mortgage go the the bank Yeah, but at least you own something at the end of it > And the interest is often the majority of the payments people make on a mortgage Only if you're stupid and only ever pay the bare minimum. Of course many people unfortunately are
    - foxglacier 1y ago
      No you don't own something at the end of it. Interest is the cost of having use of the house. If you sell the house and settle your mortgage, the bank won't give your interest back. It's lost for good.
  - carlosjobim 1y ago
    Paying rent is the same as paying 100% interest. You lose everything you have paid, it counts towards nothing for you. Paying a mortgage, you pay part amortization and part interest. Even if only 10% of your monthly payment is amortization each month, it's better than paying rent. > If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose. Such a market doesn't exist anywhere on this planet. Rent is always higher than mortgage + interest.

zeroq 1y ago

that's true only if you were homeless

estimator7292 1y ago

When renting a 1br costs as much as my mortgage on a 3br, I don't think that really tracks.

klipt 1y ago
Depends where you live though. In the SF Bay Area, buying requires a monthly payment several times larger than the rent for an equivalent place.
- crooked-v 1y ago
  The Bay Area market is a bizarre one because of how Prop 13 and extremely thorough renter protections lead to perverse incentives for everyone.
  - HaZeust 1y ago
    Denver is like it too, what's your prescription there?
sothatsit 1y ago
"If I set up a scenario largely in favour of buying, then buying makes more sense" I have never seen a 1br costing anywhere near as much to rent as a 3br costs to buy. In what markets is this even remotely close to accurate? Or are you just ignoring the cost of ownership entirely?
refurb 1y ago
But a mortage isn't the only cost of owning. Property taxes, maintenance, possibly utilities.
phil21 1y ago
Sure, but this is not universal. I could have bought 15 years before I did. But because rent was less than half a mortgage (not even including maintenance), I was able to put that extra money into the market and save enough for more than a down payment on a forever home vs starter home when I was ready. It’s certainly not like for like, but it would have been a poor financial decision to buy vs rent. Where I live now this math is more or less inverted. Makes more sense to buy vs rent. In the end your primary residence is a lifestyle decision, not a financial one. It’s not an investment in the traditional sense. It’s speculation at best.
- zeroq 1y ago
  I've ran this simulation a number of times through my head: When I left my parents I could have bought a small, sordid 40sqm for 80k in my home town. Before I left my home town few years later a friend of mine bought an absolutely awesome 70sqm for 200k. Then I moved to the capitol city and I was looking at either somehow decent 70sqm for 550k or absolutely stunning 70sqm 850k. Precovid we were looking at the best apt I've ever seen, 85sqm for 950k. But the offer was shortly taken down. It came back few months later at 1.2M and owners called us back. I should have took it on the spot, but I decided play slow only to learn that the price went up to 1.5M. At that time it seemed too much. Post covid gets me a sordid place in suburbs. Point is - if I was told when I was a kid that "investing" in real estate is the best thing you could do and mortgage is nothing you should be afraid of I could have 7 to 9 apts by now without streching too much. I'm fully aware of multiverse - if I got that first apt my life would probably went slightly differrent route, but still. I'd get that first apt when I was earning 5k/mth in 20y mortgage and just in few years I'd be earning 20k/mth. EDIT: I've rent a number of places and went out to see a countless ones. Here it's pretty standard that when you go out to check a place for rent and speak to landlord it turns out he has ten more. If you don't like this one he may have another one that suits your needs better. I have a friend of mine with which we spoke about investing in real estate from time to time but he was hesitant - too much hustle, legal uncertainty (we leave in communist EU mind you), etc. But once his mother died and left him an apt he decided to rent it. He felt too attached to sell it and it needed a renovation anyway. So he decided to rent it as it was, just to keep it and not having to think too much about it. Fast forward two years later he has two more apts he's renting. And his thought process is really simple - I have savings so I can afford to buy these places, random people will pay for the mortgage, I will get some extra cash in the process, and when all is done his daugher will inherit all this apts and be able to live of it.

cramsession 1y ago

Rents are pretty much always going to be higher than a mortgage for the equivalent housing. It's why people are landlords. He dances around that in the article by saying that people buy "nicer" places than they rent, but that doesn't have to be true.

tomjakubowski 1y ago
Rent only has to exceed the property's operating costs -- things like mortgage interest, property tax, paying a manager, insurance, repairs and maintenance -- for the landlord to come out ahead. Paying off the principal is a capital expense.
- cramsession 1y ago
  Landlords charge market rate, which includes mortgages.
Esophagus4 1y ago
But a mortgage isn’t the cost of owning a house. Rent payments are the cost of renting. If you want to compare the costs of renting and buying, you need to compare renting=(rent payments + renter’s insurance) vs. owning=(mortgage payments + property taxes + insurance + maintenance and repairs + equity appreciation / depreciation)
- cramsession 1y ago
  Landlords bake those costs into the rent price.
  - Esophagus4 1y ago
    Too hand waivey and doesn’t tell the whole story - even with the carry costs “baked in”, renting is generally cheaper in the short run because those costs are lower anyway. > Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros in 2025, with the cost difference between the two growing in all but 12 of those metros since last year, according to Bankrate’s Rent vs. Buy Study. > Over the last year, the study found average mortgage payments (including principal, interest, homeowners insurance and property taxes) increased while average rents either declined or remained stable in nearly all the metros we analyzed. > Housing experts said the fact that it’s cheaper to rent in all 50 metros in 2025 is a broader reflection of rental and housing market conditions across the country. [1] https://www.bankrate.com/real-estate/rent-vs-buy-affordability-study/ https://www.bankrate.com/real-estate/rent-vs-buy-affordabili...

whymarrh 1y ago

You’re right, the math is slightly more complicated than rent v. mortgage payment. Ben Felix, a popular financial YouTuber, made many a video about the math: https://youtube.com/watch?v=j4H9LL7A-nQ https://youtube.com/watch?v=j4H9LL7A-nQ https://youtube.com/watch?v=lBG-g1CKfgs https://youtube.com/watch?v=lBG-g1CKfgs

carlosjobim 1y ago

What? That cash goes to the landlord.

foxglacier 1y ago
In the same way the interest payments on a mortgage go the the bank. And the interest is often the majority of the payments people make on a mortgage. If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose.
- bluefirebrand 1y ago
  > In the same way the interest payments on a mortgage go the the bank Yeah, but at least you own something at the end of it > And the interest is often the majority of the payments people make on a mortgage Only if you're stupid and only ever pay the bare minimum. Of course many people unfortunately are
  - foxglacier 1y ago
    No you don't own something at the end of it. Interest is the cost of having use of the house. If you sell the house and settle your mortgage, the bank won't give your interest back. It's lost for good.
- carlosjobim 1y ago
  Paying rent is the same as paying 100% interest. You lose everything you have paid, it counts towards nothing for you. Paying a mortgage, you pay part amortization and part interest. Even if only 10% of your monthly payment is amortization each month, it's better than paying rent. > If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose. Such a market doesn't exist anywhere on this planet. Rent is always higher than mortgage + interest.