Quote:
Originally Posted by nkull
As has been stated before, it really depends on where you are...
Here, renting is throwing money away because you are going to pay for a roof over your head one way or another and the cost is not so much that your going to make a killing on investments - You either:
A) Pay into a house you own and build equity
or
B) Pay someone else to build their equity.
Having a landlord adds a middle man to the roof over your head need, and considering these landlords are in business to make a profit I don't see how that can be beneficial in most cases. All those costs that you talk about (repairs and what not) are going to be paid one way or another, you think the LL is going to loose money on a regular basis so you can save it?
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You can make the same argument for investing in the stock market, though. So you really have to do the math for your location and expected price changes in order to know whether your net worth would be higher if you buy sooner with a mortgage or rent and invest the difference* in the stock market and wait.
Your options are:
A) Pay into a house you own and build equity in real estate for yourself (while also paying money to the bank in the form of interest and the local govt for taxes, and to the insurance company, and to maintenance/repair crew) -
you build some wealth for yourself and some for other people
or
B) Pay rent and invest in the stock market and build equity in shares for yourself (while also paying money to a landlord).
You build some wealth for yourself and some for other people (just as in the owner case.)
Would you rather build some wealth for yourself and some for others, or some for yourself and some for others? It depends on how much the "some"'s are!
Prices are higher than average right now also
Case Shiller Home Price Index , so I'd argue that that's at least
prima facie reason to think it doesn't at the moment make sense to own in most areas in the US (not that it makes sense elsewhere in the world either, though!)
*(Down payment + closing costs + mortgage (PITI) + maintenance/repairs/HOA) - (rent + renters insurance)
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