But I know one thing - you'll never build equity by renting.
_____________________________________________________
Not a helpful statement though is it? That's like saying you'll never pay RE taxes while renting.
If renting frees up cash flow that you use to max out your 401K I wouldn't be surprised if renting would help you build equity.
I'll take real estate equity in investment (rental) properties over 401 (k).
Sure you do. You pay real estate taxes on someone elses' property. When your lease is up, your landlord still owns the real estate and you have nothing to show for your your money.
If renting frees up cash flow that you use to max out your 401K I wouldn't be surprised if renting would help you build equity.
Interesting theory, but it seems pretty speculative. Most people rent because they can't afford to buy, not to maximize their 401Ks.
A better statement would be that the money spent on rent builds no equity while mortgage which leads to eventual ownership can build equity assuming the property values continue to appreciate.
I pay $1,600 a month rent in a home that is appraised at $500k.
The math is pretty easy...
I admit that if I had known back in 99 that we were in for the biggest bubble in history, I would have bought then. But at least rent has been flat (and maybe even gone down a little) since then.
I was a homeowner for twenty years. I have been a renter now for nine, and LOVE IT.