3 ms·

>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 is

by fsckboy 4mo 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 4mo 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).

by fsckboy 4mo ago

barchar 4mo 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).