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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 talki
by 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 agoOnly 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 agoI 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 agoI have been renting the same unit for 15 years now. It was 400/mo when I moved in 15 years ago, and it's 650/mo now, 15 years later. I have paid about 90K in rent now over the last 15 years and this also includes water and heat. My friends with houses in my area pay about that much in property taxes plus heat that I pay for rent... I pay this small amount and make 6 figures and I put the majority of my income into index funds. I am fairly sure that I am coming out way ahead of a house. Plus how do you put a value on the time sink for maintenance and upkeep? Mowing, shoveling, etc.
- nyanmatt 5mo agoAgain, you are truly blessed. I've lived in multiple places (California) where the rent increases by the maximum allowed amount every year ($100-$200). None of your friends refer to their houses as "units", do they? You can't compare your situation with theirs lol
- SirMaster 5mo agoWhy shouldn't I compare though? I have looked at buying a house multiple times and I can't make it make sense personally. It's so much more expensive and more work. I just need a place to cook and sleep and keep my things.
- locusofself 5mo ago650/month is incredible. My mortgage payment is almost eight thousand dollars.
- SirMaster 5mo agoI really only need a small apartment, anything more would be a waste for me. I just need a place to cook/eat and sleep, and keep my things.