19 ms·

The real cost of owning a home

• 78Degrees 5mo ago
  [flagged]
• bell-cot 5mo ago
  > You can save a lot of money in maintenance and repairs by doing your own work whenever possible. True. But even if you have the physical ability, skills, tools, and equipment handy - you can spend a lot of time on maintenance & repairs. Just ask anyone who's done yard work for a few years, or has repainted a house, or ...
  • kube-system 5mo ago
    Yeah I was surprised not to see the opportunity cost angle in this article. For high income tech workers the opportunity cost can be huge
    • com2kid 5mo ago
      Depending on the job, you can also do it better yourself than what you can reasonably pay for. I built a custom shelf for my closet. It'd have costed me an arm and a leg to have someone else do that, even with a tech worker's salary. I also built a custom walk-in closet. It took me a day, saved me over 2k and I got a better quality closet out of it. (You find find built yourself a walk-in-closet kits that are easy to assemble, it really isn't that hard, just don't get the home depot level quality ones.)
      • kube-system 5mo ago
        It definitely depends on the job. Enjoyment is certainly a factor too.
        • com2kid 5mo ago
          There is that famous study from a few years back where people value IKEA furniture they put together themselves more highly than pre-built stuff of a better quality.
    • jandrese 5mo ago
      Depends if you would be getting paid during the time spent doing these projects. People with flexible vacation time might even be getting paid while doing the work. But otherwise weekends and evenings are great times for smaller home projects.
      • kube-system 5mo ago
        There are other opportunity costs other than direct monetary income. For example, to mow your lawn, you have to find a time to do it every couple of weeks when the weather cooperates, be at home at that time, store and maintain the equipment, have a pair of "grass shoes", clean up afterwards, etc. This might be worth the effort if you don't have much disposable income. But if you have money to blow, hiring someone to mow your lawn can give you more time to do something else you'd rather do.
  • jandrese 5mo ago
    That maintenance has to happen one way or another, hiring someone to do it can add quite a multiplier to the price. For example, I was recently looking at water heaters and called 4 different plumbers to get a quote. All of them came in around $5,000 for the job. The water heater they quoted costs $1,000 retail at Lowes. If you know what you are doing it isn't even difficult to install. That said a layperson probably won't know the new code requirements in their jurisdiction and if you sell your house you'll have the inspector tut-tutting the work for one reason or another.
    • FireBeyond 5mo ago
      Hah, although, admittedly, when my AC died here I was looking at quotes for $17K for replacement (although I did also do the furnace at the same time, since both were early 1980s and basic models even then). "Why? I could buy the AC for $4K". "Surely it wouldn't be too hard to undo/redo piping etc." But yeah, different refrigerant, different code requirements for vents and exhausts and drains. 4 people working for 16 hours, I saw where the money went.
    • bell-cot 5mo ago
      > If you know what you are doing it isn't even difficult to install. How much time does it take to acquire & refresh the skills and code knowledge, and how many water heaters can you amortize that over during your life?
      • jandrese 5mo ago
        The skill is in being able to solder pipes together, something that is useful to learn as a general skill. It doesn't even need specialized equipment, just a torch, some flux, and a spool of plumbing solder. There is also a tiny bit of electrical work, but that's literally just matching the colors and using a couple of wire nuts. The building code stuff is more of a bugbear.
        • bell-cot 5mo ago
          > The skill is in being able to ... Admitting that one of my grandfathers was a blacksmith and the other a farmer, that my own father could have built a house from the ground down (I helped him dig and pour a foundation once) and then up, etc. - most modern Americans just don't have the backgrounds/aptitudes/comfort levels needed to try and succeed at such tasks.
  • 01100011 5mo ago
    I spent my 30s playing "this old house" when I could have made significant amounts of money just working more consulting hours. Yeah, I enjoy some home improvement and maintenance tasks, but I also enjoy financial security and pain-free joints. The tools and things required to maintain a home also take space you could use for hobbies or simply downsize. Home maintenance makes sense for folks with lower value skills and less means to side hustle though.
  • masterj 5mo ago
    I learned very fast after purchasing my home that hiring out to a contractor made so much more sense. They can get done in a day what would take me a month+ of weekends.
• someuser54541 5mo ago
  Aren't quite a few of these concerns alleviated by owning a condo?
  • retr0rocket 5mo ago
    [dead]
  • janalsncm 5mo ago
    A condo will have an HOA which is responsible for things like fixing the roof. However, not all HOAs are actually financially responsible. So they might raise monthly fees, issue “special assessments” (lump-sum charges that can be $10k+) or take on loans. And they decide when they will do that.
  • brokenlink 5mo ago
    Yes, but so are some of the advantages (e.g. "More space and a quieter environment"). It's somewhere in between home ownership and apartment renting on the spectrum of living situations.
  • bgirard 5mo ago
    Which ones? Mortgage, real estate costs, repairs, maintenance are all still there with a condo. My gut feeling is that repairs and maintenance cost more with condos than if you own a home and you're handy to fix minor stuff and know how to find good contractors for bigger jobs. I imagine condo jobs becomes more difficult and contractors charge more for those jobs. But I don't have data to back my hunch. Condo has extra issues in dealing with neighbor problems (issues with garbage, pets, unpaid fees, noise, etc...) and you have to maintain shared spaces (hallways, elevators, etc...) and you end up paying for that via your condo fees.
    • Marsymars 5mo ago
      "Finding good contractors" can be pretty challenging, especially finding good contractors at a good price. Condos can also benefit from efficiencies of scale - e.g. there are plenty of small jobs on myself that I do myself, but between the time spent on research, and expenses/trips to pick up supplies and tools, I'm spending multiple hours of my time/money on things that someone experienced/equipped could bang out in 20 minutes - but any decent handyman is going to charge their call out rate of $100 + materials for a 20 minute job. vs at appropriate scale a condo corp can effectively just have/share a full-time handyman and save a pile of overhead.
• M4R5H4LL 5mo ago
  With a mortgage, you are forced to save money. In other words you have no way around being disciplined. So yes in theory you could probably make more money with aggressive investing, but chances are most people would risk too much and lose a lot and never have the mental discipline of saving the excess they have no matter what happens in their life.
  • kube-system 5mo ago
    Only on paper. You can borrow from your property’s value by neglecting maintenance, and that is sometimes even harder to notice than dollars in a bank account. This is one of the ways condo ownership can bite you.
  • mothballed 5mo ago
    And then hope you're not one of the ~1/3 that end in a divorce at which point your house gets firesold to first low-balling flipper. House can be really bad anytime it's multiple people liquidating it -- I watched some other family members inherit a house and it sold for about half it's value because some family members weren't willing to wait more than a millisecond for the inheritance payout.
  • 01100011 5mo ago
    I made plenty of money (and still do) holding US treasuries and other safe investments. You don't need to gamble on stocks to have income from cash which offsets rent.
    • hunterpayne 5mo ago
      For most of my life, fixed income was outperformed by inflation. Indexed funds returned double fixed income over that entire period. Either you are in your 20s or you aren't nearly as good at investing as you think.
      • 01100011 5mo ago
        I'm fine with keeping most of my post-tax cash pile in cash equivalents. I don't think you understand investing if your only measuring stick is returns. You do sound like a finance bro though given you took time out of your day to trash talk someone for something they didn't even claim.
• mholm 5mo ago
  Beyond the financials, the psychological impact of both being able to make greater-than-superficial changes, and having extremely predictable payments for years without worrying about substantial rent increases, is substantial. I redid/improved the bathroom to exactly what I wanted. I renovated the kitchen. I added paneling to the walls. I added a few outlets to rooms that needed more. I wouldn't do these things in an apartment, because rent could go up any year and exploit me for liking my home. Property value has gone up by 50% in the years since I bought.
  • elicash 5mo ago
    > I redid/improved... We are extending the fence in our backyard. However, getting rid of the parking means the project will likely detract from the value of the home. But since we don't have a car, let alone two, it makes sense for us to do the project anyway. Despite the warning of our realtor when we purchased the home. I've noticed a lot of folks are afraid to personalize their homes because of concern about the value when they eventually sell.
    • throwaway894345 5mo ago
      Yeah, I agree with this. We have one car and no kids and every time we talk about some remodel. For example, we're talking about remodeling our kitchen and getting rid of our wildly oversized (read "normal American") appliances in exchange for more storage, counter, and floor space but the first thing friends and family talk about is resale value. Firstly, my home isn't principally an investment vehicle. Secondly, I'm pretty sure I can find a buyer who can conceive of popping over to the grocery store around the corner a couple times a week rather than pretending like they're living off the grid and have to drive 100 miles to the nearest town to buy their monthly provisions for a family of 13. :)
    • globular-toast 5mo ago
      There was quite a funny reddit thread where the OP was afraid to put up shelves because of property value.
      • 5mo ago
• com2kid 5mo ago
  It is suggested to set aside 1%-3% of your home's overall value for repairs every year. Most people do not do this, and many homes thus slowly degrade in value. It is a fast track way to destroy potential generational wealth. Home repair issues also tend to be bursty (rule of three...). You'll have a few years of nothing that'll lull you into a false sense of security, then suddenly three major issues will come up. So far this year I've had nearly 10K in random expenses pop up (!!) and based on the life expectancy of my HVAC system I expect I'll have some more major expenses next year. If there is one near to you, join a tool library. It is a huge savings over buying specialized tools for one off jobs. Tool libraries are an amazing community resource. Find a good reliable handy man, even if you know how to do things yourself. Hopefully one you can trust with your door code so if your neighbors report running water while you are away on a trip you have someone you can call who you know will take care of it.
  • bluGill 5mo ago
    Most home repairs give warning. My roof is old but it wasn't hard to inspect it and conclude it is good for another year. If I have to replace it soon insurance will cover it.
  • tetha 5mo ago
    A friend of mine had an interesting point there. It was more on a personal note that either of us had a hard time spending money on nice things for ourselves. Like, do you need better headphones, do you need this, do you really need that? Better not buy anything nice or fun. A fairly unintuitive resolution to this is to setup a "fun and nonsense" budget and force yourself to spend it every half year, or to make a conscious plan on how to spend it over the year. If you plan the budget right, it won't hurt you, but it will force you to make your life better. Maintenance, especially of owned property, seems similar to me. You should be saving up for the real "oh shit" situations, and you should accumulate a budget to just do things continuously. 6 months of routine maintenance budget saved up, what do we spend it on actively, before it becomes a mess?
  • hypeatei 5mo ago
    > Most people do not do this, and many homes thus slowly degrade in value I agree with the first part, people absolutely do shoddy work or none at all but the value doesn't seem to go down. My mother bought a house had it inspected beforehand but massive issues with the foundation and the roof showed up the following spring when there was heavy rain. Sure, all that can be fought with attorneys and insurance (both cost time and money) but it doesn't feel very good psychologically or physically to be dealing with so much paperwork and house repairs. Sorry to rant, I think your comment is spot on... owning a house is expensive.
• farceSpherule 5mo ago
  [dead]
• malfist 5mo ago
  This is nonsense. The person counts the 12 month escrow prepayment during closing as "cost to get a loan" It's not. It's the cost of 12 months of taxes and insurance on your property. Also notable is the "1 year insurance premium" either they're double counting the escrow, or this 1 year insurance premium is mortgage insurance where the bank makes you take out insurance to protect them. This can be prepaid, split paid, paid monthly, or you could put down 20%. The lender makes you purchase title insurance for them, but this person also purchased title insurance for themselves. This is mostly just pure profit for the title company. The cost for the insurance is for the company to do the research, if they found an issue, they wouldn't insure the bank. Buying it for yourself is mostly just lighting money on fire. A lot of those closing costs are shoppable, you can find better lenders. Before closing, you're given a truth in lending disclosure with all this carefully spelled out. If you don't do even basic due diligence, I question if you have the financial literacy to own a home. I'll also note, they didn't mention in their closing costs paying for a home inspection (beyond termites). This is likely why they had to pay for real repairs on the house. One of their "repairs" is new water pipes. There's no reason listed for this, but this is often pushed by door to door salesmen telling you need to do it to protect your property/health and is mostly, like all door to door sales, a scam. That note about counting the cost of heating and cooling is similarly nonsense. They claim "apartments are almost always smaller than houses" which isn't true, and count electricity rate increases as cost of ownership, rentals have to pay that too. They also assert, with clearly no evidence that heating and cooling is half their electric bill. There's easy ways to figure this out, an emporia can do it easily. The whole premise is flawed. They note that in the beginning only 20% of their payment goes to principle and A) you can control that (bigger downpayment so no PMI, less interest), bigger more frequent payments or a shorter loan, and B) exactly 0% of your rent payment goes to your principle. This might better be an examination of "can I afford a mortgage with the same rent payment as I make today" and the answer, not surprisingly, is no, if your rent payments are a the top end of what you can afford.
  • horsawlarway 5mo ago
    I agree, this is a pretty terrible article that basically boils down to (to quote the article...) > I bought this house new, and didn't live there very long End of story.
• cosmic_cheese 5mo ago
  On the other hand, renting comes with hidden (and some not so hidden) costs too. The main one for me is the inherent precariousness that comes with renting. You don’t know how much longer you’re going to be able to stay in your apartment, whether that be due to rent hikes or the landlord deciding that they want to give the apartment to their nephew or any number of other things. The constant low level stress of knowing that you might need to go through the hell of apartment hunting and moving annually is awful. It’s been much nicer to have a mortgage with more or less locked in monthly payment, even with the maintenance costs that come with the territory. It’s more predictable and frees up mental bandwidth for other things.
  • elicash 5mo ago
    Most folks rent before they buy, and so they are aware of the hazards of renting.
    • sowbug 5mo ago
      An important qualification: if you rented as a kid, and now your kids are old enough to rent, your maybe-not-horrible experience is dated and probably no longer applicable. Apartments have largely gone corporate, and I assume also been taken over by private equity. Even cell-phone companies could learn a thing or two from their tactics.
      • zeroonetwothree 5mo ago
        I have had very good experiences with corporate apartments. They tend to have their shit together. Compared to renting from some random old guy that wants to “fix things himself”
        • arwhatever 5mo ago
          Corporate apartments raise their rents in lockstep with the market, whereas at least some randos will leave it stable for some years in a row.
• relium 5mo ago
  I think 1% per year is insufficient for repairs. Even a paint job will cost more than that these days. There's also a potential HOA fee, even in many neighborhoods with freestanding homes. But there are tax benefits of home ownership too. The interest deduction used to very significant, although less now since they raised the standard deduction. There's also a $250K/500K non-taxable capital gains benefit when you sell a house for more than you paid.
  • francisofascii 5mo ago
    Painting is one of the home improvment tasks that most people can do without hiring out, especially since it is typically a discretionary.
    • happytoexplain 5mo ago
      It sounds like the parent is referring to exterior, and you're referring to interior?
    • zeroonetwothree 5mo ago
      It’s fairly unpleasant at least in my opinion. I don’t want to spend hours breathing fumes. Also it’s boring and repetitive. And finally, IME professional painting is far higher quality (especially if you are texturing or have any complex shapes to paint around).
  • IAmGraydon 5mo ago
    There are years where I don't have to spend that much and sometimes there a year here or there where I do a major project (roof, new patio, etc) that goes way over, but an average of 1% per year seems right to me.
  • gib444 5mo ago
    Some people get lucky. I'm not lucky and I've probably spent more like 2.5% on average. There's always a loud minority that love to boast that all they had to do was replace a washer back in '86 for 50c
  • 5mo ago
• leugim 5mo ago
  There's also the difference of Condo vs Home.
  • nayuki 5mo ago
    A condo is a type of home, so it's like you're saying "Do you drive a car or a vehicle?". Also, condominium does not automatically imply apartment, because there are condo townhouses and condo detached houses. A condominium is a legal structure that prescribes which parts are owned jointly and which parts are owned individually. https://en.wikipedia.org/wiki/Condominium https://en.wikipedia.org/wiki/Condominium
• bpt3 5mo ago
  Yep. Yet many on here (and other specific online forums) will tell you that your only options should be owning a home or renting an apartment because they don't feel the single family home they desire is within their price range, and resort to advocating for short-sighted, draconian policies as an means to an end that is favorable for them.
• RIMR 5mo ago
  >You've probably heard someone say something to the effect of "renting is just throwing your money away". Don't believe it. It's a glib statement that simply isn't true. If you take literally anything away from this article, this opening line is it. People who say this bought their house decades ago and have no clue what the present situation is.
  • whywhywhywhy 5mo ago
    You're still paying a mortgage if you rent it's just someone else's mortgage.
    • RIMR 5mo ago
      Someone else's risk. Someone else's liability. I can end my lease and walk away without penalties or obligations. If anything happens to the property, it isn't my problem. I just need <$200/year renter's insurance, and my landlord is literally responsible for everything else, including things like my washer and dryer. I can move on a whim, and the worst-case costs will be a modest lease termination fee and literal moving costs.
      • whywhywhywhy 5mo ago
        You also never see any of that money ever again, with a mortgage a % of the money spent a money gets converted into the best asset for retaining wealth there is. Worst possible situation you can get in with a house: not being able to just walk away, difficulty to sell if the area has gone bad, even with all these the worst thing you can do is just walk away from the house and even then you're just back to the same position you'd be in if you had rented, you'd have nothing.
  • jandrese 5mo ago
    I don't know. I get a reminder of what housing inflation looks like every year when the annual tax assessment goes up another 6-8%.
  • some_random 5mo ago
• kylehotchkiss 5mo ago
  When I was a homeowner (I recently exited), I found it incredibly discouraging how every vendor who came over for this or that looked at you like a walking sack of dollar bills after driving up to your home in a brand new pickup truck. When you do hire them, the owner never even shows up for a final inspection. There's a large part of the economy who knows their customers will treat their equity like a bank and prices accordingly.
• FrustratedMonky 5mo ago
  Is there someplace that takes all of these inputs. Then graphs them over 10 or 20 years and include some adjustment for inflation? I didn't see in article any discussion about mortgage rates versus appreciation versus inflation. Article did sum all the inputs/outputs, and came out at loss. I'm just wondering if there is some other trends over 10 or 20 years that make the house better.
  • carabiner 5mo ago
    https://rentvsbuycalculator.app/ https://rentvsbuycalculator.app/ Based on the nytimes version from 20 years ago but updated since then. Actual rent vs. buy outcomes vary by location, but the general rule is that in most desirable urban areas, it's financially better to rent.
  • m_w_ 5mo ago
    Not all the inputs, but Ben Felix’s company (makes videos on this topic) has a rent vs buy calculator, mainly focused on investing the cost difference for mortgage vs renting: https://research-tools.pwlcapital.com/research/rent-vs-buy https://research-tools.pwlcapital.com/research/rent-vs-buy
  • babelfish 5mo ago
    https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal...
• carabiner 5mo ago
  People act like owning a home and coming out financially ahead is an inviolable law of physics. It is not. Buying a house is like purchasing an option to have something at a set price in the future. That option can be overpriced to the point where it is not profitable. This isn't to say that there are not emotional aspects to owning, but that is a separate discussion.
• some_random 5mo ago
  You will own nothing and be happy.
  • chipper02 5mo ago
    This^^^ The article is just more globalist tripe espousing owning nothing. - A happy home owner (not a boomer)
  • Vaslo 5mo ago
    Came here to say this but you beat me to it- sorry to the author but home ownership gives you a real tangible piece of equity for the rest of your life if you maintain it reasonably well. This is especially true for people who aren’t good with saving money.
• ramesh31 5mo ago
  Having your own home and property where no one on earth can tell you how to live: priceless. Maybe home ownership is becoming a luxury, but humans don't exist in financial spreadsheets. The intagibles of SFH ownership are worth literally everything to me after a lifetime of renting. It's also absolutely a class differentiator in the US. If you're behind on your rent and getting evicted, that's seen as a personal moral failure. If you're behind on your mortgage and getting foreclosed, it's considered a tragedy, and there are many options for support like forebearance. Just look at what happened during COVID; red state renters were getting knocked on by the sheriff within 90 days, while it can take years for someone to lose their house.
  • cucumber3732842 5mo ago
    >Having your own home and property where no one on earth can tell you how to live: priceless. Whatever you do don't read your local zoning code. If you really want motivation to browse large bulldozers on Facebook Marketplace look into the legal doctrines that underpin these codes. It's pretty mind boggling.
  • kylehotchkiss 5mo ago
    You've never had a HOA have you
    • ramesh31 5mo ago
      Nope, never would.
• mothballed 5mo ago
  I zero'd out almost all these costs by building a shack myself and leaving it uninsured. Maintenance cost almost zero because I own all the tools and much the spare materials already form building the house. Cost of house $60,000 post COVID, there is a similar ready-built house next to me for sale almost $300,000.
  • zeroonetwothree 5mo ago
    I was waiting for the classic “why would you pay for Dropbox” comment
• danesparza 5mo ago
  Buying a home is a hedge against inflation. Renting has no similar protections. Your choices are, "Pay the (increased) rent" or "Move"
  • 01100011 5mo ago
    Rent control changes the math on this. Obviously location dependent but it can have a significant effect.
    • bigfishrunning 5mo ago
      Rent control causes other problems, such as lack of supply and lack of maintenance.
    • hunterpayne 5mo ago
      The markets with rent control have astronomical increases in rent when compared to markets without rent control. Also, you lose supply when there is a unit that it doesn't make sense to renovate because the future rent won't be high enough to cover it. So it remains unrented instead.
      • julianeon 5mo ago
        Sure, but from the perspective of the individual renter (who arguably doesn't have the power to change rent control law anyway), their point stands.
      • danesparza 5mo ago
        I mean, I would argue that's why rent control exists in the first place: Because there is a market with astronomical increases in rent (not the other way around, like you are suggesting)
    • danesparza 5mo ago
      Absolutely. Other things that change the math: - Only allowing individuals to rent living spaces (no corporations) - Only allowing individuals to buy houses (no corporations) - Not allowing corporations to buy influence in Washington DC Anything that puts the focus back on what's the ethically and morally right thing to do for humans changes the math. And don't get me wrong: I'm a capitalist. But for some reason, some capitalists really get upset with this kind of language. I wonder why?
• horsawlarway 5mo ago
  > I bought this house new, and didn't live there very long End of story. That's the entire conversation right there. Note how much money he made on the house he lived in for a decent amount of time... (~330k, minus minor investments on repairs) Renting is better than buying if you're not going to live in the house for any real duration (real meaning 5+ years). Otherwise... at least in the US... the financials around 30 year mortgages and a target inflation rate mean buying is going to work in your favor. Will this blow up at some point? Meh, maybe? But for now, owning is FAR better assuming you actually hold onto the property. The longer you hold, the better it gets.
  • hylaride 5mo ago
    > Otherwise... at least in the US... the financials around 30 year mortgages and a target inflation rate mean buying is going to work in your favor. Yeah, subsidized mortgages (via government insurance and mortgage interest deductibility) tilt the market towards home ownership in most of the USA. Most of the rest of the world doesn't intervene in its housing market as much and the ROI on owning vs renting can shift. Switzerland will tax your home on the potential rental income of your home, whether you rent it out or not (I think this recently changed, though). The home ownership rate is historically between 30-40%. Basically farmers and the upper quartile of income earners are the majority of owners. The result is that most Swiss have their wealth in more liquid assets and are also highly mobile for work. > Will this blow up at some point? Meh, maybe? Owning is also turning into a problem for many Americans. Some people are trapped in their homes because moving means resetting locked in low interest rates. Insurance has made home ownership extremely expensive in much of the states that were fastest growing over the past decade. I'm sure solutions (good and bad) will come, but sometimes it's nice to just be able to hand in notice and walk away.
    • Leherenn 5mo ago
      > I think this recently changed, though Yes, it will take effect in 2028. Although that's unfortunate, it was a good tax to equalise tax treatment of owners vs renters. The Swiss market is also different in many ways: no capital gains taxes except on real estate, which really shifts the invest against house appreciation towards renting. > Basically farmers and the upper quartile of income earners are the majority of owners. I'm not certain the second part is very true. Of course, given how prices are you need to be rich to buy, but I think the bias is a lot more towards age than income: those that own are overwhelmingly those that bought a long time ago or inherited. Finally, rent control results in some crazy price to rent ratios in the big cities: Zürich is around 35. But as usual with rent control, it's if you can find the right place.
• whalesalad 5mo ago
  I have a ~2000 sq foot ranch. A new roof was $25k. New siding was $55-85k depending on the material (vinyl vs james hardie). Gutters are $7k. I had a bunch of trees removed and a forestry mulcher out: $7k. Everything is so fucking expensive.
• bix6 5mo ago
  “Smart” people always tell us to rent. But ask any regular person if they’d rather own a home or rent and they will say own. Who cares about xyz costs or a lower investment return. The entire point is to have a stable base from which you and your family can thrive.
  • zeroonetwothree 5mo ago
    Smart people always tell us to buy a cheap used Honda. But ask any regular person and they will say they’d rather have a new Porsche.
    • deleted 5mo ago
      [deleted]
    • bix6 5mo ago
      O so they suggest buying instead of renting as well? Thank you :)
  • SirMaster 5mo ago
    I'm just a single guy, why do I need more than a small apartment which is like 1/4 the monthly cost of a home mortgage payment. I put the other 3/4 of that cost into index funds. Also saves me time not having to do things like mow and shovel which is quite valuable to me.
    • bix6 5mo ago
      I said family which isn’t a reality for you yet.
      • SirMaster 5mo ago
        I suppose you do say family. For me I don't really plan on having a family, so it semes like renting will always be a better option. Perhaps mainly because they don't really make houses small enough to match the cost of renting, or at least not in the area I want to be in.
• Glyptodon 5mo ago
  While this is true, I think the bar should be lower - the real question should be "and how does it compare to renting" - there is very possibly a universe where owning is cheaper than renting even if your home depreciates. Because paying some amount for years to be left with a fraction of what you put in is better than getting none of what you put in. However many of us knowingly exceed that point. For example we pay ~$500/mo over that point. Though there is no really comparable rental, we definitely could have chosen a more cookie cutter rental to be about +$6000 / year.
  • zeroonetwothree 5mo ago
    We would expect them to be equal on the margin if the market is even somewhat efficient (not always true with rent control, but still pretty close in most places). That doesn’t mean it’s equal for any given individual of course. So it’s important to do your own calculations and make your own decisions. But I think the fact that it is debated so much shows that it is probably roughly equal on the margin.
• Havoc 5mo ago
  The numbers miss a key aspect - risk management Landlords do whatever the hell they like with zero consequences. Thats not a game I’d like to play with a 40 year horizon of unknowns. With a mortgage the risk is interest rates. And on that I’m confident I can carry far more exposure than my peers. So if that blows up in my face then the entire country’s financial system is cooked anyway
  • archagon 5mo ago
    And that’s why we have rent control.
    • Havoc 5mo ago
      And by "we" you mean what random cities making up a couple percent of accommodation globally?
    • stevenhuang 5mo ago
      Rent control is nice for the select few that get it but results in worse overall conditions for renters by distorting market conditions. It's a stop gap band-aid feel good measure, not an effective long term solution. More housing supply and densification is the solution.
      • archagon 5mo ago
        More housing supply is not a solution to landlords deciding to evict tenants or raise the rent for arbitrary reasons. ("The housing market is great for sellers right now and I want to sell my house." "My niece wants to live in the city." "I don't want tenants with pets/children." etc.) Renters deserve stable housing just as much as homeowners and that requires some degree of regulation.
        • stevenhuang 5mo ago
          > More housing supply is not a solution to landlords deciding to evict tenants or raise the rent for arbitrary reasons. Irrelevant. Sensible tenancy laws are important but are unrelated to discussions of housing affordability. To fix the affordability crisis the long term solution is to address the structural issues caused by imbalanced supply vs demand as result of market distortions.
• 0x59 5mo ago
  In the US, median homeowner tenure is about 12 years. If the local price-to-rent ratio is high, (greater NYC metro for example) then you may have to stay 20 years to come out ahead financially. In a case like that, renting can be a very attractive strategy for building wealth.
  • aidenn0 5mo ago
    It's more complicated than that. If you sell-to-buy then the tenure only affects the costs related to the purchase itself. I suspect many homeowners live in a house they own for much more than 20 years. I've owned since 2007, but my mean tenure is less than 12 years since I moved.
• jeremy151 5mo ago
  I am a DIY-er by nature with construction experience, I enjoy it, so when we wanted a bit more outdoor space, we moved from a suburban cul-de-sac to a slightly more rural property on some acreage, and chose an aged luxury home, feeling comfortable generally in my ability to be able to rehab it over time. After all, we're not in any sort of rush, and wanted the kids to experience putting work into the place where they live. I misjudged the scale. Going from .5 acre to 10 I feel like the amount of time I spent on home and property maintenance before could all be allocated to just one bucket titled "nature." Mowing, whether it's lawn, meadows, trails, tree line, all on different schedules. Trees die, they fall, hang up. The volume of brush, invasive species, pulling it, burning it. When we bought it, I made a mental note: "we'll have to replace the driveway." That driveway is asphalt, and 1000 feet long. The quotes for that alone are in price territory of a luxury vehicle. Irrigation, 12 zones, repairing, winterizing. Septic is another ticking clock. When that goes, you're in for 5 digits. Don't have a suitable secondary location? Engineered system, multiply everything by like 3. So remove that time from my schedule, that's what I have left for home improvement work. We're deep into it and really enjoy aspects of it. But if I could talk to my pre-purchase self, I would advise that the scale difference is huge, and consider the amount of time that goes into baseline maintenance when deciding how much of a "fixer upper" to take on, especially when acreage is involved.
  • bluGill 5mo ago
    > Septic is another ticking clock. When that goes, you're in for 5 digits. But for the length they last it is less than my city sewer bill. Though if my septic fails I'll connect to the city system was the quote I got to do that was about what a new septic costs.
    • phkahler 5mo ago
      >> Though if my septic fails I'll connect to the city system was the quote I got to do that was about what a new septic costs. But that's the quote just for the connection. Then you get to pay a sewer bill every month.
      • 5mo ago
• zackangelo 5mo ago
  If you're in SF and weighing this decision, it's easy to get tilted in the buy direction because the rental stock is so horrific. Landlords have very little incentive to update properties or provide basic amenities that people take for granted in other major cities (good luck getting a washer/dryer).
  • zeroonetwothree 5mo ago
    I wonder if there’s any reason SF has that problem yet almost no other cities do.
• RohoSwagger 5mo ago
  where does OP live? these costs are absurd lol
• FireBeyond 5mo ago
  This isn't an overly apples-to-apples comparison. It factors in costs like "updating your kitchen", making things more stylish, etc. The author also seems to assume you'll be paying more to heat and cool your house because if you're renting you're in an apartment? Just down the road from him, four of the five homes I rented before buying in 2021 are larger than the home we bought. "Less than 21% of my monthly payment is going towards paying off the loan" - well, yes, because it is front-loaded with interest. And as you get through the loan, 80%+ will be paying off the loan. Maybe different loans are different, but generally your home insurance and property taxes are rolled into the mortgage (and often paid on your behalf by the servicer) - indeed, it seems like there's a double dipping of breaking down his mortgage payment and the component that is tax and then saying below "I currently pay $515 in taxes monthly". There absolutely are additional costs to owning a home, to be very clear. But there's definitely a contingent (and this post isn't the "worst" of them) that likes to paint home ownership as nothing more than opening your check or pulling out a credit card every month for "the next four digit expense". Especially in Western Washington where the property market 2010-2020 was "a good one". (I put down 10% and at the contractual "year-and-one-day" on my loan for the soonest I could remove PMI I was able to because I'd hit 20% equity on value increase - only making my regular payment), something that he benefits from, too: > I bought my current home in 2011 for $420k, and the Zillow currently estimates its value at $757k. I've put a lot of money into it catching up on maintenance, repairs, and improvements, but the appreciation will definitely exceed whatever I've put into it when I decide to sell it.
• dzonga 5mo ago
  people might scream about corporates owning housing - but one thing that's a blessing is if corporates sink their money into apartment blocks | buildings instead of single family homes. you can rent for multiple years at a favorable rate - then save some money into the stock market. however in america - people have been fed the propaganda you need to live in a single family home.
  • JuniperMesos 5mo ago
    This isn't propaganda, a single family home is actually better housing along a bunch of axes people care about, as plenty of people in this thread are talking about at length. The idea that a person would be less likely to want a single family house if they weren't subject to propaganda is itself propaganda.
• cmiles8 5mo ago
  Over short term windows it’s very possible for renting to make more sense. Over the long term it’s very difficult for renting to come out ahead. If you’re talking about the same town over say 20 years then the chances of renting coming out ahead is near zero. In the US at least the tax system is also heavily setup to favor home ownership. Mortgage interest and real estate taxes (which are baked into rent) are tax deductible for the home owner and not for the renter. That’s another big difference that adds up over time.
  • bluGill 5mo ago
    Only if you really stay. You never know when you will lose your job and the only thing to find requires on site in a different city. Renting and buying tends to work out the same in the long run if renters invest the difference on the early years - but which they rarely do
  • zeroonetwothree 5mo ago
    I bought my house about 10 years ago and it has appreciated around 50% since then. That might sound good but the market is up massively and meanwhile all the price increase on paper means is that I pay more property tax. Since I have no plans to sell there is no actual benefit to me from the price increasing. I calculated it recently and in retrospect I would have been vastly better off renting and buying VOO with my equity stake. It doesn’t help that taxes + maintenance have cost almost the same as rent even if you don’t count the actual purchase price.
    • cmiles8 5mo ago
      “ the price increase on paper means is that I pay more property tax” In almost all jurisdictions that’s not how property tax works. You’d only pay proportionally more if your home went up more in value than your neighbors. Also, property tax goes up on rentals too, it’s just baked into the rent vs something a separate charge. In the US the homeowner gets to deduct all or part of that tax from their income taxes while the renter must pay that with after tax dollars.
  • SirMaster 5mo ago
• seemaze 5mo ago
  It's interesting to put this article in the context of all the local-model vs. frontier-subscription inference discussions occurring recently. How can anyone (financially) justify the cost of owning your own compute? How can anyone (ideologically) justify the cost of not owning your own means of compute?
• hypeatei 5mo ago
  I'm firmly in the renting camp and I'll only own a home if I can buy some land and build it, probably. From a US perspective, I see too many people buy a house because that's what they're "supposed" to do since that's the American Dream. They end up with projects every weekend, stressing about repairs, and dealing with random BS from the local government and Karens. I also despise the culture around owning a home and the insane things that we do to prop it up. Zoning restrictions, absurd mortgage terms (what other country does 30-year fixed rates?), overbearing building codes all so we can live up to this arbitrary life goal of Owning A Home.
  • qwerpy 5mo ago
    I've been through this cycle a few times. Rent (because I'm a college student or in my 20s) Buy (because American Dream and FOMO) Buy a few rental properties (diversify income) Buy a vacation home (seemed like a good idea at the time) Sell everything and rent a house (move to an area better for my kids) <--- I am here Buy one primary home and stay there forever <-- the plan next year Renting a house is a great financial decision for my current market but the landlord is erratic (will he raise the rent? sell the house? move in?), I still have to deal with a HOA, and there are several big upgrades/changes I want to make and I can't: double the solar/battery, add some covered storage, put in wired cameras, put in a high quality RO water filter, devote most of the backyard to an orchard/garden, etc. And the rent will keep going up, whereas insurance/property tax will go up much slower because I plan to buy in cash.
• SoftTalker 5mo ago
  If you have some spare cash flow, you can pay extra principal on your loan. Since early years are mostly interest, this can make a big difference in ultimately paying off the loan early if you plan to live there that long.
• ticulatedspline 5mo ago
  You experience more than 100% of all of these costs as a renter, while you have none of the up-front costs and less liability you also have no agency and no equity. It can be a trap though, as selling isn't free and if you didn't have enough equity built up you can end up losing money to move. Some housing ends up as rentals because of this, makes more sense to not sell and to rent it. Renting is definitely the better option for certain people, if you intend to move often, or want to live in an apartment your overall costs are likely to be lower. If you want a single-family home and don't want to move often (or be moved out) Buying is worth it. Even setting aside the satisfaction of home ownership if you can mange to pay off your property you pretty much can't live cheaper at the same scale. that said I've rented, I've owned, and I've been a landlord and I'd take home ownership in a heartbeat. It's not all rosy, and being responsible for maintenance is no joke but not being subject to the affairs or whimsy of someone else's finances along with the pride and sense of actual ownership is is wonderful.
• readthenotes1 5mo ago
  My house is twice the size of my last apartment and my utility bill is half. apartments just generally don't have as good insulation or as efficient HVAC at least where I live. The person also discounts the impact of horrible neighbors, stomping and barking at all hours of the day. That can happen in houses but they are not right next to you
  • SirMaster 5mo ago
    I mean my heat is included in my rent, it doesn't change no matter how much I use it. I pay 650/mo in rent including heat and water and I have it like 75F in the winter...
• neogodless 5mo ago
  Relevant: https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal... If you're just looking at the numbers, it's worth doing the math. Obviously many things will be estimates. Most people don't do apples to oranges comparisons, because a 2-bedroom, 1.5 bathroom you're living in is not comparable to a 3-bedroom, 2 bathroom, quarter acre house on a lot you're considering buying. So it's obviously not just math, but also preference, or need. Local house prices, tax rates, utility rates, services for maintenance and upgrade... they'll all vary greatly depending on the area. And if you're moving from an urban apartment to a suburban house, you're changing how much you'll drive, maybe even need an additional car. But maybe you turn in your rail pass, and decide to cook at home more, and eat out less. If you think you can decide this based on a formula (or some folk wisdom), well you probably can, for yourself. But of course there's no one universal right answer that applies to most people, because there are too many variables and too many options.
• nayuki 5mo ago
  Great article, love that you enumerated all the costs in buying a home. I don't like how renters romanticize home ownership and fail to understand how many costs are involved. > You've probably heard someone say something to the effect of "renting is just throwing your money away". Don't believe it. It's a glib statement that simply isn't true. No, the statement is completely true: 100% of your rent money goes to someone else, and you also don't get any asset to sell later on. However, this statement doesn't exist in a vacuum. You need some place to live, and you have to compare the cost of renting to the cost of owning. To give an example, the typical rent in Toronto is $1000~2000/month, and the typical home ownership cost (including principal, interest, taxes, and maintenance) is $2000~3000/mo. We can just pretend that both are around $2000/mo. If owning is still $2000/mo but suddenly rent is $500/mo, then renting suddenly becomes a great deal - even though you are still literally "throwing money away". You can use that differential $1500/mo to invest in a savings account, stocks, etc. And speaking of that, I realized that the biggest cost in owning a home isn't the mortgage (and you correctly pointed out that paying down the principal doesn't change your net worth). The biggest cost is the opportunity cost of the down payment, when you could have instead invested in the stock market at 7~10%/year. Continuing with the Toronto example, if you bought a home for $500k with 20% down, then the counterfactual if you had continued renting is that the $100k chunk of money could've generated $7000~10000/year = $580~$830/mo, which is a substantial fraction of the $2000/mo rent. Shoutout to this article again: "You Are Naturally Short Housing" https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
  • 01100011 5mo ago
    > No, the statement is completely true Why don't we say this about other expenditures? Am I throwing my money away when I buy dinner and not a cow? Did I throw my money away by buying a carrot and not farmland? I don't think the statement is true or false, it's just meaningless.
    • nayuki 5mo ago
      You somehow missed the second part of that sentence: "No, the statement is completely true: 100% of your rent money goes to someone else, and you also don't get any asset to sell later on." The oft-repeated statement that "renting is throwing your money" is an implicit contrast to owning a home, where the mortgage payment "builds equity" in your asset that can be sold later. "Throwing money away" means you don't get to own something that can be sold for money later on. That's why we "throw money away" on gasoline, but not "throw money away" in a savings account. The second part of my argument is that throwing money away isn't necessarily a bad thing, because the alternative (such as paying to own something) can end up being more expensive and being a worse deal financially.
• turtlebits 5mo ago
  The Repair section of the article could have been mitigated by a inspection and negotiation before buying. Always negotiate repairs into the offer price.
  • zeroonetwothree 5mo ago
    In some markets they get like 20 offers for a house. You aren’t going to negotiate anything at that point
    • turtlebits 5mo ago
      Then don't worry about the cost of ownership because you're going to make it up in equity.
      • zeroonetwothree 5mo ago
        How does buying for a high price mean you will make it up? If anything it should mean the opposite.
        • shaewest 5mo ago
          Probably alluding to high demand rather than high prices. More demand, more likely you're win on equity
          • leflambeur 5mo ago
            Demand can be fleeting. See Austin, TX in the early pandemic years vs now Too much reliance on the permanent number-go-up hypothesis in home prices
  • Finnucane 5mo ago
    If you live in a house long enough, you will have to deal with things. There will at some point, be a new roof, a new furnace. New windows. Some of it will be optional, some will not. If you are renting, part of your rent is going to the landlord to cover these things. And you are dependent on them doing it. One way or another you are the one paying. If you own, at least you have the choice of doing it the way you like. Probably the biggest factor of considering the rent/buy question is how long to do you expect to be there. We paid off our mortgage after 16 years, so now it's 'free', except for ongoing maintenance and taxes. And we're looking at some nontrivial reno in the future: the kitchen is quite beat, and someday we'll need to deal with the asbestos siding (one of four layers on the house!). But it least it's our choice.
• ApolloFortyNine 5mo ago
  >"renting is just throwing your money away" Unless you think landlords are running a charity, some part of your mortgage is going to them as profit (over a large enough sample of renters anyways), and some percentage of your rent is covering 'bad tenants' (which you're not, right?). Their entire improvement section is also something renters tend to not think about. It's a weird situation when renting that you aren't incentivized in any way to make improvements to where you live. You might not even be allowed to. With home ownership though, things like a modern kitchen, a shed, new laundry machines not only better your life today but also (likely) have some value add. Though you also get the luxury of being able to ignore the value add if you just really want to paint that room neon pink for some reason.
  • Fernicia 5mo ago
    > Unless you think landlords are running a charity, some part of your mortgage is going to them as profit (over a large enough sample of renters anyways), and some percentage of your rent is covering 'bad tenants' (which you're not, right?). You can make the same argument about a bank not being a charity and making a profit from selling you a mortgage (both are true but are not helpful indicators about rent vs buying). Similarly the interest you pay is insuring the bank against bad debtors, which you presumably will not be. > With home ownership though, things like a modern kitchen, a shed, new laundry machines not only better your life today but also (likely) have some value add. You can improve your living situation in a number of ways when renting. If you want a new kitchen or bathroom, rent somewhere new with those things. Renting also affords you the freedom to leave when things go from good to bad (crime, noise, building ammenities, etc.).
    • hx8 5mo ago
      > You can make the same argument about a bank not being a charity and making a profit from selling you a mortgage So when you rent you have to cover the landlord's profit/risk and the bank's profit/risk because the landlord probably has a mortgage.
      • deleted 5mo ago
        [deleted]
• sanp 5mo ago
  Is the author accounting for the equity built up? Cash has to go out whether it’s a mortgage or rent. With a mortgage you are building equity. This changes the true math when you sell (leaving aside your ability to now get a HELOC).
  • the_sleaze_ 5mo ago
    He's saying - and rightly so - that outflow towards rent can be significantly less than outflow towards real property equity given the structure of a traditional mortgage + maintenance burden. And with (a large amount of) financial discipline that delta can result in substantial increase in wealth at the end of the day.
  • adammarples 5mo ago
    Yes the author is accounting for the equity buildup. They only count the interest part of the mortgage repayments as an expense. Any principal repayments are neutral.
• arthurofbabylon 5mo ago
  The article details costs and leaves two big ones out. First, opportunity cost: lot of folks rent instead of own on the basis of keeping assets in higher-performing market sectors. Second (and perhaps actually an expression of the first), anything that prevents a working professional from changing cities can exert downward pressure on future economic opportunity.
  • carlosjobim 5mo ago
    Maybe 1% of renters do that. The rest can't afford a house. Changing cities? Sell or rent out your house. Not harder than moving apartments.
    • benaduggan 5mo ago
      Not harder than moving apartments?!?!
      • carlosjobim 5mo ago
        Even easier than moving apartments if you just sell your house "as is". Depending on your rental contract you might have to do paint it etc before returning it.
• lacewing 5mo ago
  I'm old enough to have owned a number of homes in a number of jurisdictions, so I'd caution that these numbers will differ significantly depending on where you live. For example, insurance is hugely influenced by fire risk, so a rural or semi-rural home can easily cost 4-5x as much to insure (and some insurers will give you "please go away" quotes, so it's important to shop around). Similarly, taxes will depend on the locality, loan costs depend on the lender and the loan amount. Utility costs in SFBA can be easily 4-5x higher than elsewhere in the US, etc. So your totals could be easily 30% or 300% of what's outlined in the article. The one important point that the article makes is that your ongoing costs will also vary dramatically depending on how much work you're willing to do yourself, especially in high-regulation, high-labor-cost areas such as SFBA. A basic job, such as replacing a leaky flush valve, can be hundreds of dollars in plumber costs, or $19.95 if you go to Home Depot. Hiring a painting contractor can cost thousands. Etc, etc. I've also seen several homeowners outright taken advantage of. My main example in the US are various "mold remediation" contractors, who can help you in some really bad situations, but they're just as happy to charge you $20,000 to do nothing of value based on vague fears.
• thesuitonym 5mo ago
  It's true that there are hidden costs to owning but get this: Those costs exist regardless of who owns the house! When you rent, you are still paying those costs, but you don't have an asset when you're done. You actually have to pay more in taxes and insurance on a rental! When you buy, you will pay a certain amount for 15-30 years, and then you only have to pay for the continuing maintenance. When you rent, you will pay a certain amount every month forever regardless of whether the property is paid off or needs any maintenance.
• ljsocal 5mo ago
  [flagged]
• pickleglitch 5mo ago
  The cost of having to live under the boot of a landlord is immeasurable. The freedom of not having a landlord is priceless.
  • SirMaster 5mo ago
    I have been renting 15 years and have never once even really thought about my landlord... I pay them on the portal and if something needs fixing I put in a maintenance request and they get it fixed. That's all i've ever thought about with them.
    • gib444 5mo ago
      You're incredibly blessed
    • pickleglitch 5mo ago
      I rented for somewhere around 20 years before I was finally able to buy a house, and I hated every minute of it. I've had a landlord (in Arizona) tell me that it's normal for an air conditioner to only be able to reduce the temp by 10 degrees. I've had a landlord decide to convert the complex into condos and tell me I would have to let potential buyers into my home before my lease was even up. I can't even remember all the times I've had disputes over various repairs. There was a period of about 5 or 6 years where each year I would get a raise at work, only to have my rent increase by almost the same amount, so I could never get ahead. So yeah, ymmv, but for me I'll never rent again.
      • SirMaster 5mo ago
        Like anything I am sure there are good and bad experiences. I mean both my pay and rent go up by about 3% each year, barring some position change, but 3% of a 100K salary is $3000 more a year. 3% of a 650/mo rent like I pay is $230 more a year. So not even 10% of my raise is eaten by the rent increase.
• throw0101c 5mo ago
  Ben Felix, a Canadian portfolio manager that does personal finance videos and podcast, has been arguing for years that rent versus buy is often a wash financially, and that you should make the decision for non-financial resasons. * recent 2026 video: https://www.youtube.com/watch?v=aU7v87EhDBI https://www.youtube.com/watch?v=aU7v87EhDBI * 2025a: https://www.youtube.com/watch?v=j4H9LL7A-nQ https://www.youtube.com/watch?v=j4H9LL7A-nQ * 2025b: https://www.youtube.com/watch?v=lBG-g1CKfgs https://www.youtube.com/watch?v=lBG-g1CKfgs * 2021: https://www.youtube.com/watch?v=q9Golcxjpi8 https://www.youtube.com/watch?v=q9Golcxjpi8 * 2019: https://www.youtube.com/watch?v=Uwl3-jBNEd4 https://www.youtube.com/watch?v=Uwl3-jBNEd4 The 2019 video goes over a handy "5% rule of thumb": start with the purchase price of home, take 5% of that: if your rent is less than that, better numbers-wise to continue renting (and investing the difference); if your rent is more, probably better numbers-wise to buy/own. The company he works for created a tool to examine the numbers: * https://research-tools.pwlcapital.com/research/rent-vs-buy https://research-tools.pwlcapital.com/research/rent-vs-buy
  • tim-tday 5mo ago
    If you can buy low and sell high it’s worth it. Especially if you’re positioned to buy when you can lock in low mortgage rates. Above 6% you might be better off putting your down payment into the stock market and renting. It’s also more likely that you’ll feel good about spending money to improve the home if you think you can get the money back when you sell. (And then you get to live in a more pleasant place for years)
    • webdood90 5mo ago
      It's okay to do things that don't maximize your return. Everybody is so obsessed with squeezing out the maximum amount of money from everything, it's exhausting.
      • IAmBroom 5mo ago
        Squeezing out the expected amount of money, making it even more exhausting. Guessing what your yearly house-owning costs will be, and what the market will be when you sell, is in the realm of crystal ball scrying. Sure, you might be able to guess "reasonable" estimates, but individual instances aren't necessarily near the mean value.
• jrflo 5mo ago
  A lot of discussion of the cons without discussion of the pros. For example: 1) your home is a hedge against inflation, your $2000 to interest sounds terrible when rent is $2500, but doesn't sound so bad if rent rises to $3500. If you live in your home for long enough, this is all but guaranteed. 2) your home is a leveraged investment. You may only be getting 4% per year in appreciation, but that's 4% gains on the total value of your home, not just your equity. If you have a 500,000 home that appreciates by 4%, that's 20,000 that you get directly, not the bank. Interest rates sure have made it less of a good deal than it was ~5-10 years ago, but it's usually still worth it in the long run.
  • jandrewrogers 5mo ago
    > your home is a leveraged investment Which means the potential losses are leveraged too. Plenty of people have ended up in that position. It isn't all upside.
    • jrflo 5mo ago
      All investments inherently have risk. Looking at historical data the average return is 4% per year on houses in the US. This average includes the '08 housing market crash. If you hold for long enough, your risk is drastically mitigated. Whereas with rent you're basically guaranteed for prices to go up year over year, unless we are in a deflationary market which is quite rare.
      • jandrewrogers 5mo ago
        > If you hold for long enough You are improperly accounting for risk. People don't own a diversified portfolio of houses, they typical own one house. The "if you hold it long enough" is to some extent disqualifying. Many people never see any real return over multiple decades. Where I live rents won't cover the interest payment on a new mortgage. The return on renting is insanely good here in addition to the increased optionality and reduced risk. I've owned many homes, I'm just not emotionally attached to the idea of owning one nor deluded about the rate of return.
• bachmeier 5mo ago
  Famous article by JL Collins: https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terri... Another thing to keep in mind is the lumpy nature of costs, meaning you need to have access to cash to pay for multiple major maintenance projects in one year. My largest single-year expenditure for maintenance was 25k in a LCOL area pre-pandemic. That would probably translate to 50k today. If you have to dump that on a credit card, good luck digging yourself out of that hole. It's common to hear that renting means you might need to move at the end of any 12-month period. Well, that cuts both ways. You have the option to move away at the end of any 12-month period too. Lots of folks had to turn down job offers in the aftermath of the housing crisis because of their homes.
• Avicebron 5mo ago
  Not aure anyone else mentioned it but good luck keeping a big dog in a rental unit.. or any other animals for that matter. Gardens are a pain as well...
  • zeroonetwothree 5mo ago
    You can rent a single family house
    • Avicebron 5mo ago
      it doesn't really fill the same need. Especially because you are at the mercy of the landlord. Owning my own home is the only way to go.
• the_sleaze_ 5mo ago
  Something I've been eyeing is the All In One Loan or FirstPosition HELOC where you take a HELOC on the entirety of the homes value, then use that credit account as your daily spending account. It's a higher interest rate, but then you only get charged on the amount you have actually borrowed which ideally would be get lower and lower. If anyone has any feedback on it I'd love to hear it
  • barchar 5mo ago
    The annual price-appreciation of a home is usually lower than the risk-free rate (and thus the HELOC rate). If you "pay yourself" rent and use that to pay the HELOC down then it can make sense I suppose. It's just leverage and it depends on the returns you're getting on the loan. Renting is also a kind of leverage though so if you own a home outright it might make sense to lever up. If you want that kind of leverage while still having the position in the house then an I/O loan is probably the easiest way to do it.
• jedberg 5mo ago
  The benefit of owning a home is almost always psychological, not financial. If you take the money you'd use for a down payment and mortgage and invest it instead (after paying rent) you end up in about the same place. But the psychological benefits can be huge. You have much greater control over the place you spend most of your time. You can change it to your liking. You don't have to worry about rent increases or owner move ins or any of that other stuff that renters deal with. And if you have kids, they get a sense of home and place. But don't do it for financial reasons.
  • strongpigeon 5mo ago
    > You don't have to worry about rent increases I'd also argue there are financial advantages (on top of the psychological ones) to the price stability as you don't have to hedge against your housing cost shooting up as much.
    • hdgvhicv 5mo ago
      And it’s not just psychological ones, the cost of moving is expensive, so if you landlord decides to get rid of you then you’re on the hook. You’re also vulnerable to local price increases - of the area you live in increases in value because the school Gets better, prices increase, and you have to move and your kids have to move school.
    • ThrustVectoring 5mo ago
      Owning the asset is an advantage in a bull market and a disadvantage in a bear market. If a dominant employer or industry in an area has mass layoffs, that can cascade into the housing market, driving your property underwater at the same time your job vanishes. This happened to a large number of autoworkers in Detroit in 2008.
    • asdff 5mo ago
      Depends where you live. CA has prop 13 but other places you are reassessed regularly and plenty of homeowners are surprised to get priced out of their homes.
    • 5mo ago
• llsf 5mo ago
  There are lots of often overlooked costs to own a home. I have been 15 years in my place, and now I get some advantages e.g. my loan is fixed so the monthly cost is roughly the same as 15 years ago... in a place like San Francisco, it is nice. The property tax goes up slightly every year, but not faster than inflation. There are recurring things to maintain (repaint every ~10 years), the roof has been patched about 10 years ago, might need a new coat eventually.
• busch_j 5mo ago
  Maybe I missed it in the article but it doesn't seem to mention that you deduct mortgage interest on your taxes in the US? This isn't something you get renting and it effectively lowers your monthly payment.
  • profdevloper 5mo ago
    That's technically still true according to the tax laws here, but Trump raised the standard deduction during his first term in office so where I previously took an itemized deduction and claimed my mortgage interest from my taxable income, it's now more beneficial for my (basic) tax situation to claim the standard deduction. I appreciate the simplicity, but I'm no longer getting a tax benefit for home ownership.
    • chipper02 5mo ago
      I pay less under "orange man bad" than I did under "Prof Autopen the funder of perpetual war."
    • deltoidmaximus 5mo ago
      I own a modest house that I bought close to 20 years ago before the standard deduction changes. The first year the calculated tax savings from itemizing was a whopping $800. This went down every year and at year 7-8 it no longer made sense to itemize. Interest rates are higher now but the standard deduction is way higher now as well. This strikes me as something that was a big deal in the very high interest rate 80s and has then been parroted as a huge benefit for decades after is largely ceased being true.
• IAmGraydon 5mo ago
  This is mostly the real cost of borrowing money, not the real cost of owning a home. What's more, it could be argued that these costs are actually directly associated with NOT owning the home.
• carlosjobim 5mo ago
  If you're paying a mortgage you're not owning it. The author is wrong from the onset.
• ThinkBeat 5mo ago
  Your rent payments now, may be quite different in a few months. If you rent an apartment in a desirable location, which is far easier than owning a house in a desirable location, then rent payments are huge. And comparable or worse than owning a house in farther out. Your luck with landlords can wary a lot, and your rent payments may increase substantially with little notice. The landlord may also sell the building with either different management or repurpose it for something else and you will have to find a different apartment. You may also suddenly have unpleasant neighbors. That is true with a house as well, but the distance between you and them is closer in an apartment. As a dog lover, If you wish to have a big dog your may not be allowed to. If you want a yard to kids to play, you cant. If you want chickens you cant. (I know many in Denver who do) If you wish to install extra cooling /AC/heatpump you probably cant. None of that negates your arguments fully, but the case is far from as black and white as you make it.
  • huhkerrf 5mo ago
    > You may also suddenly have unpleasant neighbors. That is true with a house as well, but the distance between you and them is closer in an apartment. Not all, but a lot of the debate between renting and owning include something like this, but you can rent a home, and you can buy an apartment.
    • anthonypasq 5mo ago
      very weird how so many people are using apartments vs single family homes as a variable in discussing renting vs buying
      • amw-zero 5mo ago
        It's not weird, since 99% of rentals are apartments, right?
        • deleted 5mo ago
          [deleted]
        • deleted 5mo ago
• rspoerri 5mo ago
  Houses are almost allways bigger then something you rent… well that might be because you would not afford the rent of the large property, and the whole comparison falls apart.
• bob1029 5mo ago
  > You can save a lot of money in maintenance and repairs by doing your own work whenever possible. I replaced the drain pump in my dishwasher, replaced a leaking kitchen faucet, replaced the control board on my HVAC system, do all my own yard work, etc. This is where the margins of home ownership open up. Doing your own yard work also has added benefit of giving you routine awareness of potential issues around your property before things become much more expensive. Irrigation and drainage issues are usually obvious when you are standing right on top of them. I would argue that if you aren't willing to push a mower around your property, you might not want to own that property. Also, DIY yard work also forces you to maintain various tools and skills that are extremely useful for adjacent applications. For example, lawnmowers and standby generators tend to have similar principles of operation. The tool and knowledge I use to gap the spark plugs for my mower works just as well for the generac.
  • locusofself 5mo ago
    It's also really nice to just do some work outside instead of staring at a screen . I really enjoy mowing my huge lawn, doing some light landscaping stuff. My wife and daughter pick weeds for hours and it really centers them.
• oxag3n 5mo ago
  Renting won't match home ownership for few reasons. First one already mentioned in the comments is you can be kicked out at any time within your rental agreement. I was "lucky" enough to get our rental sold two years ago and then again this year. Packing and looking for another rental with 2 months notice is not fun (and boxes smell). Another difference is location and place itself. You'll have much fewer rentals in a very nice neighborhood, and even those that are rented out, are the worst - corner lots (3x gardening cost/effort), facing major roads or other things that make life less comfortable. Rental condition is not under your control. At least in Seattle area owners I rented from didn't keep the house well maintained, which resulted in: * roof leak (no moss treatment performed, grew and lifted shingles). * 25 yo furnace "worked" until one midnight my family had to evacuate and call fire fighters due to CO alarms getting off. Four days without heating after that (owner offered to reimburse for the cheapest hotel nearby). * Appliances are not replaced until they break. I looked at one property few weeks ago that had original once white appliances. I asked if owner is willing to upgrade them, the agent laughed at told us they will fix it if something doesn't work after we move in.
  • SirMaster 5mo ago
    I pay only 650/mo for rent though. My friends with homes around me pay about what I pay in rent in their home property taxes alone... Or especially once you add in some utilities, like my heat is included in my rent and I can have my place at like 75F all winter if I want. Also yes they replaced the dish washer and refrigerator with new ones before they broke or died while I've been there.
    • skeptic_ai 5mo ago
      But you rent a studio and they have a 4 bed house. You compare apples and oranges
      • SirMaster 4mo ago
        So what's the house comparison for me then? If people are going to say owning is always better, then what should I be owning instead of renting my studio?
• stego-tech 5mo ago
  This is an excellent post for folks just getting into the homeownership racket: what is pitched as a necessity for wealth creation and an “easy” transaction with nothing but upsides is - unsurprisingly - a nuanced and complicated financial transaction that has no guarantee of upside. A few things I’d note to add more data points to the pile: * Property tax caps like the OP discusses are likely to go away in the near future. Having been artificially capped for so long with so much uncaptured asset appreciation, communities are having to face either serious cuts in services or to seek permission in raising property taxes. If you’re buying a “forever home”, ask yourself if you could still afford it with 2x or 3x the property tax bill; if not, you might not be ready to weather the disruptions ahead * Rent has skyrocketed alongside home prices, making both untenable (local housing jumped 50% in home prices during COVID, while rent has appreciated about the same over the past ten years; wages have not kept pace with either). Some states have tried forcing higher density housing near mass transit, but those have been blocked or lawyered around; now tenants are pushing to rent caps, terrifying landlords. The point is that pricing in the near future is going to be incredibly volatile as asset prices and rents adjust to meet what workers can afford instead of what financial models spit out, and that’s going to impact your own home prices accordingly * The primary benefit of home ownership going forward isn’t likely to be asset appreciation so much as stability. For those of us who want to put down roots, owning our homes is critical; for folks happy to move around and explore, renting is far preferable. I would strongly caution against the old adage of “buy if you’re living there for 4+ years”, as there’s no guarantee you’ll come out ahead anymore and may be better off renting * Most “affordable” housing stock will require repairs anywhere from 20 to 50% of its purchase price, especially in older regions of the country. Do not waive inspections when buying a home or you’re likely to miss a five or six-figure repair - like an oil tank that’s leaked into the foundation, for instance.
  • xnx 5mo ago
    The ponzi scheme of property-values-always-go-up only holds when population is increasing. In the US, immigration and fertility changes are bringing population growth to a halt. Good news: We may yet enter an era of housing abundance!
    • 5mo ago
• 1123581321 5mo ago
  You come out ahead with home ownership if you buy the right-sized home and stay there. Homes almost always offer more space and utility for less than rent would, assuming the rental even allows you to do what you want to do with your home or at your home. Staying put reduces the time and money you spend on borrowing, closing and moving, but most importantly, it keeps you from lifestyle inflation that is the biggest financial risk to homeowners or renters. These are the dynamics in most of the United States in the broadest age range. They only break down a bit at the extreme low end (rooming with a bunch of people) and in the most expensive and house-constrained cities.
  • anthonypasq 5mo ago
    > Homes almost always offer more space and utility for less than rent would 1. you can rent a single family house so the space and utility are the same 2. if interest rates recently increased very rapidly, the owner can afford to charge rent much lower than the current mortgage would be because they are locked into a lower interest rate.
    • 1123581321 5mo ago
      I don't think so. A rental house is almost always more expensive if it's an apples-to-apples space, or the renter's use of it is significantly restricted even though it looks similar. Sometimes both. There can be temporary mispricings of rent vs mortgages, but they correct, and they go in both directions. There are always small mispricings in housing markets that let individuals do exceptionally well (or be ripped off.)
      • anthonypasq 5mo ago
        >I don't think so. this isnt a valid response. you are just wrong. https://constructioncoverage.com/research/cities-where-its-cheaper-to-buy-vs-rent https://constructioncoverage.com/research/cities-where-its-c...
        • 1123581321 5mo ago
• ironman1478 5mo ago
  The decision to buy vs. rent is completely dependent & goal dependent. If you're in the bay area, buying really only makes sense if you have kids and want them to be in a good public school district. Otherwise, many houses are oversized and have extremely high repair costs. Finding a good rent controlled unit could be better, especially if you find a landlord who will repair things. And anybody who is saying their property value went up, so it was worth it, you really couldn't know that at the time. It wasn't a given (tbf neither is the market going up). Also, it's not like the property actual increased in value due to some quality upgrade, it's due to artificial scarcity. If the political winds change to encourage more housing, that trend could reverse. There are arguments that you can customize a house you own more and that's true, but that's not a financial argument. I don't think a lot of big renovations pencil out anymore the way people expect. Paying X to renovate a kitchen doesn't increase the value of the house significantly over X anymore because the costs are so high and the high inflation erodes your dollar value much more quickly than in the past.
• putzdown 5mo ago
  This is a super-useful article, and there are many cases where the cost of buying, owning, and selling a home is higher than that of renting. But sometimes ownership costs less than renting, and often—generally when you stay long enough—it can cost a lot less. One place in this article that hints why is when he says that in 2011 his mortgage was $2,329.92, whereas now 15 years later it's $2,440.48. That is a tiny crawl upward, nowhere near the rate of inflation. If he'd been paying $2,329.92 monthly in rent in 2011, he'd now be paying about $4,100. Inflation hits renters much harder than homeowners. Appreciation (a form of inflation) tends to help homeowners more than hurt them. Nerdwallet's rent vs buy calculator is quite sophisticated and can help you reason about your own situation. https://www.nerdwallet.com/mortgages/calculators/rent-vs-buy-calculator https://www.nerdwallet.com/mortgages/calculators/rent-vs-buy...
• jonathanlydall 5mo ago
  This is a South African take on owning a home. Author is correct that if you don’t live in the house long, the overheads such as transfer duties and legal fees make it somewhat expensive. But over here we have a pretty high interest rate of around 10% and comparatively high inflation rate, which makes the initial purchase of a house be a bit challenging, but if you start paying more than the minimum as soon as possible you can find yourself in a financially more comfortable position. My bank allows me to have something they call an access facility on my bond account (the account for the debt on my house). With this I can transfer extra money into my bond at any time and I can draw this extra money out at any time too, this extra money counts as extra paid on the principal. This essentially means that any extra money I put in it is worth about 10% p/a in terms of the interest it saves me. They calculate interest per day so even if extra money sits in there for only a few days, depending on the amount the interest saved could be worth a coffee or possibly a meal. Although I settle my credit card every month, everything I route through it and don’t have to pay back interest free for the next 30-45 days is essentially saving me that portion of interest on my bond, so easily over a percent. And that’s before credit card rewards. And while I don’t recommend this except for the most financially disciplined as it is a little precarious feeling, I have a second credit card which I’m able to settle using my first credit card, this adds yet another 30 days of essentially interest saving to me. It’s a great way to save for something big over say a year or two, even if you draw everything you deposited out again two years later, it’s saved you from the interest in the meantime, so you’re still better off. Then there is the effect of inflation. If you’ve been able to put a good amount extra into your bond each month, you will find that after 5 years or so it’s probably less financially burdensome than renting. This is because since you bought the place, property prices have gone up, so has rent and so has your salary, but your principle debt has not increased with it, meaning you’re paying no more than you were 5 years ago for the monthly instalments, but due to inflation it is comparatively less expensive. Anyway, that’s the financials aspect, but on the quality of life aspect, a few years ago we finally bought a house that should be very nice for our family for the next 20-30 years, in terms of size, comforts and security. We also bought a house with an old interior and renovated it, making the bathrooms and kitchens modern and how we wanted them. Was also able to chase conduits into all the walls (brick and mortar houses are the norm here) so that every room has CAT6 going to it.
• d_burfoot 5mo ago
  The buy/rent decision is quite complex for many reasons, but two overlooked factors are: 1) When a bank loans you $1e6 to buy a house, they are effectively deputizing you to act as a money manager: they allow you to make an investment that will hopefully appreciate more quickly than the interest rate. There are many other investments that have this property (e.g. the stock market), but banks won't loan to you to invest in them! 2) A mortgage acts as a forced savings rate: you pay the bank every month, and when you're done after 30 years, you have a large asset. So a large mortgage is (for some people) a good psychological commitment mechanism that imposes financial discipline.
• jmyeet 5mo ago
  I've come to the conclusion that high housing prices are pretty much the root of most of our problems and is probably the biggest factor in increasing wealth inequality. I came across the housing theory of everything recently [1][2]. Disappearing third spaces, out-of-control inflation. homelessness, etc can all be traced back to housing affordability being the primary factor. I tend to abhor buying vs rent calculators. I always have. Why? Because of inelastic demand. You can't opt out of the housing market. Well you can. It's called being homeless. If you rent, you have in effect taken a short position on the housing market. If house prices go down, rents tend to follow and you're better off than those that bought. If house prices go up, you're worse off. That's a short position. So, by buying a house, all you're doing is closing out a short position. You might argue "but you still win or lose depending on the housing market's movement" but that's not actually true. Why? Because if all houses double in value, you still own 1 housing unit's worth of wealth. You're actually no better off. Who is? Corporate landlords and those that own swathes of houses. But your "investment" in tdhe housing market is used to buy your vote. You have a tendency to become a NIMBY. You tend to think of rising house prices as "good" despite the ultimately destructive effect on society. Once again, China has been proven to be correct. Xi Jinping said back in the 2010s "houses are for living, not for speculation" [3]. Remember the trillion-dollar Evergrande default? Have you seen Western coverage of Chinese "ghost cities" or how the Chinese real estate market has been in turmoil like it's a bad thing? All that happened was that Xi quietly popped the real estate bubble and made it more difficult and expensive to own more than one home. Prior to Xi's reforms, property speculation was rampant. It's going to take years for that correction to work itself out but it is ultimately a good for China as a whole. Oh and one nitpick about the "costs" of home ownership from this post. A lot of the things like the repairs are cash outlays but they also tend to improve the value so that's more of an ivnestment than an expense. [1]: https://worksinprogress.co/issue/the-housing-theory-of-everything/ https://worksinprogress.co/issue/the-housing-theory-of-every... [2]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6571818 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6571818 [3]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for_speculation https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...
  • skew-aberration 5mo ago
    You'll likely enjoy the book 'Progress and Poverty' by Henry George. His 'land theory of everything' predicted continued increasing rents, decreasing interest rates, low real wages, continued global population growth, the GFC, analysed the case of superintelligent AI, explained how free trade and immigration without tax reform would lead to backlash from working class, and that communist states would become tyrannical dictatorships - all in 1879.
• eloisant 5mo ago
  > About 80% of your first mortgage payment is interest. Is it common in US?? In France the current rates are about 3,5% fixed rate, meaning in your first payment on a 25 years loan you pay about 55% interests. Which I think is pretty high already! What kind of rate do you have to end up paying 80% of interests in your first payment?
• FuriouslyAdrift 5mo ago
  No one mentioning you can borrow against an asset. Unless you have a massive portfolio of stcok, you usually aren't going to be able to borrow against it (at least on favorable terms).
• craftkiller 5mo ago
  > the total settlement costs were about 3% of the value of the home > That's $12,777.92 to get the loan. This is something I don't quite understand when people talk about homes: they just bought a $425,930 home. If they're getting a 30-year mortgage with a 20% down payment they will pay a total of $902k at current mortgage rates. The closing costs are such a tiny fraction of what you're spending. You wouldn't go into a store and refuse to buy a $40 item when you realize you need to pay $3 in sales tax, why would you be bothered by having to pay 3% of the home's value or 1.4% of what you will end up paying in the end? Same thing with property taxes: my home-owning friends complain about property taxes like they're some huge imposition. OP is paying $515/month in property taxes. My rent has gone up by more than that in the past 3 years that I've been in my current apartment. That being said, I appreciate this post for the breakdown of all the expenses. I'm considering becoming part of the land-owning elite, so this is useful.
  • conorcleary 5mo ago
    Some of these numbers need federal limits/maximums on them, at least in some categories of 'home'.
    • lapetitejort 5mo ago
      In California, property tax can only go up 2% every year based on the original purchase price (prop 13). For my neighbor who bought their house in the 60s, this must be peanuts.
  • intrasight 5mo ago
    > Same thing with property taxes Without high property taxes, more homes would appreciate in real terms.
• tristor 5mo ago
  Buying is cheaper than renting in most of the country, it's only in coastal markets with exceptionally high home prices that this isn't true. There's a basic formula you can use called "price-to-rent" that helps you calculate this for your area. Where I currently live I was able to buy a house for $285k that would cost $2500/mo to rent in the current market, which is an extremely favorable price-to-rent ratio. If the ratio is not over 20, it's better to buy in your market. While it may not be well known to many, there are mid-sized cities all across the middle of the country where you can buy houses as cheaply as $150k in this year of our lord 2026, but rent generally will be no less than $1000/mo. Private equity and software like RealPage have had a nationwide impact of driving up rental costs, but this hasn't necessarily caused housing prices to skyrocket in places in middle America where there aren't a lot of natural reasons to want to move there. So sure, owning a home might cost more than renting on paper in California, but that's not true in a lot of parts of the country. Even then, the financial aspects aren't the only parts that matter. > My 1983 home had been used as a rental for years, so much of the maintenance had been neglected. The author is acknowledging a reality without acknowledging it, also. Rentals are not well cared for. Most landlords do not keep up with repairs, maintenance, and improvements, and you are going to get to deal with the poor quality of living situation as a renter as a consequence. You get to control this when you own your home, and while it is an expense, it's a fair expense you can manage yourself.
• no_input 5mo ago
  Some of us get lucky and it is financially beneficial. I bought my house right before the housing market spiked so the value of my house almost tripled. It has since gone down a bit but it will be a boon if I ever sell. The rent at the apartment I was at was equal to my mortgage payment but now if I wanted to rent that apartment, it is 4x my mortgage. I also have an EXTREMELY low rate (2.5%) because of my credit. I save almost 6 figures of money per year of owning versus renting just because of timing. I guess the moral is: get lucky or optimize your living situation for how you want to live instead of worrying about cost (unless it's huge)
  • intrasight 5mo ago
    Many people can make gains or even huge gains while still having the average real appreciation be negligible.
• I_dream_of_Geni 5mo ago
  Yikes! I know that this is "normal" here in the U.S., but the guy paid over $26K just to sell his home. We sold our home with a "quit-claim deed" and only paid a lawyer $600 to write it up and make it kosher. Buyer was THRILLED not to have to pay all the ridiculous fees a normal sale entails... (and yes, I know that a bank might have a hard time creating a loan for that type of sale, but it worked for us)
• 1970-01-01 5mo ago
  Completely missed the tech-heavy features of owning your own home: Wire your network however you like. Those walls are yours. Invest in as much solar power as you want. The only limit is the sun itself. Want to be a Ham? Be a ham. The antenna goes wherever you want. Charge your EV as long as you want. The EV charger is yours and only yours. Also, do you want a cat? A dog? A massive tree? Just get it. Nobody can say no.
  • bradlys 5mo ago
    You must not live in California. A lot of these are actually regulated by the state.
  • LargoLasskhyfv 5mo ago
    Depends very much on the region/country/jurisdiction/county you're living in. Walls are your's? Not when it falls under some heritage laws/building codes which forbid too much deviation from the original. As much solar as you want? Again, very much depends on not disturbing someone elses view, or the 'general character' of the surrounding landscape. OFC again dependent on jurisdiction. Big bad antenna? See above. Cats 'n dogs, again dependent on country/county. The same for tree. All of this applies to some regions only, where your next neighbour is far away, out of sight, usually. And even then you can have shit like 'water rights', like in Colorado.
  • kylehotchkiss 5mo ago
    For virtually all new construction in USA, HOAs influence a lot of your freedom in these items
    • QuiEgo 5mo ago
      Gonna disagree with you on this one. For the ham antennas, sure. For everything else though? I've never seen an HoA that stops you from having pets (they may have some rule if you have 100 cats or a rooster, but "normal" variets are not an issue). I've also never seen an HoA give two hoots about network wiring inside your house. EV chargers are also yours to install as you please everywhere I've seen. Maybe in a condo or something where you don't own the walls, but they are community property? But for single residence, the HoA is usually just a "mow your grass buddy!" nag machine.
• tedggh 5mo ago
  Financially, in very few cases renting actually makes sense. Assuming of course you make an informed purchase of a home given your particular circumstances. Most homes in the US appreciate in value, unless you live in rural Pennsylvania. I also believe buying early forces you to be more financially responsible and makes purchasing your first family home later in life a lot easier. So I always recommend young people to make the sacrifice and buy a place. Your first home doesn’t need to be your dream home. My first place was 700 sqf in a very shady area of the city, but it came with sweet tax abatements for several years and the area improved a lot but the time I sold. There are always opportunities like that in almost every city in America, even in today’s market.
  • dijit 5mo ago
    If you take away the "always increasing" price of homes. Is that true. Homes for the majority of human history have not been something that "always appreciates", the condition of the domicile might actually be worth less than the components it was constructed with. At some point, nobody who isn't already on the ladder can afford to buy, then you've hit your market saturation. Then it's about how much more can you squeeze them for. If interest rates rise, house prices fall, because most people buy at the edge of their affordability -- and soon there'll be no homes that they can afford at all, or: the house prices must stabilise and not "forever appreciate".. they can't both be true.
• hdndjsbbs 5mo ago
  OP seems to disregard the fact that equity in the house is basically a pile of cash you can live inside of. If you're renting you're paying some premium for the landlord to pay their mortgage interest and pay down their own principal. The cash flow is lumpier for ownership (fewer, bigger expenses) and your risk concentration is greater (you're committed to a single asset). But ultimately that stuff is all priced into rent, plus a premium for your landlord to have "passive income". If you're able to own a rental property in today's economy it feels like you'd have to be stupid to not be able to make above-market returns The long-term promise of buying a house isn't necessarily "number go up" but "after 25 years you own it outright".
  • barchar 5mo ago
    It seems like public (REIT) landlords haven't really been making an above market return. Admittedly they have constraints that private landlords don't, but they also own a metric shitload of rentals.
• deleted 5mo ago
  [deleted]
• dividefuel 5mo ago
  Beyond financial costs, I was caught off guard at how much time home ownership took up. House maintenance and projects have taken up most of every single weekend of mine for the past few years. Part of it is simply that I bought a house with more space than the places I usually rented. More to clean, more to maintain, more things that can go wrong, etc. But the biggest thing is that I'm the only one in charge of maintenance. There's no one person I can call for every single problem. Keeping track of regular maintenance, performing that maintenance, and learning how to DIY things takes a lot of time. And even if I want to pay someone to do it for me, I still have to research contractors, coordinate estimates, and schedule the project. And I still need to learn enough about the project to determine whether they're doing it right! Home ownership is definitely a lifestyle choice first and foremost more than a financial one.
  • darknavi 5mo ago
    > House maintenance and projects have taken up most of every single weekend of mine for the past few years. Mine come and go but it's no where near every weekend since I've purchased in 2019. What sort of things occupy this much time?
    • colordrops 5mo ago
      Not gp, but I bought a fixer-upper and it was at least weekends for the first two years, then slowed down quite a bit after that. Now it comes in fits and starts similar to you.
      • pc86 5mo ago
        This is the answer - there are plenty of move-in ready, turn-key homes that require basically zero maintenance unless you want to remodel or change something, but those cost more (sometimes a lot more) than the ones that need more TLC or true fixer-uppers.
        • hibikir 5mo ago
          Eventually the maintenance comes back again: The turn-key homes have typically had most of the things that needed maintenance replaced, but they eventually come back, and they can be quite the headache. See the wonders of having a plumbing stack going past its useful life, land resettling leading to having to do regrades, or lift concrete slabs, or just general tree maintenace.
• kennywinker 5mo ago
  For renting to be a better deal than owning, one of two things has to be true: 1. Your landlord is losing money Or 2. The rental market is dominated by landlords who own outright, or bought long enough ago that their cost is much lower than the cost of owning is now. I’ve never seen #1 happen, and the only place i’ve lived where #2 was the case the market has now adjusted and it’s very much not true anymore.
  • appreciatorBus 5mo ago
    Just like in the production of other durable goods, the lower bound on price (rent per sqft of floorspace per month) has a relationship with opex, capex, & financing costs, but it's only binding when we are talking about a very small scale - and individual with a mortgaged property trying to get into rental. Buildings last 60-100 years. It does not take that much over building in a previous era to decimate the bargaining position of landlords of a future era. We have been using the law to prevent this horrible no good outcome /s for the last 100 years or so. We can stop anytime.
• tobadzistsini 5mo ago
  And yet the property will appreciate in value, barring the implementation of a land value tax, and negate those extra charges the article's author is enumerating. One can borrow against one's property and reinvest in the property and you'll still make money. No bank or credit union will ever turn down land as collateral for a loan because in this economic paradigm land remains the safest and best investment. Nothing there is really relevant and skeptical r
• ashley95 5mo ago
  A big reason why people believe one should own their own home (or that it is prudent to do so) is due to the historical fact that land has gone up in value in many countries with strong population growth (such as the United States). As the population of the US starts decreasing (due to lower immigration, and historically low birth rates) and the urbanization trend completes, it's unclear why the value of land should go up, and therefore why real estate should increase in value. The rest of the debate is very dependent on things like tax treatment (e.g. SALT and property taxes), personal preference (stability of fixed rent vs right to stay forever/customize), and transaction costs.
• havblue 5mo ago
  For my twenties, the biggest cost would have been opportunity. I was able to switch jobs multiple times in different states before meeting my fiancee. Renting allowed me to be far more adventurous than I would have been.
  • QuiEgo 5mo ago
    This. So this. When you're 20 something and you can pack your 1 bedroom apartment worth of Ikea furniture into the smallest U-Haul, or just sell it on Craig's list and start over at the next place, renting is awesome. When you have a house full of crap you've collected over 20 years and live somewhere you carefully picked for your kids to have a good school, the whole equation flips and you're willing to accept the downsides the author calls out, to give your family stability.
• pryelluw 5mo ago
  I grew up in Puerto Rico where houses are made of concrete or concrete blocks. Maintenance was lower because there were not much issues with termites, water damage, shingles, etc. My house made it through a category 5 hurricane with minor damage to the windows and some flooding. Now I live in a house made of wood in Georgia. I’m exhausted from all the maintenance and the extreme nickel and dime-ing from everyone. I bought new five years ago and the house now needs to be fully painted, a new A/C evaporator, and some other minor stuff. So, about $20K worth of “maintenance”. This plus the stress of having to live with the hopes that a hail storm does not hit and ruins my shingle roof. I’m hoping to sell it and rent until I move back to the island and live in a proper solid home. I would build a house here with concrete but code does not allow it.
• znpy 5mo ago
  > "renting is just throwing your money away". yep, it is. i bought my home and went from paying 650 euros/month for a single room and sharing the rest of the flat with a roommate (in his own room) to paying 430 euros/month for my whole flat (in the same city, btw). fast forward a few years and: - the same room now goes for around 700-900 euros/month (post covid inflation) - my mortgage price would have stayed the same (fixed interest rate)... - ... except i paid it in full before time (and saved a ton on interest) - my flat is now worth a lot more than i paid id (again: post-covid inflation) nowadays i'll be kinda braggy, i'm leaving the dream: i work in tech, i have a very good salary and all of my fat paycheck stays in my pockets. having a mortgage with a fixed interest rate meant i could plan around the payments i had to make. and don't get me wrong: i'm 34, i'm not a boomer. they say that renting gives you optionality. well... i can still easily sell my flat and move elsewhere OR, hear me out... i can rent it.
  • chipper02 5mo ago
    My home on 3/4 acre is worth 2.5x what I paid for it after just 7 years ago. The best time to plant a tree... same for a house... Do it now or live with the regret of generations of "wait and hope" idiots. I waited and I see the folly of my ways. If I had done it 20 years earlier and dealt with the hardship of being "house poor" for a few years I would have been able to retire at an early age. Do not let fear control your decisions/actions! Carpe diem!!!!
• joshstrange 5mo ago
  > I bought my home in Auburn, WA for $321k, and sold it a few years later for $333k. After all the costs to buy and sell it, I probably lost more money on it than I would have spent renting an apartment. Any half-competent realtor will tell you that if you aren't going to stay in a house for 3+ years you will probably lose money on closing costs/fees. Contrast this with my house, I stayed in it for ~6 years and the house went up ~$100K in value. During that time I put ~$50k into it (AC, Insulation, Pest, replaced some pipes). But most importantly, it was mine. I did have to manage my own maintenance but I've lived through almost a decade of renting at differently places and the "included" maintenance is dog shit. At one point I had water in my kitchen floor such that as you'd walk water would come up through the seems in the vinyl for well over a month... on the 16th floor. I also had long streches where the elevators weren't working and every year they increased rent $50-$100/mo. Right as I was moving out they wanted to add a $25/mo pet fee and the removed our cable modems and made everyone use wifi-only (limit 10 devices). Yes, some of those could be avoid renting a house not an apartment but I've lived that life as well and it ain't all roses either. TANSTAAFL. Maybe renting and owning come out about even for most people in most situations, but a lot of the "perks" of renting really sucked IMHO and I greatly preferred being in control of my own destiny, never having to ask permission, not feeling like a second-class citizen, not having the owners stop by or want to show off my unit to a prospective customer. I have zero desire to go back to renting until it's time for nursing home/assisted living-type place for me.
  • pc86 5mo ago
    We've been in our home for about 5 years now, but we bought down the interest rate as far as we could so our break-even point is still a year or so out, not counting appreciation. Our realtor told us over and over again than if there was any doubt we'd be in the house for 5 years we would very likely lose money selling it. There will always be people who break even after 15 years, just like there will be people who hit the lottery and sell for 5x while the ink on their mortgage application is still wet. But 5-ish years on a standard 20% down no points 30 year mortgage seems like a good rule of thumb outside of VHCOL areas.
  • iamalizard 5mo ago
    > the "included" maintenance is dog shit In my experience it usually is. > Right as I was moving out they wanted to add a $25/mo pet fee If my landlord did that, I'd be quite surprised as he obviously knew I have 2 small dogs when I moved in and they haven't done any damage. Is your landlord managing lots of properties, not just your own? It's the type of added fee I'd expect from a faceless company, not a person I've had a relationship with for a while. > they removed our cable modems and made everyone use wifi-only (limit 10 devices) That would've driven me mad.
• mawadev 5mo ago
  I really like this analysis. Considering this is written for america, a lot of these points somewhat apply to germany. Over here homeownership is pretty difficult. I put that decision away until I'm 35 or 40 and absolutely have to stay in one place because of kids and so on. I feel like I have more psychological safety when I rent and can move away whenever I want to, have a pile of cash and investments that pay the rent for a decade. I can't wrap my head around pulling most of your savings into a loan and then paying more or equal monthly than what you would pay for rent... I feel like renting your first 1-3 flats in different cities is a valuable learning experience. You will learn where you want to live, what is important in a flat, its layout and its utilities and materials. It will save you a ton of money longterm if you know how thick the walls, well isolated the windows, locality of things and many other facets have to be...
  • ricardobeat 5mo ago
    Is Germany more like the US? In the Netherlands, before 2020, the cost of getting the loan was negligible. For a while earlier, it was zero - all transaction and notary costs could be included in the mortage. You could literally buy a house with €0 in your bank account, as long as you had the necessary income. These days it's not so easy, prices have risen by 50%+, but you still pay less on a mortage than the equivalent rent, by a large margin. Renting (if you can buy) is pretty much throwing your money away.
• rambambram 5mo ago
  For me, the biggest 'cost' seems to be peace of mind. I rent my place, and even thinking about all this home owner sh!te gives me a headache. To each their own, and I'm probably pissing money away, but I want to live with the feeling that I can quit this 'housing subscription' (that's what it is, just another subscription) within a month and not even have to think about it.
  • fuomag9 5mo ago
    Meanwhile italian subscriptions have on average 6 months notice in advance for quitting it...
  • onecommentman 5mo ago
    And be homeless, if you are truly not thinking (and assuredly acting) about it. It’s not “just another subscription” in many ways. The idea of renting being the “peace of mind” choice rings false with me.
• lbrito 5mo ago
  These own-vs-buy comparisons always compare an idealized rental situation vs a concrete ownership situation. Its never realistic (although this article does acknowledge it: "My 1983 home had been used as a rental for years, so much of the maintenance had been neglected". Specifically: people think about maintenance costs as a "con" in owenership, but its not like in the alternative (renting) you'll get all of those things for free. The owner just won't do any maintenance beside the bare minimum required by law.
  • iamalizard 5mo ago
    And when you invest in something because the landlord won't do it, then move to another rental for some reason, you may have to do it all over again. Especially for upgrades. When you own the logic is "I'll pay X for this and it will hold for ~Y years". When you rent it's "I'll pay X for this and if I leave before ~Y, I'll have overpaid on a per-year basis".
• smallerfish 5mo ago
  It depends on a lot on your timing with the market. This guy (from TFA) sold in 2007; I bought my first house as a (fairly dire) fixer-upper in 2008. I sold it in 2016, after it had more than doubled in value (partly due to improvements we'd made, partly due to market improvements). I bought the next house as a (cosmetic) fixer-upper in 2016, and sold it in 2020, after the pandemic had multiplied its value by 1.5x. Now I own outright, pay no mortgage, and my property tax is less than 1% where I live. Yes I got lucky on timing on both ends of the 12 years, but not selling into a down market (if you can help it, of course), buying with an eye to potential increase in value, and being willing to take advantage of market conditions are all things that can work in your favor.
• jameslk 5mo ago
  For me personally, I used an LLM to build out a financial model with different macro and financial input variables (e.g. mortgage rates, if I rented rooms, HOA, home appreciation rate, etc). These factors changed my projected return differently on a 10, 30, 50 year time horizon for renting vs owning I recommend everyone who's making this decision to do something similar as an additional perspective. So many variables will be dependent on location, personal finances, and goals
• mfrye0 5mo ago
  Another point not really mentioned in here is the type of home. Buying a condo has absolutely been the worst decision of my life. It was our first home after getting married. The condo HOA will probably go down as the most disfunctional HOA in California history - not exaggerating. It has/will cost an obscene amount of time/money that I will never get back.
• harel 5mo ago
  I enjoy the maintenance, doing what I can myself, trying to learn if I don't know. When the house was renovated (read rebuilt internally completely), we chose to stay in it during the works. It was fascinating. And, houses (usually) increase in value. Some more than others.
• deleted 5mo ago
  [deleted]
• gweinberg 5mo ago
  It stands to reason that owning must be cheaper than renting an equivalent place over the long term, unless the guy renting to you made a poor investment. But you're usually not comparing equivalent places when you make the comparison.
• steveBK123 5mo ago
  Last summer I was reminded of the dichotomy of owning vs renting during the crazy heat wave in NY. Both my coworker and I had AC issues. For him, he called his landlord and that was it in terms of hassle. He then went after his landlord for a rent reduction due to the AC being an issue for a week. I instead had to buy a portable unit as a stopgap while I dealt with finding contractors to give me quotes on a new central air system which cost 5 figures and probably 20 hours of time.
  • carabiner 5mo ago
    I had a towel bar fall out of the wall. I realized that that small repair would take a trip to home depot, buying plaster, paint, a paint brush, and probably some other crap. There are of course a million types of paint and brushes to get there. I'd have to research what makes sense. Something cheap but decent, I guess. I have no garage so what I do with the rest of the paint? Drive to the hazardous waste disposal in my city, which has limited hours. So maybe 3-4 hours of my time including watching youtube videos if I don't screw things up, and $50 of stuff. I then sent a maintenance request to my landlord and they came the next day and fixed it in 15 minutes.
  • whiplash451 5mo ago
    You are also reminded of the same dichotomy when you (the renter) get a letter from your landlord asking you to leave the premises you’ve liked a lot for the past few years.
  • tomjakubowski 5mo ago
    > Both my coworker and I had AC issues. For him, he called his landlord and that was it in terms of hassle. He then went after his landlord for a rent reduction due to the AC being an issue for a week. This is the best case outcome. All too often, especially with mom and pop small landlords, the repairs are delayed or done incompetently, or there is no local ordinance offering recompense to the renter, or both.
• usernametaken29 5mo ago
  One thing the author does not think about is end of life depreciation. When you retire and drain your investment funds they very quickly will disappear and stop producing value, especially at any sustained rate. A house has none of these issues. Costs are relatively constant. Rent on the other hand. Well. Anyone who rents knows the cost goes up and will keep going up, if not simply for increased utilities. Another way of course is to die quickly once you retire but then what’s the point of savings anyway?
  • cindyllm 5mo ago
    [dead]
• MagicMoonlight 5mo ago
  Rent goes up every year, your mortgage goes down. 30 years of renting and you’ll have nothing except more renting. With buying, you’ll own a house. That house is now effectively free to live in, as a rentoid still has to pay rent and make repairs to avoid losing their deposit. What a meaningless slop article.
  • littlexsparkee 5mo ago
    Somehow it's taken as given that rent goes up - SF took 6 years to recover its 2020 rent, other cities saw a dip during COVID too. Similar thing took place during the dotcom crash.
• bittercynic 5mo ago
  People seem to have very strong feelings about the subject (myself included), and some seem to think there's only one correct conclusion. Renting an apartment and owning a home have so many differences that it doesn't make much sense to compare the two. Many people seem to assume they'll be moving every few years, but if you want to stay in the same place for life the equation looks very different. I hope to be done paying the mortgage around the same time I'm too old to work for a living, and if that lines up it's a pretty big win on the own instead of renting side.
• panny 5mo ago
  That's the cost of renting money (mortgage), not owning a home. I saved up cash and bought my home in cash. I did not have closing costs. Only the seller did. My closing cost was the price of the home. I don't plan to sell. I'm not "investing" in the house. I'm living in it. Essentially, my home eliminates the biggest portion of my monthly expenses. I hope my home value goes down, a lot. Then I pay less on the one expense I do have associated with it: property taxes.
• barchar 5mo ago
  This article does not mention the opportunity cost of all the home equity you accumulate, which is frequently a big component of the overall cost of ownership.
• jancsika 5mo ago
  > You've probably heard someone say something to the effect of "renting is just throwing your money away". Then skip to the bottom: > I bought my current home in 2011 for $420k, and the Zillow currently estimates its value at $757k. I've put a lot of money into it catching up on maintenance, repairs, and improvements, but the appreciation will definitely exceed whatever I've put into it when I decide to sell it. There you go. The only counterexample is one that's a truism: author bought at $321k and sold at $333 a few years later. Real estate is a long term investment, same as the funds you'd choose for a retirement account. In both cases if you're buying/selling short term you missed a very important implied premise in the conversation.
• Aeolun 5mo ago
  I don’t share this experience at all. I bought a fully finished new house in Japan, and I haven’t had to do or pay anything extra (other than mortgage and yearly tax) for the past 6 years. Maybe it is different if you buy an old house?
  • aidenn0 5mo ago
    My understanding that Japan is exceptional in this case; I've been told that houses in Japan depreciate about as fast as a quality roof, so e.g. a roof-replacement is not ever needed -- it's just time to build a new house.
• woopwoop 5mo ago
  I got my mortgage at 2.5% interest. The mortgage was about equal to all of the cash I had before buying, and I'm pretty sure I could (and should) have gotten a much larger mortgage before buying. Mortgages are essentially the only way for ordinary people to access that kind of credit. That's why buying a house is such a good deal. No one's lending an ordinary 30-year-old hundreds of thousands of dollars at 2.5% interest to plow into the S&P 500. Of course, this kind of credit is _incredibly_ risky. People don't think of it this way, but a mortgage is essentially a massively leveraged bet on your local housing market. Which is already gives your risk profile an incredible lack of diversity. The most valuable thing you "own" in the time of your life when you buy a house is usually your future earnings potential, and your house will be the second most valuable thing you own. The thing is, both of these things are highly correlated with your local economy, so buying a house doubles down on your already high exposure to local economic conditions. People think of owning a home as a kind of boring, safe, low risk/low reward investment, but it's really exactly the opposite.
• mahirsaid 5mo ago
  interesting enough to read this. One thing that is not talked about is why would homes just keep going up, i understand the math behind it and what appreciation does to a home value. where is the cap that a visually home is 150k but market value over the three previous years has gone up 4% for example. This makes sense for high value areas, and upcoming areas. My confusion lies in the market value and negative equity. separate the mortgage "rate" and "market value, est home value" We can expect some gain is a guarantee, this could be 20% or 4% in 5-7 years of residing. The chilling wonder of rates exceeding 4%-6% is temporary as we saw previously in the 80's and 90's. Someone can argue that indeed this is a natural cycle of mortgage financing, however my conclusion is to draw attention of the the span of time that mortgage rate have stayed high and the implications of inevitably adjusting to lower rates by the feds. The president has persisted to lower the rates regardless of the Chair's decisions. Lower rates cannot be done alone. The market also needs adjusting at the same time. Sure by adjusting the rates will have an immediate effects on the market as well, but not large enough. Those that have updated and added additional features to their home did so with materials and services bought during high pricing. It is true that a deck built a year ago is going to be 20% less for example. later when selling a home how will this reflect on the bigger picture for the total price. Let alone the market when the cooling takes affect you will owe more than what the home is worth lets say. So my confusion is brought by a conversation with a coworker. Stated that he wanted to buy a home at 21 years old i said that unless you have a family and know that you will be stable in that location for arpox 5-7 years that sure, however when the market cools and your locked in mortgage rate is XX% how will you sell you home and come out even or even +. Response: equity me: you mean negative equity! response: homes are only going up. me: to what a million dollar for a two bedroom, one bath dwelling located in a busy street and minimal parking and adjacent to neighboring property. He seemed convinced, he seemed to convince me that i was wrong.
• mlmonkey 5mo ago
  > I currently pay $515.50 per month for property taxes. I currently pay almost $2500/mo in property taxes here in SF (about $100/mo in parcel taxes). FML.
  • deleted 5mo ago
    [deleted]
  • deleted 5mo ago
    [deleted]
• Felger 5mo ago
  Not surprised ownership is not cheap in the US. West EU here, bought a new, architecturally wrong (yikes) house in 2012. I knew its conception would spell trouble, and sadly I was not disappointed on this part almost right off the bat. But the location and the price (right on the aftermath of the 2008 financial crisis and economical fallout / market bottom) were good. After 14 years it cost an average of $130 per month on maintenance, mainly to correct on multiple occasion the conception issues aformentioned after the 10y warranty. Utilities are about $170 per month. And taxes are now about $1700 per year (rise 3-4% every year) This $250k purchase must have cost less than $2k in fees, the credit was... well no credit. Spent almost 100% of my savings except some cash for my business. On the overall this house cost me less than $500 per month so far. Not really surprising for a new house, certainly. And its market value rose by 60% in 14 years. Yep, ownership is (was ?) very profitable in the west EU, mind the location.
  • asdff 5mo ago
    There are places in the US that are cheap still. Midwest you can still get 150-250k homes today, decent ones at that too. Large american style, 4 beds with 2 car garage sort of thing.
  • deleted 5mo ago
    [deleted]
• jonplackett 5mo ago
  This doesn’t factor in the growth in the value of your house, which mostly happens tax free (in the uk at least) We bought our house 10 years ago and it’s basically doubled in value since then. Which is way more than the money I’ve spent on interest. It seems like this is also based on buying somewhere with a super low deposit, which I agree is probably a bad idea.
• Sparkyknows 5mo ago
  For me, it is about stress and time (and money). I hate to say this because I don't want to upset anyone (really just trying to help, not perfect), but we created HomeSpark.AI to try to reduce the stress/time/money blackhole from personal experience. What my contractor was doing didn't feel right, so I had to hire a "auditor" of sorts who wrote a 47 page report of the issues. Didn't relief the stress but did relieve the uncertainty. Then I said that has to be an easier way with AI. I just ran into this issue with an oil pressure gauge for my whole house generator. The AI gave me the part, video and where to buy/cost for part. $30 and 20 minutes later installed - before that I had no idea other than call a guy. Sorry not trying to shill anything , just hope to be helpful.
• blks 5mo ago
  HOA fees can get so extremely high I don’t understand what people are paying for - 300, 400, I saw 800$ on some property.
• insane_dreamer 5mo ago
  All those costs are baked into your rent by your landlord (who had/has to pay them). The difference is that after 30 years you can own the house and have a low-cost place to live in your old age (not free, you still have prop taxes, repairs, etc.), whereas with rent you have nothing. That is significant. But really, the biggest benefit of paying a mortgage is related to the value of money. Over 30 years your rent will increase substantially in then-current dollars, while your mortgage remains fixed. Which means that it essentially gets cheaper over time. Consider that the US national average rent in the US was ~$550-$600 30 years ago, and is ~$1700-$1800 today.
  • zefhous 5mo ago
    Exactly — it doesn’t matter how many “hidden” costs he finds to adds to the cost of owning for the article — the renter pays them all, plus the owner’s profit.
• bushido 5mo ago
  I was half expecting/hoping this would talk about the opportunity cost of owning a home. More precisely, owning a primary residence. There are quite a few studies about this, but it is something which is not discussed broadly enough. But there is a inverse relationship between home ownership and income. Because for most regions across the globe, once someone buys a home, they start looking for work that's in geographic proximity to their primary residence. And in most parts of the world, incomes generally tend to stagnate since higher paying jobs are almost always away from where people live. Now a lot of people believe that they will pick the higher income, but the amount of logistics which goes into thinking about selling your home or renting it even often dissuades people from trying to look for a job which pays significantly more. Interestingly, some multinational companies that I know of facilitate the entire transaction for their executives and senior managers when they need to move cities or countries because of this effect. Owning a home for the purpose of investment and not living is a different matter, and the same effect isn't seen there.
• tonymet 5mo ago
  The housing industry is the one industry that makes healthcare look efficient. Next time you buy a house visit your titling company. White Collar daycare. Great coffee though. And free pens, nice ones.
• transitorykris 5mo ago
  PSA: it’s probably time to change your furnace’s filter
• bichiliad 5mo ago
  > My 1983 home had been used as a rental for years, so much of the maintenance had been neglected. This quote is ironically a weighty argument for why living in a rental sucks, even if it nets out the same or better on paper.
• iamalizard 5mo ago
  I'm not from the US but I find some of these numbers ridiculous. $515.50 per month for property taxes? That seems soo high. What does this cover - garbage collection, what else? > Cut down trees that were too close to the house: $2,800 I could've likely flown to the US, cut down your trees for a few hundred and flown back home for that much money. Why so expensive? I'm beginning to question the other numbers. > Replaced leaking faucet: $185 Can't you do it for like 5-10 $ yourself? If you don't have any tools, maybe spend 20 $ for tools? The author even says he replaced his own faucet - I don't get it at all. Or are we talking about a fancy top of the line faucet? I realize repairmen cost a lot but that seems like a LOT. And I get that in the US you have to have lots of insurance and inspections and whatnot, but... it still seems high.
  • mtoner23 5mo ago
    Cost of labor quite higher here. Especially house work. Any licensed person to work in your house you're looking at paying $200 minimum just to walk in the door. At least in the major metro areas.
    • iamalizard 5mo ago
      Why would you care if they're licensed if they're doing yard work or replacing faucets or cutting down trees? I understand wanting some assurance for whoever will wire your whole house or will make major plumbing repairs but not for small jobs. Yes, trees can fall, but it's easy to make sure the person cutting them knows what they're doing - I've cut trees myself. For small repairs (light switches, blown fuses, faucets, installing water heaters, cutting down trees, cleaning gutters), before I started doing them myself, I called friends who knew what they were doing, usually 50-something year old men who were jack of all trades.
      • mtoner23 5mo ago
        yeah of course. theres no license for most of these things. just clarifying
  • deleted 5mo ago
    [deleted]
• 999900000999 5mo ago
  I had a rental which was great up until the last 2 months where the landlord sent a prospective tenant to view it twice a week. No regard for my personal privacy. At a point a real estate agent just walked into my home without any notice. Even after this the showings continued. I’ve had truly awful landlords and some very good ones. Although unless you own a house in the woods it seems like someone needs to mess with you. You’re hoa fines you for not mowing enough , etc.
  • skirmish 5mo ago
    > a real estate agent just walked into my home without any notice Just open the door stark naked, you are in your private home.
• fsckboy 5mo ago
  >You've probably heard someone say something to the effect of "renting is just throwing your money away". Don't believe it. It's a glib statement that simply isn't true. There are so many hidden costs to home ownership that most people who have never owned a home don't know about. I appreciate your saying all you said. I just want to add on, the ownership picture is even uglier. (what I'm about to say will break your brain, frequently to the point of downvoting; don't blame the messenger for the bad news you don't want to hear.) When you buy a house or a condo apartment, you now have the right to rent it out to other people. That rent would be income to you, and you are entitled to it. if instead you choose to live in this piece of property you just bought, it is an identical financial situation to you being the payer of the rent. Owning the property did not eliminate rent (the monthly rental value of your property) from your budget. Now, you are paying the rent to yourself, so isn't that break-even? well, it needs to be compared to the opportunity cost of the capital you had to put down and the interest you need to pay on the mortgage. due to many govt subsidies for homeowners, it can work out in your favor, but at the same time the stock market does offer higher returns. But more importantly, why are non-homeowners on a very large scale being expected to subsidize wealthier homeowners in the form of an unfair tax burden?
  • barchar 5mo ago
    If you have public REITs active nearby you can do this comparison for real: if you buy ~1 unit's value in shares of that landlord you will probably own about 1/<however many units they operate> of the company and receive someplace around the rent of that unit in dividends and capital gains. The government subsidies for investing in the stock market are also pretty nuts, and the TCJA hosed owner-occupants by limiting the interest deduction, the gains exclusion, and raising the standard deduction. If you invest you get to deduct any interest against investment gains (even better: you can just not pay any interest), you pay ZERO capital gains taxes on up to ~$80,000 of (real!) contributions each year (with no maximum excluded gains), you can defer $22,000 of (real!) income to literally whenever, AND you can take the standard deduction every year (including in retirement when you wouldn't have had any income to deduct had you paid off a house).
• thelastgallon 5mo ago
  Owning a home is as much responsibility as having infant which never grows up, can never be potty trained. There are thousands of things that need to continuously monitored and maintained. Time, money, mindspace and the stress are the huge operational costs of owning a home. Property taxes, insurance and repairs/maintenance, these three are increasing YoY will cost 3X the initial cost over a 30 year mortgage. There is no incentive for homebuilders to build better homes, once they sell, they don't deal with the ongoing costs in multiple dimensions.
  • tim333 5mo ago
    I'm not sure that's true. I own a flat in London and a couple in Spain. With the Spanish ones I have to do something every few years. I gather infants require more maintenance than that.
  • jvvw 5mo ago
    Having owned a house for two decades (well two houses because we moved) and having two children, I would say that owning a home feels like a doddle in comparison :-) I haven't done the sums to compare expenses, but when they are young childcare/lost earnings is definitely more than insurance/repair/maintenance costs (and tax, although in my country you pay tax as a tenant too).
• jameson 5mo ago
  Some other costs that may incur: - Pool - HOA - HOA (if the community belong to larger community association that maintains things like park) Summerlin area in Las Vegas for example have summerlin association you pay HOA to in addition to your residential HOA.
• justinram11 5mo ago
  I actually enjoy it much more than I thought I would. I love tinkering and solving problems on the computer, and it's fun to have a space to do it with my hands in the real world. Learning the basics of carpentry to erect a fence, basics of plumbing and the various international fitting types to install a (from japan) bidet toilet, cat6 throughout the house and trench out to the garage, basics of hvac for a whole-house humidifier and smart thermostat (MN winters) -- have all felt like very fun projects. Next project is probably trying to replace the plumbing up to our second floor bathroom with pex (water pressure upstairs is very poor). Also helps that I have a very handy dad that I can fall back on to ask questions or help.
• laughing_man 5mo ago
  IMO most childless people would be better off renting (kids change the whole set of incentives). Exceptions would be people with hobbies that require a lot of space or a yard, and light sleepers. A house means a better standard of living, but you definitely pay for it. I spent $25k replacing a fence at my house this year, and I'll need to spend another $20k to replace the air within the next few. The roof, another $30k, is coming up too. Where I live you can rent for quite awhile with $75k. While it's true rent goes up over time, if you take the money you're not putting into a house and invest it, your investments will go up over time as well.
  • deleted 5mo ago
    [deleted]
  • kccqzy 5mo ago
    Theoretically these capital expenses like fence replacement or roof replacement should have been deducted from the market value of a house when you buy it: a theoretically rational buyer would take into account the present value of future capital projects. And this just goes to show how much the market value of a house is now much higher than the present value of all future rent. In simpler words, the market is frothy. Buyers just hope the market remains frothy when they sell.
    • skew-aberration 5mo ago
      I don't follow this logic. Homebuyers do deduct these costs - I certainly did. House price is still tightly coupled to NPV of rent - expenses. People are a) predicting higher growth in rent over time (there are sound economic reasons to do so, though AI is a curveball) and b) use different discounting rates due to access to credit, etc.
    • laughing_man 5mo ago
      Oh, all this stuff was fine when I bought the place fifteen years ago. But eventually everything in a house will wear out right down to the foundation. And that was my point -- these are normal expenses you need to account for as a homeowner. Forget the price; I'm just trying to keep the house livable because I live here.
• yieldcrv 5mo ago
  > After all the costs to buy and sell it, I probably lost more money on it than I would have spent renting an apartment. Don't tell that to real estate permabulls, even the idea of a landlord making money for a month or two between them paying banks for homes is a whole diatribe. Money in the toilet! They surmise, as if trading equities wasn't an option, or any other way to make money faster wasn't an option. As if other leveraged investments don't exist. As if leveraged investments that can optionally generate cash flow don't exist. As if they aren't such poor traders that they need the extremely slow collateral calls of real estate to survive. Because one of the dozen middlemen fumbled the bag, the real estate flipper had to pay rent for a month! Woe! They couldn't live in yet another suboptimally located suburb far away from stimulation or economic center, instead of using some of that that capital to rent somewhere in the middle of where people would actually want to live while putting the rest in equities or a productive business
• rogerrogerr 5mo ago
  Been thinking about this a lot. Curious what the rational folks of HN would suggest for me. Fact pattern: - I'm in the 25-30yo range, single male - Living with parents because I can; there's no friction and I mostly enjoy it. And I'm saving a ton of money. - Remote senior SWE for a non-FAANG, but still doing around $200k/yr between my W2 and a few other things - NW somewhere around 400-500k. I could easily go buy a house, it just seems like... a trap? Home prices are stalled at a little over 7x median household income, a bit above where they were in 2006 [0]. Everyone who tells me to buy property seem less like they have my best interest in mind and more like they're either repeating the cult saying of the last 50 years, or they're invested in a class of bigger fools existing. I fear the one-two punch of me becoming unemployable (AI is getting _really_ good at even the niche stuff I do) and the market crashing. I'm glad I don't have dependents to worry about; even more glad I don't have a mortgage to service. If I had to go live on my own, the napkin math I've been doing, even ignoring closing costs and house maintenance costs, is that I can rent a house for cheaper than I can buy a similar house in my area. This is "in the long run"; meaning at the end of 30 years I will have higher net worth having rented than bought, with conservative estimates of market performance and aggressive estimates of rent increases and house value appreciation. It all just seems nuts. I see people my age working at grocery stores (a good and honorable line of work) who are buying houses and I don't understand how they make ends meet. Am I stupid? [0]: https://www.longtermtrends.com/home-price-median-annual-income-ratio/ https://www.longtermtrends.com/home-price-median-annual-inco...
  • 0xbadcafebee 5mo ago
    Do you want to buy a house? Do you need to buy a house? If the answer is no to both, then don't buy a house.
    • rogerrogerr 5mo ago
      I want to buy a house, but I do not want to end up crazy underwater on a house. If I thought values would be at-least-stable I probably would buy. Everything just seems so bubbly that it feels like a trap.
• notepad0x90 5mo ago
  It's insane that there is literally nowhere that you can have a piece of land reserved to you without perpetually owing someone money. Like it isn't possible at all. With home ownership, you will always owe taxes, so there is no such thing as paying it off. People claim mortgage payments are fixed/stable... yeah, taxes are not. Where I live taxes are like 50% of what rent would be. And on top of that you have costly maintenance that could happen any time, and if you live anywhere prone to natural disasters or even the occasional naughty storm, you better have all kinds of insurance. You're still renting. Even if it is fully paid off. Let's say you decide to abandon modern life and move into the woods, guess what, there are fees to camp in BLM land or in national forests even, and even then you have to move around every few weeks. Camp anywhere near a city, you're homeless scum that has no rights anymore, what's the matter, the shelter is full? participation in the system is not optional. The only actual liberty and freedom is wealth in modern society, you still have to pay but you can setup lawyers and corporations to manage that for you, and fund any life style you want anywhere without worry. It used to be in our history, that so long as you can work a land and live off of it, and you lived in peace and got along with your neighbors, you were left in peace and to your devices. In the name of liberty, slavery has been instituted, since you must work, get currency and exchange it, and even then you must be kicked around like a nomad, whether you are renting (rent prices increase yearly until people move out), or camping in the forest or on a mountain top. Even in medeival feudalism, you got to stay in your allotted house and land, and to the most part currency exchange wasn't required, simply a share of your crops, animals,etc... was what was expected of you. I don't have (never will) children, I don't drive cars (and even if I did, there are road taxes when you pay for gas!), I pay a ton into medicare and social security, so why am i paying for property tax? i already pay for water/sewage separately, simply having the fire department out to help you costs thousands of dollars anyways, and i wish we could reduce the funding to cops. why would i pay property tax so much, and it is perpetual and permanent, the property owes the tax even, not the owner!! how ridiculous of a mental gymnastic. And all of this is assuming you're not unfortunate enough to live in a HOA, in which case it is the worst possible situation, non-compliance with a random person's wishes means they can sell your house on the cheap and tell your property with no consequence. I hope there are countries where things aren't this twisted.
• numbsafari 5mo ago
  How many times are they gonna double count the insurance a property taxes?
• tamimio 5mo ago
  And you know the funniest part: you actually don’t own it at the end, you are on a different (worse) type of rent contract called property taxes, that if you stop paying them you lose all that! So to rent nowadays is better: it’s controlled, you can bailout any month for whatever reason, be it a bad neighbor or another personal stuff or just getting into a better newer building, you don’t pay anything for maintenance, and sometimes all utilities are included too. Meanwhile owning is all burden, plus you don’t actually own it, you do all maintenance, and taxes aren’t controlled. Additionally, you are already paying for an inflated asset because of the speculation prices rather than actual cost.
• mikeweiss 5mo ago
  Wait if this was true then wouldn't landlords be LOSING money by renting? What am I missing?
  • machiaweliczny 5mo ago
    At current rates you are losing when renting (excluding possible appreciation), that's why it's hard to sell and easy to rent. Due to low rates before homes went big in value cause you were earning even not counting appreciation, so whoever had credit was maxing it to full for easy money but now situation starts to stabilise / reverse?
• nomand 5mo ago
  You don't even take care of your car well and you think you know what it takes to take care of a building? Anyway, you should buy a boat.
• thelastgallon 5mo ago
  Home ownership is a 30-year bet that you will have continued income to sustain the lifestyle[1] . It is extremely unlikely anyone will have a 30 year home run, without job loss, divorce, bad health and any number of life events. Most people would be considered super lucky to have a decade of good run. On the other side of the bet are the financial institutions, which will get continued income (as long as you pay) and will own the asset the moment you can't pay. It is a win-win for one side of this bet. If home ownership was actually profitable, the super rich would have setup all kinds of structures to completely own all housing. The funny thing is the bank does not have the money, they create it out of nothing based on your ability to pay[2]! Extracting rent from money which they don't have. You either rent a home or rent the money (very few buy outright with cash). Bank can rent the money they don't have, as long as you show income + credit history. This is why Warren Buffet owns (some part) Wells Fargo, not homes. [1] lifestyle = (mortgage + property taxes + insurance + repairs + maintenance) + health insurance + child support [2] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
  • brightball 5mo ago
    Best advice I ever got on home ownership: Don’t get a loan til you can save 20% for a down payment and then, never get more than at 15 year mortgage. Good advice on both counts. Once you have 20% down you get out of paying PMI (private mortgage insurance) and you can open a an equity line (HELOC) for about 80% of the equity in the house. It’s typically like a super low interest credit card that you can tap for emergencies. I didn’t have an income for 6 months once and had to live on it. The 15 year is critical. Do the math on a 30 year mortgage and you pay almost nothing toward the principle for a slightly lower payment for the first 10 years.
    • skeptic_ai 5mo ago
      [dead]
  • thelastgallon 5mo ago
    To further understand how banks win, the interest is front loaded. Proponents of home ownership always point to low interest rate for 30 year mortgage. However, with front loaded interest, the majority of payment goes towards interest payment and not building equity in the first 7 - 10 years. For a $400,000 mortgage at 6.4%, after 7 years, you'd have paid over $210,000. However, the equity built is only $38,942. The other $171,226 went entirely to the bank. The average homeowner stays in their home for only 7 to 10 years before selling or refinancing. Which means very little equity building, mostly interest payments.
• siavosh 5mo ago
  There should also be a counter article titled the real cost of NOT owning a home. At least in the macro sense, there are consequences for a generation spanning the global that is willing but unable to afford to purchase a home.
• sarbanharble 5mo ago
  Looking at all these fees broken down, AI should reduce many of these costs.
• musicale 5mo ago
  > Less than 21% of my monthly payment was going toward paying off the loan! Something is wrong with this.
• GuardCalf 5mo ago
  [flagged]
• contingencies 5mo ago
  Transaction overheads are generally not that significant over any realistic period of ownership (5+ years). The OP's situation was a not expensive house in a not expensive area over a negligible period did not appreciate sufficiently to cover overheads. That is not surprising. Philosophically the real cost is that you become a sitting duck target for taxation, theft, etc. The asset is also highly subject to external effects, such as regulatory change. This is not something you have control over, and can greatly alter valuation. Given the low returns plus high risk profile plus high capital input, it is generally fiscally smarter to have money in the stock market and rent. However, on the plus side owning a house means investing in subtle aspects of your environment becomes possible: things like gardening, workshops supporting your interests, or infrastructure projects toward self sufficiency. These can be some of the most rewarding parts of life. Ideally, if you can stand debt-free at a certain age and have self-sufficiency and passive income, with kids grown up and moved out, then you are well placed to relax. Renting ... good luck. Nothing is easy.
• webprofusion 5mo ago
  Owning a home is like paying into a bank account made from bricks, but it increases in value. Yes it requires upkeep and maintenance, because entropy wants it to be a decaying pile of rubble. The land will always have a value, so maintenance is kind of optional-ish. The people trying to convince you to keep renting are, sometimes, rental investors stealing from your children's inheritance. Renting is paying a property investors mortgage in return for a home you don't have to/cannot directly maintain but you are still paying for the maintenance on a weekly/monthly basis at an agreed rate with annual increases. On the other hand if you're not going to have kids it's bit like Brewsters Millions where you try to spend everything you make without acquiring assets and without running out of money while you still need it. You can always sell and go back to renting, but if you rent for 30 yrs you will put at least a couple of homes worth of your earnings into renting over that period.
• sparrc 5mo ago
  The author mentions interest but not that there is the mortgage interest deduction, which is a massive tax deduction especially during the first years.
• paul_knox 5mo ago
  [flagged]
• Deprogrammer9 5mo ago
  Live in something thats not massive, old & high maintenance. Live small, minimal & not reliant on a system designed to steal from you. https://youtu.be/rY9q9rbgUsA?si=jbDLtZvVu1rm0daQ https://youtu.be/rY9q9rbgUsA?si=jbDLtZvVu1rm0daQ
  • Ey7NFZ3P0nzAe 5mo ago
    I mean the video was interesting but the guy literally explains how wind ripped its entire roof off in the middle of the night during a storm.
• cicko 5mo ago
  Home is not the same thing as a house. Owning an apartment is way better than renting.
• vismit2000 5mo ago
  Where you die matters. A $30M estate left to children in WA owes $5M in state estate tax. Move to one of 34 states and that drops to zero, and in 8 of them state income and capital gains tax disappear too. The hard part is cutting that tax bill while landing somewhere you'd actually enjoy living: who your neighbors are, how educated and affluent they are, how they vote. This tool lets you optimize all of it across 8,000+ U.S. suburbs, towns, and cities at once: https://where-move.vercel.app https://where-move.vercel.app
• dubeye 5mo ago
  The real point of home ownership is control, you have complete ownership and responsibility which comes with pros and cons. I used to love renting but now value the control above all else. I suspect having kids is the largest factor in the shift
• vagab0nd 5mo ago
  One huge plus of owning is you are forced to put money each month into a likely appreciating asset. It probably doesn't beat someone who diligently DCAs into s&p 500 though.
• machiaweliczny 5mo ago
  The thing with home is that it's leveraged investment for normal people. You can pay 10% of value and resell later. Buying home for cash is less optimal but for credit it makes sense usually due to leverage and little downside risk. Plus usually every now and then you get money printing and you 2x your leveraged money or more rarely get hyperinflation and home for free. This was mostly issue of too low interest rates but that's how I see it from the past 10 years (non US resident)
• robeym 5mo ago
  I don’t think we should be discouraging people from buying homes. In a healthy market, the goal should be more households owning the homes they live in, not more homes being accumulated by investors and non-owner-occupant buyers. The mistake is not buying a home. The mistake is buying too much home, stretching the term too far, and ignoring maintenance. A cheaper house, shorter loan term, and realistic repair/addition budget change the math a lot. Own what you can actually afford to maintain.
• mancerayder 5mo ago
  There are pros and cons to home ownership - this article is both U.S.-centric and focused on the cons. Obviously maintenance costs are high, maintenance is time-consuming, and transaction costs buying and selling are insane. I'll add one - property tax will turn that high income tax (especially in an expensive blue state like CA or NY) and add a massive additional tax, easily transforming that 35-45 percent of income into 55-60 or more, a math absolutely no one does when comparing taxes with W European ones which are supposedly much higher. Here are pros and why you should probably buy: If you want a house in a low density but in demand area, you won't find anything for rent. Because appreciation goes up, because renting gets more expensive every year, because lease renewal every year is a stressful waiting game and decision point, because renters subsidize owners via interest tax deduction. And most importantly, you are free to do what you want inside your house. Just avoid HOAs.
• hewasahaterboy 5mo ago
  This argument is just rich people trying to convince poor people they don’t need to own anything (as they often do). The gap between wealthy and poor grows ever more.
• qsxfthnkp2322 5mo ago
  I bought a house to move close to my big tech job Now I have no job as I was reorged to a new manager who made it his first mission to fire me How do I pay for the mortgage That’s the real cost of owning a home as a swe these days. Management at these companies is so out of touch with reality
• guilhas 5mo ago
  > I bought my home in Auburn, WA for $321k, and sold it a few years later for $333k. After all the costs to buy and sell it, I probably lost... I was renting around 10k a year, that is -50k in the bin every five years. Even if I make 0 profit selling my house I am already up +50k. I pay less monthly and works like a savings pot. It is a lot of work. But whatever way you math it, renters are just paying someone else's mortgage
• bartoszcki 5mo ago
  So, roughly 16 years ago I bought a tiny flat. Renting tit for that long would already be more expensive than all the costs of ownership, even assuming that renting cost was constant (it TRIPLED). As a bonus, the flat is worth more than three times of what it was. So in total, I've paid 1.5x for a flat worth x and now it's worth 3x and I don't have to pay the rent! I'm not saying the article's author it wrong, just that your mileage might vary.
• ericturnerdev 4mo ago
  Hey, original author here. I'm just happy (and surprised) that someone found my little blog (Hacker News, of all places). People are making some great points.