Originally Posted by long101
I didnt read all of the posts, but here are my thoughts (and I'm in contract to buy my first home)... You will either have to pay housing costs in form of home ownership or in renting. Obviously landlords are not in the business to lose money.
I am buying in a major metro (chicago), plan on staying put for 7-10 years, and possibly renting the place after we move. Even if the place were to decrease 10% in value during the next 10 years, I think I would still come out ahead vs renting. I'm buying a non foreclosure/ shortsale, so I'm not getting a steal.
Even if housing prices dont rise, interest rates will at some point. Then you will have to pay more, wether thats as a owner or renter. Just my .02
Good basic math - but you missed one factor -- Risk.
In the case of a Rent relationship, all risk stays with the owner.
Last year, the place we were renting (also for sale) went down more than our entire rent. Price down over $20,000. Our total rent was $14,400. Plus there were another $4000+ in property taxes.
While they have now marked down that $20,000 -- it is still not sold, and they will likely have to mark it down another $20,000 or more to get it sold.
Even for intentional "investors," a lease house only has to sit vacant a couple of months in a year to wipe out all profits for that year and beyond.
So the real numbers are that landlords (and owners, as well) do have a very real risk of losing very real money.