4 ms·

The main difference is that you can invest the difference in renting vs owning, and you might come out on top in the long run. It depends on the housing market,

The main difference is that you can invest the difference in renting vs owning, and you might come out on top in the long run. It depends on the housing market, the stock market, and where you are.

carlosjobim 1y ago
How do you invest a negative amount of money into an asset? Because the difference between renting and owning is always a net loss, a negative value each month.
- const_cast 1y ago
  No, it's not, not always is my point. We don't count the asset of having the home because we're comparing that part to the stock market investment. Made up numbers: consider: Mortgage: 2,000 Home price: 200,000 Difference from rent: -500 Rent: 1,500 Home price: 0 Difference from mortgage: +500 If (500/month invested over 30 years) > (200,000 appreciated home price over 30 years) then you came out on top by renting. It might be or it might not be. Also, the type of asset matters. Stock might be a more flexible asset than real estate, in which case you should probably rent depending on your location.
  - carlosjobim 1y ago
    What I'm trying to say is that there is nowhere on the planet where the rent is less than the mortgage. So your situation is impossible, it simply does not happen. If it happened for 10% or 20% of properties, then I agree with your considerations. But it happens for less than 0% of properties.
    - const_cast 1y ago
      For most places in the US rent is lower than a mortgage. Primarily because: - multi-unit buildings are significantly more efficient in cost per-unit. The cost of a 1500 sqft apt and 1500 sqft home is not the same, the home is going to cost a few times more. Because it's on its own lot, with its own land, and it's on the ground, and it gets its only municipalities (gas, water, steam, electricity), and then it also has its own road requirements. Basically with, say, a 12 story block you can get hundreds of units for the same amount amount of land (and associate cost) as a few homes. And then you can spread the cost of municipalities, too. Even with just a duplex or dingbat you're looking at the same land costs and the equivalent accomodations as a few homes. But it doesn't scale linearly, meaning a duplex != the cost of 2 homes. Also large landlords (corps) can spread the cost of price across all their units. Meaning, like Walmart, some are loss leaders for competitive reasons and some make more money than they need to. Interestingly, the cost per unit continues to go down until about 12 stories. Then it goes back up, because of building requirements. Which is why commie blocks were historically 8 to 12 stories tall, it's the cheapest way to build housing.
      - carlosjobim 1y ago
        You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.
        const_cast 1y ago
        Right, I'm just telling you that's that's simply not true. And, if you really want to compare apples to apples, you have to compare properties in the same area. Its easy to make housing look cheap when you compare upper Manhattan to New Jersey. Suddenly that 4,000 dollar apartment looks pretty competitive when the alternative is 5 million mortgage + 3000 a month HOA.
        carlosjobim 1y ago
        How do I get my point through? You can not compare houses to apartments. You can not compare between different regions. You have to compare the exact same unit, the exact same property. Why are you trying to shuffle the cards? Rent is always higher than a mortgage for the same unit.
        const_cast 1y ago
        You can't get anything through because you're simply incorrect. No, housing is not always cheaper, feel free to do some research. Its highly dependent on your city. If you truly think buying is cheaper in Manhattan then I don't know what to tell you. You're just wrong, period. What's happening here is youre comparing suboptimal housing to THE ABSOLUTE most expensive apartments you can find. My parents do the same thing. "Oh housing is so much cheaper, imagine renting in Dallas!" But... We're an hour and a half outside of the city. The reason the housing is cheap is because nobody wants it.
        foxglacier 1y ago

The main difference is that you can invest the difference in renting vs owning, and you might come out on top in the long run. It depends on the housing market, the stock market, and where you are.

carlosjobim 1y ago

How do you invest a negative amount of money into an asset? Because the difference between renting and owning is always a net loss, a negative value each month.

const_cast 1y ago
No, it's not, not always is my point. We don't count the asset of having the home because we're comparing that part to the stock market investment. Made up numbers: consider: Mortgage: 2,000 Home price: 200,000 Difference from rent: -500 Rent: 1,500 Home price: 0 Difference from mortgage: +500 If (500/month invested over 30 years) > (200,000 appreciated home price over 30 years) then you came out on top by renting. It might be or it might not be. Also, the type of asset matters. Stock might be a more flexible asset than real estate, in which case you should probably rent depending on your location.
- carlosjobim 1y ago
  What I'm trying to say is that there is nowhere on the planet where the rent is less than the mortgage. So your situation is impossible, it simply does not happen. If it happened for 10% or 20% of properties, then I agree with your considerations. But it happens for less than 0% of properties.
  - const_cast 1y ago
    For most places in the US rent is lower than a mortgage. Primarily because: - multi-unit buildings are significantly more efficient in cost per-unit. The cost of a 1500 sqft apt and 1500 sqft home is not the same, the home is going to cost a few times more. Because it's on its own lot, with its own land, and it's on the ground, and it gets its only municipalities (gas, water, steam, electricity), and then it also has its own road requirements. Basically with, say, a 12 story block you can get hundreds of units for the same amount amount of land (and associate cost) as a few homes. And then you can spread the cost of municipalities, too. Even with just a duplex or dingbat you're looking at the same land costs and the equivalent accomodations as a few homes. But it doesn't scale linearly, meaning a duplex != the cost of 2 homes. Also large landlords (corps) can spread the cost of price across all their units. Meaning, like Walmart, some are loss leaders for competitive reasons and some make more money than they need to. Interestingly, the cost per unit continues to go down until about 12 stories. Then it goes back up, because of building requirements. Which is why commie blocks were historically 8 to 12 stories tall, it's the cheapest way to build housing.
    - carlosjobim 1y ago
      You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.
      - const_cast 1y ago
        Right, I'm just telling you that's that's simply not true. And, if you really want to compare apples to apples, you have to compare properties in the same area. Its easy to make housing look cheap when you compare upper Manhattan to New Jersey. Suddenly that 4,000 dollar apartment looks pretty competitive when the alternative is 5 million mortgage + 3000 a month HOA.
        carlosjobim 1y ago
        How do I get my point through? You can not compare houses to apartments. You can not compare between different regions. You have to compare the exact same unit, the exact same property. Why are you trying to shuffle the cards? Rent is always higher than a mortgage for the same unit.
        const_cast 1y ago
        You can't get anything through because you're simply incorrect. No, housing is not always cheaper, feel free to do some research. Its highly dependent on your city. If you truly think buying is cheaper in Manhattan then I don't know what to tell you. You're just wrong, period. What's happening here is youre comparing suboptimal housing to THE ABSOLUTE most expensive apartments you can find. My parents do the same thing. "Oh housing is so much cheaper, imagine renting in Dallas!" But... We're an hour and a half outside of the city. The reason the housing is cheap is because nobody wants it.
      - foxglacier 1y ago