5 ms·

Maybe because renting forever is ultimately cheaper than buying a house, especially if you aren't able to save at a rate that you can buy a house at a reasonabl

by EC1 13y ago

Maybe because renting forever is ultimately cheaper than buying a house, especially if you aren't able to save at a rate that you can buy a house at a reasonable time.

w1ntermute 13y ago
https://www.khanacademy.org/economics-finance-domain/core-finance/housing/renting-v-buying/v/renting-vs--buying-a-home https://www.khanacademy.org/economics-finance-domain/core-fi...
- EC1 13y ago
  http://www.theonion.com/articles/friend-who-sent-link-to-8minute-youtube-video-must,32442/ http://www.theonion.com/articles/friend-who-sent-link-to-8mi...
- this_user 13y ago
  What most people also don't take into consideration are the opportunity costs of buying a house and paying a mortgage for the next twenty or thirty years. If instead of buying you rent and invest the money you would otherwise pay for the house there is a good chance you will be much better off in the long run.
  - WalterSear 13y ago
    ~7 years in and my mortgage is cheaper than rent already.
    - graeme 13y ago
      That's great for you, but it doesn't tell us much about whether it's better to own or rent on average. Your testimony is like someone saying they bought one stock that's up 20%, so stocks must be better than bonds. There are other homeowners who have lost money, and some others who are doing even better than you. Individual stories don't tell us about aggregates.
    - notajuggalo 13y ago
      So what? The monthly payment is only a small piece of the puzzle
- pmorici 13y ago
  I think this has come up before when that video was posted here but when you consider buying vs renting you really need to do the calculations for your specific situation that should be the only take away from that video. Taken as general advice that you should always rent and never buy it's pretty horrible just as the opposite is horrible advice in general. It's pretty easy to get a rough idea of what is better in your area using a rent vs buy calculator the New York Times has a good one... http://www.nytimes.com/interactive/business/buy-rent-calculator.html http://www.nytimes.com/interactive/business/buy-rent-calcula...
walshemj 13y ago
So tell that to the renters in SF who are learning a very hard enconomic lesseon about the downsides of not owning your own home
- DamnYuppie 13y ago
  Would you mind following up on this, specifically what lesson are they learning?
  - drzaiusapelord 13y ago
    I'm not well versed in SF, but whats going on there is whats going on in Chicago. Due to a few factors like migration back into the city and gentrification, rent values have gone up pretty high in Chicago and much higher in SF. Renters are seeing rates that they simply cannot afford in the long run. Meanwhile, homeowners are seeing the value of their homes go up. Its a win for the owners and a loss for the renters. The decision to own isn't a static one. Its a relationship between what a house costs and what renting costs and when its appropriate to make the move. On top of that, one needs to worry about what happens in 20-30 years. I'll be retired with a paid off home and a low property tax load due to a senior exemption. Lifelong renters will still need to pay full rent until their dying day. This can affect when or even if you retire.
  - malyk 13y ago
    Rent for my 1 bedroom/1 bath, 1000 sq ft. loft in SF: $3200 Mortgage for my 2 bed/1 bath, 1200 sq ft. home in Oak: $1900* We had to pay ~$70k in closing costs, so it isn't /easy/ to just go and buy something, but one possible lesson is that if you spend your whole life renting you are subject to the whims of your landlord (especially if you don't have rent control) and could end up paying a lot more for a place to live then you would if you had bought. Of course, the buy to rent numbers alternate back and forth depending on market conditions, so that doesn't hold true all the time. * - Lots of confounding variables here though. SF vs. Oakland, $650 a month for property taxes aren't accounted for in the monthly mortgage cost. But we have a 40'x 50' yard, a garage, no shared walls, easier parking, etc. So it's an individual choice, but even all in my house is much cheaper than an equivalent rental unit in SF (maybe even if you factor in a new roof every 20 years, other maintanence, etc...at least in these market conditions.)

by EC1 13y ago

Maybe because renting forever is ultimately cheaper than buying a house, especially if you aren't able to save at a rate that you can buy a house at a reasonable time.

w1ntermute 13y ago

https://www.khanacademy.org/economics-finance-domain/core-finance/housing/renting-v-buying/v/renting-vs--buying-a-home https://www.khanacademy.org/economics-finance-domain/core-fi...

EC1 13y ago
http://www.theonion.com/articles/friend-who-sent-link-to-8minute-youtube-video-must,32442/ http://www.theonion.com/articles/friend-who-sent-link-to-8mi...
this_user 13y ago
What most people also don't take into consideration are the opportunity costs of buying a house and paying a mortgage for the next twenty or thirty years. If instead of buying you rent and invest the money you would otherwise pay for the house there is a good chance you will be much better off in the long run.
- WalterSear 13y ago
  ~7 years in and my mortgage is cheaper than rent already.
  - graeme 13y ago
    That's great for you, but it doesn't tell us much about whether it's better to own or rent on average. Your testimony is like someone saying they bought one stock that's up 20%, so stocks must be better than bonds. There are other homeowners who have lost money, and some others who are doing even better than you. Individual stories don't tell us about aggregates.
  - notajuggalo 13y ago
    So what? The monthly payment is only a small piece of the puzzle
pmorici 13y ago
I think this has come up before when that video was posted here but when you consider buying vs renting you really need to do the calculations for your specific situation that should be the only take away from that video. Taken as general advice that you should always rent and never buy it's pretty horrible just as the opposite is horrible advice in general. It's pretty easy to get a rough idea of what is better in your area using a rent vs buy calculator the New York Times has a good one... http://www.nytimes.com/interactive/business/buy-rent-calculator.html http://www.nytimes.com/interactive/business/buy-rent-calcula...

walshemj 13y ago

So tell that to the renters in SF who are learning a very hard enconomic lesseon about the downsides of not owning your own home

DamnYuppie 13y ago
Would you mind following up on this, specifically what lesson are they learning?
- drzaiusapelord 13y ago
  I'm not well versed in SF, but whats going on there is whats going on in Chicago. Due to a few factors like migration back into the city and gentrification, rent values have gone up pretty high in Chicago and much higher in SF. Renters are seeing rates that they simply cannot afford in the long run. Meanwhile, homeowners are seeing the value of their homes go up. Its a win for the owners and a loss for the renters. The decision to own isn't a static one. Its a relationship between what a house costs and what renting costs and when its appropriate to make the move. On top of that, one needs to worry about what happens in 20-30 years. I'll be retired with a paid off home and a low property tax load due to a senior exemption. Lifelong renters will still need to pay full rent until their dying day. This can affect when or even if you retire.
- malyk 13y ago
  Rent for my 1 bedroom/1 bath, 1000 sq ft. loft in SF: $3200 Mortgage for my 2 bed/1 bath, 1200 sq ft. home in Oak: $1900* We had to pay ~$70k in closing costs, so it isn't /easy/ to just go and buy something, but one possible lesson is that if you spend your whole life renting you are subject to the whims of your landlord (especially if you don't have rent control) and could end up paying a lot more for a place to live then you would if you had bought. Of course, the buy to rent numbers alternate back and forth depending on market conditions, so that doesn't hold true all the time. * - Lots of confounding variables here though. SF vs. Oakland, $650 a month for property taxes aren't accounted for in the monthly mortgage cost. But we have a 40'x 50' yard, a garage, no shared walls, easier parking, etc. So it's an individual choice, but even all in my house is much cheaper than an equivalent rental unit in SF (maybe even if you factor in a new roof every 20 years, other maintanence, etc...at least in these market conditions.)