Posted on 09/01/2015 7:47:01 AM PDT by SeekAndFind
In most areas of the country, homeownership costs more than renting. Many economists with calculators claim the opposite, but the calculations and conclusions are often highly misleading. As is often the case, the devil is in the details.
We recently reviewed one highly publicized calculation that owning was cheaper than renting in almost all markets. That calculation had a number of outdated assumptions, including:
Don’t get me wrong. We believe homeownership is a great long-term investment for those with stable employment. It is just not less expensive than renting.
(Excerpt) Read more at businessinsider.com ...
Regardless, renting is dropping money into a pit never to be recovered where in owning a house at least some equity in it can be realized.
I guess it doesn’t cost more if you own a bunch of homes and rent them out.
However, there are benefits to ownership beyond cost. Lack of a landlord is a big one for me.
RE: Lack of a landlord is a big one for me.
If you’re paying property taxes, it’s still like paying rent.
RE: I guess it doesn’t cost more if you own a bunch of homes and rent them out.
A lot of people with money do that. I guess it is more stable and certain (in terms of income and capital appreciation ) than the stock market ( as long as the homes are located in prime locations ).
So landlords don’t factor in property tax into the price of the rent.... silly post
There’s another factor. Repairs individual home owners pay for are getting more expensive every year. Part of it, inflation. Another part, town building and improvement regulations.
The only cost with a cash house is maintenance and taxes.
I like paid-off.
/johnny
True. But looking at the other side of it. How long does it take before the homeowner starts to accumulate equity? After the first 10 years into the loan? Certainly not after the first year or even first couple of years because most of the payment is going towards the interest.
And how much does that principle cost the homeowner over the life of the loan in interest? Double the cost of the home? So in order to see $250K in equity, the homeowner might have to spend $500K or more. I don’t know the exact numbers but do the math.
The other side of it is that the property usually appreciates in value and that is instant equity.
If you rent, you still pay property taxes - the landlord's.
Here in high-tax NY State, you don’t own a home, you share it with the government in an unequal partnership.
Unless you live in Manhattan between Wall Street and approx. 110th St, Taxes and maintenance eat up far more than any minimal price appreciation
Owning is a better move, the price differenial doesn’t compare apples to apples, such as comparing rent for a 1 bedrom apartment to a 3 bedroom 2000 sq foot house.
That’s the wrong take, I think. It took the post to point out that owing taxes on the property every year on penalty of having it seized is still a form of rent - just paid to the government.
My mortgage is less than a comparable rent on the same size house.
Normally mortgage payments are less than rent for the same square footage. So if you drop a thousand a month on an apartment that money is gone; as for mortgage payments your payment for the first ten years or so is mostly interest that you’d get back on your income tax. I guess there’s valid arguments for both sides.
There is no such thing as ownership of private property. When the government (be it Federal, state or local) can tell you what you can & can’t do with your property - as long as you must ask permission to build an addition, or as long as you must pay property taxes, that property DOES NOT belong to you. Anyone who thinks it does is delusional. You only THINK you own that property.
Exactly. Renting might be okay for a single person or a couple without children. Then too, there are no longer affordable houses being built. They’re four bedroom, two and a half bath monstrosities. My great grandad told me about those houses like Levittown that was built for returning GI’s from WW2 that were true affordable, two bedrooms, a single bath, kitchen, living room.
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