Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I do agree that in a lot of cases, if not most the numbers will show that renting is cheaper. But being in control of your living arrangements is a huge benefit to people that is worth something too. Being able to do whatever you want to your place, but more importantly being able to stay as long as you'd like. This probably isn't a big issue if you're renting from an apartment complex, but most SFH and townhouses are through private parties, who at any given time can decide to not allow you to renew your lease.
This topic has been done to death in different variations over and over. Since this thread is specifically related to the FINANCIAL benefit; it narrows down the fringe benefits people can claim on buying vs renting. The only thing that matters is "in which scenario are you likely to come out ahead more often?" OP you have to compare apples to apples. A SF house in the same neighborhood as a 1 br condo will always cost more overall, that's just an obvious fact. So when you use that comparison to run your numbers, all you get is confirmation bias.
In almost all areas of the country you will come out ahead buying an identical property over renting it. The very few financial scenarios where renting is beneficial is:
1. If you have a high chance of being relocated by your job. Or if you plan on relocating for a new job.
2. Your planning on buying a bigger place in the near future (for whatever reason) then the place your renting. So your saving the difference for a down payment for the next few years.
Almost all other reasons for wanting to rent are emotional or irrational. If your talking about pure finances owning a property over renting the same property will almost always yield you a higher networth in the long run. Now when you throw in factors related to personality, emotion, irrationality, making stupid decisions etc. then owning vs. renting is a less clear cut choice.
By the way, I intentionally left out the math of owning vs. renting to keep my post short. I have included it in past posts but some people are just too blind to ever see the simple truth. It's like someone insisting the sky is purple even when its clear that its blue. So, I'm not going to bother with long posts involving math anymore.
tell me which side you want me to argue and i can produce the math for or against buying or renting in fact i can base it on my own real life scenarios and argue it both ways .
we have had property swing both ways mathematically .
anyone who thinks they can boil the numbers down to a general rule is dreaming.
we have made 7 figures renting and investing elsewhere by not tying the money up in a house and we had situations like my ex who can live for 1k a month less owning vs renting her same apartment decades later . ..
Last edited by mathjak107; 04-19-2015 at 06:40 AM..
tell me which side you want me to argue and i can produce the math for or against buying or renting in fact i can base it on my own real life scenarios and argue it both ways .
we have had property swing both ways mathematically .
anyone who thinks they can boil the numbers down to a general rule is dreaming.
we have made 7 figures renting and investing elsewhere by not tying the money up in a house and we had situations like my ex who can live for 1k a month less owning vs renting her same apartment decades later . ..
Rent for $1000 for 30 years = $360,000 (and you own nothing when you move $0)
Now lets say you buy for $1000 month for 30 years = $360,000
but...... you can now sell that place for $350,000. $10k difference divided by 30 years means it cost you $28 month to own vs $1000 month to rent.
I know I'm oversimplifying it. I'm generalizing just to prove a point. In the end.... if you don't want to buy, don't. Simple as that. Tell your friends and family to mind their own business.
tell me which side you want me to argue and i can produce the math for or against buying or renting in fact i can base it on my own real life scenarios and argue it both ways .
we have had property swing both ways mathematically .
anyone who thinks they can boil the numbers down to a general rule is dreaming.
we have made 7 figures renting and investing elsewhere by not tying the money up in a house and we had situations like my ex who can live for 1k a month less owning vs renting her same apartment decades later . ..
There are local markets where a property can be rented for less then owning it. But I'm not interested in that. Those are the exceptions not the norm. If renting came out cheaper in general then you would never have as much landlords invest in a property as there is in the US because there would be no money to be made. You may have singular examples of many scenarios where either renting or owning can be beneficial. I can give you examples of countries where renting is cheaper then owning but the USA is not one of them.
IN GENERAL in most areas of the country renting an identical property will cost more monthly then owning it. If you can disprove the last sentence, then I'm all ears. And by "in general" I mean "in most cases" not that "owning is ALWAYS better then renting." This isn't an idea I just came up with in my head. It's an established fact:
The article states, as I stated in my previous posts; besides mobile people almost all others are better off buying then renting when looking it from a pure financial point of view. Even if you adjust the interest rates to the historically average of 7-8% buyers would come out ahead if you crunch all the number. Anyone that believes otherwise is only analyzing this comparison from real estate experience limited to the local area they live in. Otherwise, they have confirmation bias from their own math or read a website designed to push a false idea.
Last edited by griffon652; 04-19-2015 at 07:21 AM..
Rent for $1000 for 30 years = $360,000 (and you own nothing when you move $0)
Now lets say you buy for $1000 month for 30 years = $360,000
but...... you can now sell that place for $350,000. $10k difference divided by 30 years means it cost you $28 month to own vs $1000 month to rent.
I know I'm oversimplifying it. I'm generalizing just to prove a point. In the end.... if you don't want to buy, don't. Simple as that. Tell your friends and family to mind their own business.
Additionally, and in the spirit of oversimplification:
Back to rental inflation...
We are in our current home since 2002.
In 2002, you could have rented it for about $1200. Today, I would expect to get about $1900.
Rents are trending upward here, and increased rent is every landlord's goal anywhere.
Regardless, there it is in a nutshell, unsimplified and totally cogent:
"In the end.... if you don't want to buy, don't. Simple as that. Tell your friends and family to mind their own business."
Sometimes I think that you just enjoy trolling. Yes, people can pay less for rent and save money. People can also buy a cheaper house and save money, too. The bottom line is that people need to live somewhere. If buying is cheaper (which it always has been for me), then why shouldn't someone consider it?
Never fear, though--you do not need to buy a house unless you want to.
Ok, fine. I was just pointing out a major flaw in your argument.
This topic has been done to death in different variations over and over. Since this thread is specifically related to the FINANCIAL benefit; it narrows down the fringe benefits people can claim on buying vs renting. The only thing that matters is "in which scenario are you likely to come out ahead more often?" OP you have to compare apples to apples. A SF house in the same neighborhood as a 1 br condo will always cost more overall, that's just an obvious fact. So when you use that comparison to run your numbers, all you get is confirmation bias.
In almost all areas of the country you will come out ahead buying an identical property over renting it.
The very few financial scenarios where renting is beneficial is:
1. If you have a high chance of being relocated by your job. Or if you plan on relocating for a new job.
2. Your planning on buying a bigger place in the near future (for whatever reason) then the place your renting. So your saving the difference for a down payment for the next few years.
Almost all other reasons for wanting to rent are emotional or irrational. If your talking about pure finances owning a property over renting the same property will almost always yield you a higher networth in the long run.
No - see above.
Quote:
Originally Posted by griffon652
Now when you throw in factors related to personality, emotion, irrationality, making stupid decisions etc. then owning vs. renting is a less clear cut choice.
By the way, I intentionally left out the math of owning vs. renting to keep my post short. I have included it in past posts but some people are just too blind to ever see the simple truth. It's like someone insisting the sky is purple even when its clear that its blue. So, I'm not going to bother with long posts involving math anymore.
Rent for $1000 for 30 years = $360,000 (and you own nothing when you move $0)
Now lets say you buy for $1000 month for 30 years = $360,000
but...... you can now sell that place for $350,000. $10k difference divided by 30 years means it cost you $28 month to own vs $1000 month to rent.
I know I'm oversimplifying it. I'm generalizing just to prove a point. In the end.... if you don't want to buy, don't. Simple as that. Tell your friends and family to mind their own business.
Which renders your whole argument suspect. You need to make sure you are not omitting lost income on time and down payment, repairs, maintenance, HOA, taxes/insurance if not included in mortgage, immobility costs (e.g. commute cost when job moves) etc.
Ok, fine. I was just pointing out a major flaw in your argument.
And yet...you didn't. Maybe your keyboard got stuck. That's okay.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
