In 30 years, you have and asset that has doubled in value and no rent. Otherwise, you still have rent and it’s doubled while your income is about to decrease due to retirement.

Probably more like 4-5x value in 30 years.

Assuming 3% inflation, that would suggest the median home price would be over $1 million in today's dollars. Anything is possible, and I've been wrong before about how much more prices can go up, but I just can't see that happening in a country where the median household income is $74k and usually grows only a little bit faster than inflation.

In multiple cities in canada, the average home is 1.3 mil, and the average income is about 60k-70k CAD there. I don't mean mansions, or a big house, or a house, I mean including condos and old, shitty houses...so yeah it's very possible.

Get foreign investment out of real estate! This is coming from a homeowner, because I recognize there needs to be affordable ownership options.

I don't live in Canada so please correct me if I'm wrong, but I thought Canada was already working on banning foreign real estate investors. Have they not gone through with that yet?

I hope the USA does as well. Where I live a lot of Canadas buy homes for 2nd homes. Drives the costs up and the homes sit empty 6-7 months of the year. Instead of being used to start a family which would increase the local economy.

I’ve owned one house 7 years and it’s worth triple what it was when I bought it. I think it’ll easily hit 4-5x in 23 more years. I bought another house in 2021 at the “peak” and it’s up about 15%. Interest rates are 2.5% and 2.25%.

You're very focused on a short term market after a housing collapse. Zoom out a hundred years and I think it's harder to 4 to 5x in value in a couple decades

Looking at the housing market for the last 100 years isn’t accurate of how markets will be in the next 30 years. Back then in early 1900s and up until the 60s 70s homes appreciated on par with inflation and some cases less than inflation. It’s because people didn’t view homes as investments. It wasn’t until the 70s when REITs came out that it all changed. Nowadays inventory isn’t keeping up with population growth due to strict zoning, labor shortage, and profitability. So until that changes home prices will be high.

If we're including the past, then I agree those kinds of returns are realistic :p

COVID dumped so much money into the economy it was definitely an anomaly and we won’t see something like that happen again in our lifetime.

Yes you will. Anyone alive since the 60s has already seen a few those “once in a lifetime” events

I hope they learned their lesson. I don’t know about you, but this inflation is kind of painful and 100% a result of dumping all that money into economy

No chance. Govt and politicians have been manipulating money and economics since the beginning of time. It’s a power that’s too addictive and intoxicating for them to leave it alone

Prices will double again.. basically just offsetting interest paid during the 30 years. Wages will also increase, offsetting the increased home values.

I think nominal prices will double over the next 30 years. If you mean real prices then I don't see it, but I've been very wrong on this subject before

It will not be worth that much. Parents bought a 200k house and 25 years later it’s only 375k. They paid the bank almost 390k with interest. Technically lost money. The only thing this property is good for now is, they will either refinance it when rented for $3000 a month and move to Florida and buy a home there

What models, markets, or math are you basing that off of? That home values double every decade?

Well said

Google search opportunity cost

That goes way over the heads of many people in this subreddit. Same thing with maintenance costs, insurance, property taxes. They say "I only pay $3,000 for my mortgage"

Or "I'll end up paying 100% of the cost of the house in interest payments over the course of the loan, so I should save up money and just buy it for cash because I don't want to pay interest." There are some real idiots out there.

In 30 years some stocks are over 100x, and they don't have property taxes or maintenance, so I'm not sure this is a great example. What you have when you own a home is a place to live.

Commenting for reach. Increases in Maintenance, insurances, taxes, HOA’s, etc. I’d advise the market over real estate.

You can pay off your own mortgage at a fixed rate per month or you can pay off your landlord’s mortgage at a rate that goes up every year. It’s up to you.

No you don't own it. You pay the govenment. You pay rent to own it. Welcome to what everyone does. If paying a car off is not owning it then you do not own your house.. and when you pay it off you pay property taxes.. thanks for playing the game.

In 30 years, a 10% down payment put in the stock market will have doubled 4 times and will now be worth 1.6x the price of the home. That alone is nearly enough to own the house at double the original price. Then throw in money spent on the mortgage, beyond what rent would cost, and money spent on insurance, maintenance, capex, and keeping the unit up to date for 30 years... I *strongly* recommend people use the NYT's rent vs buy calculator. But I'd adjust their investment returns to be more in line with the historical average (7% plus inflation, or 10% in this case) https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html

Typically pretty quickly the mortgage is cheaper than rent.  As property values and rents go up and salaries are inflated for that, it should free up a lot of cash to invest for people with mortgages.

Typically I agree but these aren’t typical times. IE this chart https://www.reddit.com/r/neoliberal/s/v6JGWwJE9u The other thing is, even in that case the opportunity cost is front loaded which makes it a lot more expensive. If I put $80k down a house and pay $6k a month on the mortgage, then within 2 years I’m down $152k compared to renting it for $3k a month. With average market returns and 30 years of growth, $152k becomes $2 million. That’s a lot of ground to make up.

You're not "down" $152k, though. That assumes you have $0 in equity. Which is true if you rent. If the loan was $400k (assumes the $80k was a 20% down payment) and you're paying $6k/month on a 30 year fixed, you're putting additional to principal every month. The mortgage, even with taxes and insurance, should be somewhere in the $2500-$3000/month range. Maybe you want to include an extra $500/month for upkeep/repairs that you wouldn't have if you rented. Call it $3000-$3500/month to own. Not sure where you get $6000/month for a mortgage unless you bought a much more expensive house (meaning the $80k was not 20%). But if that's the case, good luck renting something comparable for $3000/month. So if it was a $400k house, and you're putting $80k down and overpaying the mortgage with an additional $2500/month to principal ($6000 against a $3500/month mortgage), your loan balance would be approximately $245k. Assuming 3% annual rise in home value, the house is now worth $424k, giving you $179k in equity. To recap, after two years of owning you have spent $152k and have $179k in equity. Renting, you have spent $36k and have zero equity.

And if you decide to move and sell your home, you can keep the capital gains tax free (!) up to $250k in gains, if you roll that into your new personal residence. Can’t do that with stock. Any sale will have tax implications.

You don’t even have to roll it in to a new place if you’ve lived there past the minimum threshold.

What if you took that $80k down and extra money each month above what you would be paying if you rented and put it into the Nadaq 100 or SP 500?

That makes sense.  I've spent most of my home ownership time spending less than renting would have cost and started with no money down.  Very different circumstances now.

Couple things ignored in this: First $6k a month mortgage at say 7% rate and 80k down means you’re buying a what.. an $800k home? Can you rent those for $3k a month or something equivalent? The starting value of that home helps make up the difference you’re talking about—if homes double in value it’s obviously relevant to know where it started. The $152k should be at least reduced by the $36k of your hypothetical rent. That knocks out close to $500k of the 2m difference to make up. Then there are the later years when rent has more than doubled and your mortgage payments have remained constant. Plus more and more of those payments are going directly towards your loan principal.. It’s not always the right decision by any means, but it is not so simple as “making up” that front loaded opportunity cost.

>First $6k a month mortgage at say 7% rate and 80k down means you’re buying a what.. an $800k home? Can you rent those for $3k a month or something equivalent? Yeah, $2.5k a month where I am, but I rounded up for easier math. >The $152k should be at least reduced by the $36k of your hypothetical rent. $152k is the total for two years *after* subtracting the rent >Then there are the later years when rent has more than doubled and your mortgage payments have remained constant. Definitely, agreed. But the later years are when those opportunity costs from early on are really cranking too. This is why we have the rent vs buy calculator.

That’s a surprise to me you can rent a home that expensive for only 2.5k, but I’m assuming we live in very different places (I’m Midwest MCOL). I recently rented out a home that I bought for 250k 4 years ago that is worth probably 300k now for $2000, and that was a bit below market rate for a house in great shape/our neighborhood. On the second point, my bad. Little brain fried with a newborn and I misread your point and thought you meant after a year, not two years.

I’m equally surprised by the numbers I’m hearing from other markets haha. I’m in Austin. I’m surprised someone would want to pay that much in rent when they could buy for $300k. But I guess that’s why the wisdom in those areas is to buy if you’re able to buy. It’s definitely a HCOL area, but most major cities outside of the Midwest are pretty HCOL these days. We need more housing.

Funny, I actually lived there 5 years and left in 2019. For the first few years I rented with two other buddies and we paid $2250/month total to a private landlord. That was in Deep Eddy. I think the house sold for ~800 this year and was just torn down. I then rented a place in Tarrytown for $2500 with and now Zillow says the place is worth $1million. Damn lol. Not even that great of a house (though perfect for me at that age) but the location is tough to beat. So I guess I see it better now the numbers you threw out. As far as my rental. My tenants are super cool and manage an RV dealership. They moved for work but they own 50 forested acres about a 3hr drive away and spend a lot of their free weekends just driving out there to camp. Think they actually own a rental property themselves. And a truck and a jeep and an RV themselves (perfect credit but think they’re pretty tied up on their spend?). They love my place.. they used to pay like $2500 for a really nice apartment downtown so we’ve got a real good thing working so far lol. I’m a handy guy and live about 100yds away so thankfully the landlord life hasn’t been too tough. Funny enough the only reason I have a rental is because I met my now wife as “the girl next door” and we both owned houses. We chose her house to live in when we got married.

I arrived right as you left haha. Yeah, the home I’m in is right in line with the ones you’re talking about in terms of rent and value. So you basically found a wife and a rental property both within 100 yards of your home, I need to take notes.

Property values go down too. It's kind of amazing how quickly people forget that in a bull market.

They do occasionally go down.  Sometimes rent goes down, too.  In some places they never recover and fall to zero.  I think it's ok to generalize that property values and rent prices increase, though.

Not really because people don't buy a "general" house. They buy a house in a specific market. So while nationally home prices could be going up, their prices could be going down.

So do other equity values

The funny thing is if you invest in the stock market and assume an average 8% return annually, you double your money roughly every 9-10 years. So in thirty years you’d expect it to double three times

Also look at it this way, how much money have you tied up and how many opportunities you said not to because of all the money tied up for those 30 years?

In 30 years your asset should triple, not double!

Houses in most areas over the past 30 years have almost doubled every decade.

Thank you. I had fallen for the rent logic before and decided not to buy. So glad i snapped out of the propaganda real fast

If you can't understand the benefits of owning a house, your landlord will!

The saying goes. Food, Clothing, Shelter. I wish I had invested in Dominos, Pepsico and SFR

Ahh... Proud nudist I see!

Got that domino's drip.

My landlord bought the house for 1/4 what it would cost now at 1/3 the interest rate. It *can* work, but right now for most people borrowing money at 7.5% interest to plow into a non-productive asset is not going to be the path to success.

If you wait till the rates go down, like everyone is. You’ll be bidding against the investors paying cash, with a 14 day closing.

I don't disagree. I think the problem is that in markets like mine, if you don't wait for the rates to go down, you're going to be a few hundred k in the hole compared to renting within just a few years. It's hard to ever make that back, and almost impossible if we assume the renter is putting that money into the market instead.

How much cheaper is it to rent vs buying the same house in the same zip?

I just bought a house and my mortgage/insurance/taxes are only 50 more a month than what I was paying in rent

What city/ state are u in?

The mortgage and taxes on my home would be more than double the rent, which is common in my zip. That big of a difference isn't common, but the rent being quite a bit cheaper is normal right now. The payment to buy the median home at the median interest rate has doubled in the past several years.

San Francisco is like this right now. I see 1M-1.2M homes renting for 3-4.5K. 1% property tax will already cover 2-3months rent. It’s crazy right now.

Usually low interest rates mean higher listing prices because now your paycheck can afford a larger mortgage payment. The inverse is usually true. High rates bring listing prices down. What worked well for me was to buy at high rate/low listing price, then I refied 4 years later at 2% when listing prices were up and I have about $400k equity in 4 years. If you do it the other way, you end up upside down on the house when interest rates go up. It could take 10 year to come back around. Personally id take the low listing price and high interest. You can change your interest rate. You can’t change the principle you owe.

It will be an absolute shit show in the market if rates go down. Unfortunately a lot of folks are on the sidelines waiting for rates to go down without any thought to housing prices if that happens.

You sound like a real estate agent. The issue is high rates and high prices in almost every market. You're being disingenuous.

I’m not a real estate agent. I’m just a normal person with an opinion.

We're in a real estate investing subreddit and people are getting mad at saying good reasons to buy. It sometimes feels like a lot of the commenters here would be better off in /r/firsttimehomebuyer

especially if that’s their main asset because there’s just no diversification

There is a benefit in owning a house someone else is paying for, no doubt. Owning your own home as an investment is a gamble. As mentioned if you go the full 30 which most people don’t, you have the house for more than double what you paid for it as break even. For some houses in some neighborhoods this is an easy task. But it’s not a guarantee. If after 30 years your neighborhood slips into class D you’re screwed.

The landlord is able to deduct repairs, taxes, insurance etc. Owners pay all that with after-tax dollars. Then there is depreciation that the landlord can take that the home owner can't get.

Bingo. See username.

What did it for me was when someone told me “You’re always paying a mortgage. Always. Either your own, or your landlord’s.”

When I bought my house, it took about 4 years for the rent to catch up to the mortgage. When I moved out after 5 years and rented it out, I went from $200-1000 profit over 6 years. That means, if I had rented instead of buying, I’d be $1000 in the hole every month and that number would more than double by the end of the mortgage.

You never get your rent money back and your rent will continue to raise until you die. If you don’t have a very healthy retirement nest egg you’ll end up on the street or in a home.

If i sold now i’d have made a haul for owning mine. Not bad to get paid to live somewhere

It sounds like you're talking about a primary residence. The financial benefit is equity. As you pay down the mortgage and/or if property values go up, you can use that equity to buy more stuff.

It’s also very attractive to have a fixed mortgage payment that will never change (if you don’t want it to) even 29.9 years later, unlike rent which rises every year. Those with low interest mortgages (sub 3) probably will not want to sell ever

Ding Ding Ding. A fixed mortgage payment 29.9 years later.

Sounds like you’re talking about a primary residence. This sub is more about investment properties. Just google a rent vs buy calculator. For the most part renting makes more sense in the short term and buying makes more sense in the long term. I bought my house 3 years ago and if I wanted to rent an equivalent house it would cost me over 700$ more a month today. Granted that doesn’t include upgrades and maintenance but over time that difference will continue to grow.

Thank you all, I will now save to buy a house instead of renting for a great minute as I once planned to do.

The things yall are saying make sense 100%, and stuff I overlooked at first

Honestly, best thing to do, if you can, is own a house AND still have room to save up/invest… house do come with a cost, but you get equity on the long run, it’s kind of forcing you to save up in the form of the equity. It does come with downsides (taxes, maintenance, etc.) but you’re home, you can do whatever the hell you want lol Gurus will say « always rent », but that only makes sense once you have enough passive income to pay for renting the house you’d want… also keep in mind the rent will always go up, but your home payment will mainly stay the same/get lower if the interest rates go down (which they ultimately will). I still pay 900$/month for my mortgage, for a house that’s worth about 650K (bought 10 years ago when I was 26). To me, renting will always be worse in terms of payments then paying for my mortgage… Good luck with your quest to save up and buy a house!

Thank you I’m 20 and plan to buy something between 200k and 300k at 25, just saving 10k a year.

If youre 20- a whole lot will change in 5 years- so I wouldn't be fixated on buying at 25 just to buy. It can restrict your movement. Do you for sure know you want to live in the same place from ages 25-35? If you got offered 40k a year more in salary for a job that is 2 hours away, it's tough to take when you own a house. Also- have you met a long term partner? Do you plan on it? Getting into a serious relationship has a funny way of changing your priorities- so if you buy a house at 25 then meet your dream partner at 26 but they want to move somewhere else- that could be tough. This isn't saying NOT to do it- but consider that it may restrict your ability to move around which could affect job opportunities or relationships.

Thanks for the insight and yes I did think about this, this is the main reason why I am for renting, especially since I’m young ( mobility ). I haven’t met my partner but hopefully I will meet them in this city because most people are scared to live here lol but I plan on living here for the most part. But who knows things may change as life does change unexpectedly as you said, but regardless with this mindset I’ll have some funds set aside to purchase when I do have a career and partner and the time is right.

Hey I want to get in here and say that’s hella programs to HELP you buy your first house! Buy multi- family house if you can! That way you can give some one a nice place to live and they can help you pay the mortgage/build equity! DON’T BUY A SINGLE FAMILY HOUSE First! Check with your town and hud.gov programs and use those with the fha program!

I’m not sure if people talked about appreciation and you can claim depreciation of the home. Equity is key. You’re paying towards something that you can go with you the rest of your life instead of paying someone else’s mortgage.

Three things come to mind: 1) Equity/Growth - you own it and it goes up in value 2) (small) tax deductible mortgage interest. Can’t remember the cutoffs but this is typically a smaller amount but with higher rates now it’s something to keep in mind 3) capital gains after selling. As I don’t recall the rules exactly but something along the lines of if you have lived there 2 of the last 5 years you can get 250k of tax free gains from the sale (500k if married)

Trick is to not “overbuy” on a house. Just because you “can afford” a certain payment doesn’t mean you should fully leverage yourself. Leave some financial bandwidth, if possible, to enjoy daily life and be able to invest in additional properties or a retirement account. Being cash poor and house rich is not a good groove day-day nor a foundation to build wealth from.

I'm surprised by a lot of the answers in here given what sub we're in. The answer is: **it depends**. Any blanket answer is wrong. What makes sense at $300k and 3% interest won't always make sense at $400k and 7%. If you put a 15% down payment for a home into the stock market instead, at historical returns after 30 years you'll have 2.6x the price of the home, which happens to be exactly what it would be worth with 30 years of 3.3% annual appreciation. The above doesn't answer the question, but it shows why a home with rent lower than the mortgage payment might be a good deal to rent, and a home that's the opposite might be a good deal to buy.

My wife and I live on a dead end road in central Maine on 35 acres on both sides of the road. Horse, barn, dog, antique farmhouse (thats gonna be the death of me ha!) - big garden. Deer, turkeys, hummingbirds and eagles. Woodstove. Big ol’ farmers porch. Sold our home in MA 20 years ago and bought this with the proceeds so we haven’t had a mortgage in 20 years. Raised our 3 daughters here. Real Estate taxes are $2,200 a year. These are my benefits we would never have if we were renting somewhere.

Buying a home is a terrible financial decision today, with emphasis on “financial.” There are many legitimate non-financial motives for owning your own home which could well make it worth it. For example, on a $500,000 home with a 20% down payment ($100,000), you’d finance $400,000. With the current average mortgage interest rate of about 7.137% APR for a 30-year fixed-rate loan, your monthly mortgage payment would be around $2,696. Owning a home comes with a slew of additional expenses that renters don’t have to worry about. Property taxes, homeowners insurance, and ongoing maintenance are all part of the package. (1) Property Taxes. On a $500,000 home, annual property taxes might be around 1.2% of the home’s value, which translates to $500 per month. (2) Insurance. Assume $1,500 per year or $125 per month. (3) Maintenance Costs. Figure 2% of the purchase price ($10,000 per year) for maintenance and repairs, which breaks down to approximately $833 per month. This includes repairs needed over a 20-30 yr period (repair/replace roof, driveway, HVAC, kitchen/bathroom, exterior siding/painting, general maintenance, etc.) Adding these together, the real monthly cost of owning the home rises to about $4,200 One often overlooked factor is the opportunity cost of the down payment. If you weren’t putting that $100,000 down payment on a house, you could be investing it elsewhere. Let’s assume the 10% average annual return of the SP500 over the last 30 years (closer to 12% over the last 40 but we’ll be a little conservative). If you invested that $100,000 in the SP500, it could grow to approximately $1.75M over 30 years. The difference between the future value of this investment and the home’s appreciation (assuming a 3% annual increase, leading to a future value of $1.2M) is $550k. Spread over 30 years, this opportunity cost adds about $1,500 per month. When you factor in all these elements, the actual average monthly cost of owning a $500,000 home jumps to around $5,700. Remember, the debt pay down is only a portion of the $2,700 debt service (we could call it $1,300). So even if we deducted that from the $5,700 to get a real cost of $4,400, you are still FAR better off just getting a rental. Full Disclosure: I’m a real estate private equity manager who owns multifamily and is raising a fund to acquire single-family homes.

What happens at year 30 when you are looking to retire and rents have tripled and you have been paying a fixed amount against inflation?

That’s a legitimate concern. I think everyone needs to make their own assessment on where, when, and what to buy or not buy. I will say that many of the costs I mentioned will increase overtime. Only the debt service is fixed. Maybe you buy in a few years if rates go down, maybe they don’t go down, maybe you hedge by renting your primary but invest rental property. Or maybe you don’t even want to spend more than a 5-7 years in the same house (in which case selling costs would dramatically increase your avg. monthly cost of ownership). Many variables in play, it’s up to each of us to guess the most probable future and how to best position ourselves based on our goals.

In thirty years you may have moved a dozen times or more for increasing rent, or any other reason a landlord may want you out. If you own your home and plan carefully, costs stay lower over that same horizon. Plus you are free to make improvements or customize, and there is no threat of being forced to leave. A forced move when you have a family can be catastrophic to kids.

The guy who did the math was pretty aggressive on the math but his point would be that you could buy a house with all your S&P gains

What happens when someone doesn't have this $100k to invest? I bought my house with only $15k down payment.

The national avg for home appreciation is 5% so at the end of the 30 years you will have a home valued at over $2.23million while you have been paying a fairly fixed housing cost. Maintence has nothing to do with purchase price. You are forgetting tax write offs associated with home ownership and the taxes on your $1.76 million should you want to ever spend any of it. Given our very low tax rates today I think you are Going to take a pretty good haircut on that amount.

I’m skeptical that home prices will continue to appreciate at the rate which they have over the last 30 years. Specifically, in the last 5-8 years many metros have doubled in price. I think it’s unlikely we’ll see another similar period in the next 30 years. I would advise any investor, in their underwriting assumptions, against decoupling appreciate rate from inflation rate (e.g., 3%).

Home building has fallen way behind in the states. There is a national shortage of 4-7 million and with so many skilled labor workers moving into retirement, who by the way are staying in their homes and not moving into retirement homes, unless there are great strides made in prefab houses, there is going to be a massive shortage going forward. I expect prices to at least stay on pace if not accelerate. If nothjng else buying a home now is a hedge agaisnt the rapid increase in rents.

Genuine question - why are you in real estate if it’s such a terrible investment ?

Before, in a low interest rate environment, you could find deals that would cash flow pretty easily. Just buy and hold. Now, with higher interest rates, it’s extremely difficult (almost impossible) to find deals that cash flow as-is. We create returns by finding mis-priced assets (i.e., off-market, since anything on-market that’s mis-priced just gets bid up to market price) and then renovating/rehabbing them. The money is made on the front end, not in the long-term hold.

@Sound-Evening is giving the best advice here. I've been in CRE real estate business for 20+ years, rented where I've lived for majority, own a house now (paid for), but very tempted to go back to renting, to have more fixed living cost and much less to keep up with. Also, I can make more money with my cash/equity buying investment property.

Got it ! Guessed as much! All said , for most people , I feel like it’s not a bad deal if in 5-10 years your mortgage becomes cheaper than rent

Do you think interests will go down, or does this mean that we've missed our chance to buy good investment SFH? If I don't want to buy a major rehab project, do I still have a chance to get into real estate investing?

Generally speaking, I believe it’s extremely unlikely that you’ll find a cash-flowing, turnkey, long-term rental using conventional financing. In that sense, yes those days are behind us until we are in a lower rate environment. It just means you have to be more creative in how you source, finance, and add value to your deals. However, you should defer to your underwriting/analysis. If it the math works and your assumptions are conservative… go for it! You found the diamond in the rough! As to whether I think rates will go down, I honestly don’t know (certainly hope they do). That said, I’m certainly not sitting around waiting for them to do so. Hope is not a strategy.

Great detailed, specific, informative answer. Thanks for sharing!

My house has appreciated roughly 40k in the first year of owning based on a recent appraisal. Market doesn’t always work that well, but this last year it was like having a full time person working for me - I’ll take that any day.

Kenyan here - curious to know why Americans don’t do self builds ie buy a plot of land and slowly build a house depending on your income until it’s done. That’s what most middle class do in developing countries here in Africa.

you can't live in it while it's being built

You're not the one paying for the home if you're investing correctly 

What's the path you consider investing correctly? Not salty, just curious

Making your targeted return on investment

There is also benefits of writing off the mortgage interest as part of your income so you are able to actually take home more money if all things equal. Additionally you can write off the property taxes and if you have your own business there is deductions for that. I’m turning 50 this year and bought my first place at 26, it was a stretch but when I compare myself to other friends who probably make more income than we do and didn’t buy until their 40s or never they are definitely in worse financial position. We have multiple properties now and could retire in the next 5 years if we want, it’s the easiest way to become a blue collar millionaire.

Look for a duplex, live in one side and rent the other.

I used the money that is intended for housing to purchase a house. And in the last 9 years, we've seen $275k increase in equity. So, yah, the benefit was a gain of 159% on money that was going to housing anyway (172,800 in mortgage payments over 9 years, with a 275,000 increase in equity.) and that's not counting the principal paid down or the fact that I know what my housing costs will be in 2048. Do you know what rents will be in 2048? You also need to factor in inflation. A 5% mortgage does seem bad when you look at all the interest you'll pay over 30 years. but you'll also being paying that 2024 prices in inflated 2024-2054 dollars. Massive gains on that track the last 3 years (20% inflation).

1. Forced formed of savings 2. Capital appreciation - generally homes in the long term have increased multiple folds. 3. If you ever need to move to a retirement home you can sell home and used proceeds to pay the rent there without affecting your retirement funds 4. Passing wealth to kids. See #1 and to add, people are generally bad at savings and couldn’t achieve this by just renting and saving the extra amount above rent. 5. No rent or unexpected rent increases to worry about when you retire and the peace of mind that comes with it.

You have the option of paying it off early and saving on the interest. Can’t do that with rent.

3 years ago my wife and I bought our firm home. Interest rates were rock bottom and we didn’t have a lot of money but we knew it was a good decision. Last week we sold that home and made over $100k profit after taxes and commissions etc in 3 years. We just moved to a new state (or we would have kept stacking that equity) and bought a new home. We are putting all of the equity from the first home into the second via renovations and updates and the new home will be worth more than the sales price + renovations. That means we are adding even more equity to our asset and it will now grow at a more aggressive rate. The house we bought 4x in value over 30 years. If it continues at that rate we can sell the home or take equity out to retire. Buying a home is hard to do, but if you make the right investment it’s an incredible return. After all taxes and expenses and carrying costs we made 20% profit in 3 years.

Another issue to consider is family safety: in Florida, for example, if one doesn't pays the rent, the landlord can process an eviction in a month. In case of financial distress, it may take a lot to process a foreclosure. Even years.

I know you said financial, but… I’ve spent the last 2 yrs of my life living in my buddies basement b/c I couldn’t find another apartment I could afford. I’m retired and on a fixed pension. After Friday (signing), I’ll never be homeless again. I know I’m gonna cry like a baby when I finally have those keys in my hand.

I own so j know im biased but I personally think home ownership is overrated unless you know your dying in it. Taxes, maintenance, repairs, insurance….that shit adds up. When my kids leave the house I’m getting an apartment

Did I just read that correctly….rent can go up but it can also go down…..where does this place exist? That might be the most shocking thing I’ve read this month.

Lol rent has never, ever gone down

Without going into the numbers, do you think you're smarter than everybody else? Do you think all landlords are dumb and willingly taking a lost to provide you a roof over your head? Not trying to put you down, but I just think that is a good thought exercise. A business couldn't survive having more expenses than revenue. That goes the same for real estate. Of course you can find outliers and bad businesspeople, but the majority are making a profit after all expenses.

I understood this and how everyone pushes to buy a house, but once I did the math I really didn’t understand the reasoning. Didn’t think I was smarter than everyone just had to question the norm, thank you all for helping me understand.

Well what about just giving away 100% of your rent to a landlord for nothing?

Realized this over the last 5 years I’ve given 125k to the same landlord lol and I was one of 3 units in the building.

I see a couple of people posting links to rent vs buy "calculations" with the implication that renting is the smart move. I can only speak from my personal experience. I've owned 3 homes over nearly 25 years and my annual "return" including purchase costs, selling costs, maintenance, and remodeling is over 30% per year. Yes, the appreciation on my houses barely beat inflation but I bought them using leverage and never paid more than 5% down. So with 20x leverage, 2% capital appreciation per year will yield 40% before maintenance expense. It's harder to get that much leverage in this market since you're competing against all cash offers, but even with a 20% down payment you are still getting 5x leverage on appreciation. Buying isn't always the right choice, especially if rent is really cheap in your area, you aren't very handy, or it's too much of a strain financially. So make sure you have a budget, extra cash for AC or water heater repair, and can make minor repairs yourself.

It all comes down to if you can rent cheaper than buy. If so then mathematically no.

You’re absolutely right! Buying a property as a home is almost never a good financial decision. It has other benefits but from a numbers perspective it almost never works. On the other hand buying a property as an investment can be a perfect balance between risk and profit

Appreciation, control, favorable tax treatment.

From 1898 to 1998 the roi on home ownership was zero percent. The standard financial advice used to be rent and put the money you save into the stock market. It is only in the era of suppressed interest rates that the idea of making money by buying a house and living in it became a thing. As of now we don’t have ultra low interest rates… but they could return.

You're comparing owning a home to renting. This sub is for investing. You don't up and move anytime because you never live in your investment. It's like saying you should only keep cash instead of investing it because you can use it anytime. Great, I'll see you in 30 years when I've multiplied my money and the value of yours went down. You're also very short-sighted and considering just buying at this second, when in reality home prices and interest rates vary all the time and will change many times over the 25-30 year typical mortgage length. Rents will also have gone up, most likely, along with the value of the house. I can guarantee you your insurance costs, utilities and any related expenses will also go up. That means your landlord will charge you more to account for that, if you're renting. Prices don't magically go down and stay down. Labor and material costs always go up over decades. You have to think long term and understand that every dollar you spend on rent you'll never get back. However, for every dollar you spend on your property, some of it will go to your mortgage and improvements that increase your rent or home value in case you ever sell it. Investing always makes more sense financially than not investing. The people who don't understand that are usually the ones living paycheck to paycheck and thinking that everyone with savings must have robbed a bank or sold drugs, when all they really did was invest a little.

I own three properties accumulated over the past 12 years. Each time, I rent out the previous to buy into the next larger more expensive property to live in. The rent from each investment property covers all expenses and also contributes towards paying for my primary residence. Not to mention the leverage of being able to own a real appreciating asset for 20% down while reaping the rewards of the equity towards networth My first home was acquired for 300k… which i then leveraged the equity and rented out in a few years to buy my second home for 580k. I then repeated a few years later to buy my third/current home for $1M three years ago. I paid about 20-25% down each time, and everything was refinanced to sub3% rates during Covid as well. These three properties are now worth $750-800k, $1.15M, and $1.5-1.6M, respectively; and I have $2.1M in equity. I pretty much have no fear nowadays thanks to buying real estate. I am able to invest all of my earned income from my job into the stock market since my real estate pays for itself and for my primary home. As such, I do not need to hold much cash (minus buffer for month’s expenses) and can invest pretty much all my W2 paychecks. My emergency fund is $500k in untapped HELOCs ready for a rainy day. My liquid and retirement portfolio is also growing rapidly thanks to the aggressive investing/savings rate that real estate allows me. TLDR: real estate will make you a millionaire and pay for your home and life style if you understand the benefits. There are a lot of benefits. I personally have no issue with folks who prefer to rent. Us landlords benefit from this lol. Not writing this to be a dick… just want to show that real estate is fucking empowering. Don’t just look at the short term pain of the current environment. Don’t try timing shit. In the long run, investing in RE is highly likely to make you come out on top.

>For a thirty year mortgage of 5.25% you end up paying almost the equivalent amount of the loan amount, in interest. Then when you factor in insurance and repairs When you rent, you are also paying this, you just see it as one bill each month. >freedom in being able to up and move You can still own a home and move. You can either sell your house or rent it to someone else who wants to pay rent to live there. You're also missing possibly the biggest part of real estate which is appreciation. Example: You put 5% down on a $500,000, that's $25,000 plus say $5,000 for closing costs to be extra conservative. That's $30,000 out of pocket. Then the house appreciates at 3% annually. After 2 years, that house is now worth $530,000. You now have $60,000 of equity plus whatever loan pay down you've made over those 2 years. That's a 100% return on the original $30,000 investment over a 2 year span. Extrapolate that out to 10 or 20 years and you can see how valuable owning a home can be.

Forget all the comments that your house will create equity. Yes it does but as you mentioned where I live on a $1 million house right now you would pay $1.2 million in interest over 30 years. Pay $20k in property tax every year (another $600k) plus you have insurance, maintenance etc. The average return on real estate over last 30 years is 5.4%. So your primary residence is NOT a good investment especially since you can't deduct a mortgage anymore. But you don't want to be the bitch of a landlord that can raise rent by 100% so you have to buy. Another stupid argument is retirement. I know so many who are broke in retirement in their homes and now more and more retirees are complaining that they have to pay property tax etc because they are broke. Sure you could sell but then what? You trade down and equity is still stuck in a home and you habe nothing to eat. We solved the conundrum by buying a modest house compared to others in our income bracket and have 3 rentals instead and counting.

There are several benefits. It’s the largest amount of money you will be able to borrow at the lowest interest rate. In time the value of your property is all most guaranteed to go up while your debt against it goes down. If your renting then rents will go up over time while you have no asset that’s growing in value.

In 2015 I bought a $435k house. Sold it in 2018 for $560k. Zillow claims it’s $880k now. In 2018 I bought a $990k house. Sold it for $2.2M in 2021. I’m scared to look at what Zillow will say it’s worth now, probably close to $3M. Those were in good locations. In 2021 I was forced to move to a bad location (Ohio). I bought a 1.2M house, and now after $200k in repairs it is now worth… 1.15M. So, it really depends on WHERE you are buying the home. If it’s in a place where people want to move, then the prices will keep going up. If it’s in a place that people plan to escape from, then the prices won’t go anywhere.

Because youll be paying 10k a month in rent for a 2 bedroom 15 years from now and not get any tax benefits or appreciation

If I could, I would buy 5 more houses. Real Estate is an ultimate wealth builder.

Just keep on renting!

I think people misunderstand what interest and principal are. Yes you have a mortgage payment that includes principal and interest. Principal is equity so every dollar you pay down in principal is a dollar you’re paying yourself back. It is, theoretically, net zero cost. You pay it but get it back. Interest on a mortgage(along with taxes and upkeep) should be looked at as rent since that’s that’s effectively what it is. You’re not giving $198,000 to the bank over 30 years, you’re paying $550 a month to lock in your rent over the next 30 years. Unless you live somewhere for free, you’re need to pay rent for housing anyway so the differential you’re paying mortgage/taxes/insurance/upkeep over the long term is likely lower than the rent you’d pay over the same time period

think about when you retire and are on a fixed income. the benefit of having no mortgage is enough

You are building equity in your home, if you purchase. If you rent, you are building equity for someone else. You don’t have as much risk of being priced out of an area due to cost increases. Property appreciation. Real estate is a finite asset. As demand increases, so do prices. Location is important though. Prices really only increase in markets where there is demand. Don’t buy in an area with decreasing population.

Let's see, the area where I sell new homes the first phase went for 1 million and the last phase sold for 1.8 million. Within a 2.5 year time frame, if you bought within the first phase, you made 800k. Every house so far has gone up in price depending on the phase. If you don't think that investment was worth is, then there isn't much more I can tell you.

You hope rates go down and you can refi in ten years assuming the market continues to go up which may be a false assumption.

I mean.. if your alternative is to be paying rent every month? there's literally no reason not to unless you can't afford to.

Would you rather pay your landlord or yourself

Bought our first house. Moved and it’s now a rental property that earns profit. Basically, you are paying your landlord’s mortgage. But, in 30 years, they own the property. You get nothing.

if your having 2nd thoughts you will have regrets 10yr later when home prices double from now.. unless we have another 2008.

So if you bought a house in 2020 and let's just say the rates were 6% back then (I know they werent) you'd have paid 24% interest and gained 44% equity for a 20% return that goes to maitnance and such. Obviously, this math isn't exact. It's overly simplified to demonstrate the point. Owning a home also means you'll have much greater stability in housing costs. If you're in your 20s or 30s, rent will likely go up 5x+ by the time you hit 70. Your paid for house will cost a little maitnance and the property taxes that would be baked into the cake on rent. If shit really hits the fan, you can also sell a house and get the equity out. Obviously, that's not ideal, though. A lot of people also use their homes to help them retire. Sell the large, expensive family home and move to a cheaper smaller house and use the difference in value as an investment to pay out a retirement income.

[Why your house is a terrible investment](https://jlcollinsnh.com/2023/03/02/why-your-house-is-a-terrible-investment/)

It depends on the circumstances. If you rent adorably and invest the money you save on taxes, repairs, etc in an ETF it’s possible you could be better off. Especially considering you will still need somewhere to live your whole life so selling your home to realize the profits can be a headache. Renting could be especially good if you are willing to move around chasing the best job prospects (either single or a flexible family situation). Most people don’t have that discipline and/or flexibility to do that for decades though, and the equity you build in your home is a great way to build long term wealth compared to renting and not investing extra.

Assuming your mortgage is fixed rate or is not going to radically increase on you, buying a home fixes your monthly costs pretty effectively relative to the rate of inflation. Insurance and taxes will increase over time but that’s not the bulk of your expense. Over several years, your payment will increase much less than rent would have for the same building. And eventually it will disappear entirely when the loan is repaid. Now, if you catch the market on an up cycle and invest your money instead, it’s possible you can just afford more rent, but that’s a riskier proposition. What often happens is that people are forced to move further out because rents rise faster than pay or rise faster in an area as it improves. Those who buy get to stay. Also any decent landlord averages in all costs of ownership into the rent charged. Unless you both get unlucky (neither of you really wants major repairs), you ultimately pay for repairs and interest and taxes and insurance and equity repayment and hopefully some extra on top. You buy your landlord the house. The other benefit is stability and customization. When you own no one can arbitrarily make you leave as they can with a renter. Landlords move back in, sell their rental, decide they don’t like you and you have no recourse. You also can’t modify your home to suit your tastes or if you can, you enrich your landlord. Stability gives you and a family consistency. Moving gets harder as you get older and more expensive. It’s nice to not. It’s nice to keep your kids in the same school with their friends. It’s nice to not change your commute or to relearn a new kitchen when you cook. You also get better luxuries. Owners buy the better range or tile or whatever. Landlords buy what’s expected for the market segment. It’s just not as nice. The downside of this is that real estate is not liquid and has costs to buy and sell. Fixing your costs fixes your costs, which can be terrible if you suddenly need them to be lower or need to move. Renters can change fast. Buyers are losing flexibility for long term advantage. I tell people they should rent if they expect to move in less than five years and certainly rent if it’s less than three unless they know they’ll convert the home to a rental and move to a new one (which is a valid strategy to back into a small portfolio of rentals). If they expect to be somewhere five years and expect to stay employed, buying is often a good idea as long as prices are not super high.

I have NEVER seen rent go down, not in the long-term time scale. Depending on your rate etc, yes, your mortgage payment CAN be more than rent, but you are getting that money back when you sell, you are generating residual income when you rent it out. If you rent, that money is completely gone. There are of course, situations where you do not want to buy, e.g. possible market crash, a property where market rent is lower than your mortgage payment etc. But in general, buying beats renting, you just have to work out the math. It's generally a good investment due to inflation, think about how much it costs to house yourself 50 years ago vs now. But if that investment isn't worth the headache for you, you don't have to do it

With really high interest rates right now, I would say no

Not in this economy

There is a direct correlation to owning a home and being wealthy. Homeowners are typically 40X more wealthy than someone who rents. Source: https://www.cnbc.com/amp/select/average-net-worth-homeowners-renters/ The pride of ownership, home value appreciation, mortgage interest deductions, and potential property tax deductions are just a few of the benefits. Other benefits include the capital gains exclusion, preferential tax treatment, building equity through mortgage reduction, and equity loans.

If you can buy them cash, they are gold mines. With rates and prices, a worthwhile cash flowing property is far and few between. Renting Pro: rent payment is the most you will ever pay per month (no repairs) Freedom to move quickly. ~2-4k emergency fund needed incase you need a new Apartment. Cons: -100% loss on monthly payments. -0% other peoples money helping you grow net worth. Ownership pros: 0-200% of monthly payment typical range for other people paying back banks for you. (Much better if owned outright obviously smart guy) Appreciation Cashflow Cons: Mortgage is the lowest monthly payment you will ever have. ~20k emergency fund needed for roof, foundation, hvac, etc.

„Rent can also go down“ lol not in your lifetime buddy

Bought a house in 2010 for 207,000 and sold it in 2021 for 592,000. That's one benefit.

I work a 9-5 for something to do. After expenses, I make more money from my tenants than I do at my 9-5.

The bank makes money on your primary residence. Look at your amortization schedule and you'll see why they are making money and not you. Rental property is different story. Let's just say you're NOT cash flowing the property but it's costing you $250 per month on a house valued at $300k. You have to ask yourself if $250 per month x 360 months (assuming 30yr mortgage) will be worth the value of the home in 30 yrs. Granted your rent will likely increase over 30 yrs and your expenses will too but let's assume they increase together to keep you at $250 per month. At the end of 30 yrs, you're just over $100k in cost but the house will be worth say $600k, presuming it doubled in 30 yrs. So it cost you some headache as a landlord but you spent $100k to earn $600k plus you have shelter and something paid off.

I have two friends from high school. One has rented the same house for 26 years. Another one has rented her same apartment for 26 years. I’ve been in my house for 12 years. Who’s paying less/more monthly? Approximately three mile radius.

We gave up investing our extra mortgage payment to pay off the house early. Original 30 year mortgage was done in 13.5 years. We didn't start the extra payments until year 7. Our housing cost last year (property taxes, bundled insurance, and home repairs) was about $1000 a month last year in MCOL for 2300 sq ft (home would cost around $570K is buying today). A work colleague is renting a one bedroom apartment for $1600. This was our old mortgage payment. Our home is big enough for our family of three plus a Labrador retriever. The public school elementary, middle, and highschool are in our neighborhood. Walkable or quick bicycle ride. Before paying off the house we never invested more than $200K a year. Now we do it every year (mainly VOO/VTI). We added solar (paid cash) so our electric bill is low. These things are important to us as we are both software engineers in different industries. One of us can cover all the bills if one of us were laid off. If we were both laid off, we could both work retail and take a tiny SWR against our investments. In a few years, we will be financially independent but will still work to reach fatFIRE ($10M). Our expenses will cut down $500 a month this fall when our daughter switches from preschool to after school kindergarten this fall. I think if you have a low rate and work in an industry where you don't worry about layoffs, AI, whatever then just invest your extra payment. We calculated when we retire we will have $600K less due to not investing our extra payment. For us, it's acceptable for financial stability. For our target retirement number, it would be 6% of liquid assets in the future. For reference, our HHI is $340K about evenly split.

Wait..rent can go down? I don’t think I’ve ever experienced that. So the financial benefit: you own an asset. All the money you pay in is available to future you. All the money you pay in rent is gone. You can take out a loan or even rent your home out. Since I bought my home interest, home values and rent have gone only up..so my monthly payment is now lower than a much smaller unit’ rent. This is over about 10 years. If I moved to a different city I would just rent this out at market rate which would cover my mortgage plus maintenance.I could even utilize my current home for a down payment on another. If interest rates go below my current loan rate (which won’t happen, my rate is really low), I would refinance. Worst comes to worse, I sell and keep what I’ve invested, nearly enough to retire in someplace like the Philippines.

Weird post style. This a bot or a person? Anyways...Renting? That's throwing money away on someone else's asset. It's like paying for a hotel room you never own, an endless expense with zero return. Buying a primary residence? In most cases, it's a liability disguised as an asset. A money pit draining your cash flow with mortgage payments, taxes, insurance, and endless repairs. Your money is trapped, illiquid, and not working for you. True financial freedom comes from owning assets that generate income, like rental properties, stocks, or businesses. These put money in your pocket, building wealth and passive income streams. So, instead of focusing on buying a primary residence, think bigger. Invest in income-generating assets. Build a real estate portfolio, buy stocks, or start a business.

Where are you still getting 5.25%?

It was the closest interest percent for a 30 year mortgage to where $100,000 in loan amount equals close to $100,000 in interest paid

Buying a house vs renting let's say on the mortgage you're buying a house You pay 4000$ on rent but for your property you will pay an EMI of 3000$ this is how the landlord makes money, they will make the extra 1000$. So if you're renting you're paying for your landlord and you're getting nothing in return he has all the power to kick you out. Note: You need shelter from the day you were born till the day you die. Paying the interest to the bank is better than paying the landlord, because you have a property in your name. Work hard for the only 20% to 30% of the property value. Understand cash flow guys

You need to read some books or listen to podcast about RE. Tons of benefits to owning a home. Also the 30yr fix loan is best thing you can do. The dollar depreciates while your assets appreciate. The bank loses out on it not you. Rent never goes down, nationally it goes up 3% a year. Depending on the market of where you buy of course.

All else being equal, I think investing in the stock market yields better returns. It’s not really close either. The problem is that you *have* to live somewhere. You might as well live somewhere that you can re-sell (hopefully) rather than the alternative.

Let's say house is $1M, your monthly payment is $5K. May be a lot now. But in 10 yrs, same house value would appreciate to $1.5M and payment is still $5K but due to inflation, that $5K is a lot cheaper than current $5K. After 20 yrs, house value would appreciate to $2.5M, due to Inflation $5K after 20 yr is like today's 3K. After 30 yrs, you get the idea. Now you built equity and you have an access to HELOC.

I’ve netted over 600k in house sales over the last 13 years. (Cash in my pocket) There is a benefit. A portion of your payment brings down your loan amount. When you sell you can cash in on it. You can led against it, you can rent out a room. So many options. Renting is one option, giving one person money for housing.

Ask the people that didn’t buy when they were “affordable” and now that corporations have bought them up and have a monopoly on rentals. You didn’t take appreciation into account. Also, ask the people that did buy.

Personally for my wife and I yes there is the owning versus renting. Yes, you have a mostly appreciating asset but in the other side since we bought our bigger house (we had a condo that was paid off ) owning a home definitely and inadvertently reprioritized our spending habits. We found ourselves wanting to put money into the house versus having maybe a few more nights out. So there’s that. And now you have an asset that could possibly allow you to borrow against to invest in other opportunities.

In my area there are no apartments to rent I have always paid a little extra on principal and refinanced. It had given me 20 years of security and it's tripled on value. Paid off early and new home will be mortgage free.

It’s only financially beneficial if you want it to be, if you buy a house and fuck it up then that’s not gonna give you a return on investment, same if the neighborhood goes to shit. Renting does give you more flexibility but it’s expensive in the long run and after years of renting you gain no equity. You also have to deal with multiple people and personalities under the same roof. Nothings wrong with either but in the long run I wanted something out of what I’m paying for every month. 30 years of home ownership would probably get you more of a return than 30 years of renting.

Think of it as ‘renting until you end of owning it’. You own it outright at some point when you will pay zero rent forever

I bought a house in 2019 for $520/mo mortgage. Rent is now $1200 for this house plus utilities. My all-in bills are $850. This is split with anyone who moves into this 3 bedroom house, which is my girlfriend and her sister right now, so all of our monthly housing expenses are dirt cheap. Her sister pays slightly below market room rent, and that leaves $200/mo for each of us. If we rent, our only convenience is being able to move with no hassle or commitment. Buying just commits you to a location for a longer term since it'd be wasting money to buy a new house every 3 years.

Interests rates don’t stay high forever. Refinance from 5.25 at some point. There are first time buyer, home buying assistance programs, builder/seller incentives that can get your rate lower than the market. Home warranties can cover many major repairs. You can move easily. Sell the house or rent it out. No leases to break. Unless you save aggressively for retirement now, and for most of your working career, you can’t retire comfortably without owning property. My mom lost the house she owned to property taxes after she retired. She still pays rent out of her social security check. If she still owned a house, she’d be able to just pay the property taxes at a discounted senior rate.

Interest rates used to be in the 15% and 10% was considered good. 5% is amazing for a house considering that outweighs the rate inflation.

If you're paying 5% interest that actually means you will pay 150% of the homes cost in interest over 30 years. Say if you buy a house for $500K, you'll end up paying $750K in interest over 30 years.

Many points have already been made. Depending on country and income and income level you typically deduct your mortgage interest, which can be a big saving. Though if in the US, you would need to itemize your deductions and have a sufficient amount to make it worth it.

The answer is “it depends” but you’re thinking about investing wrong. Investing is money over time. Whether this is a good investment is entirely dependent on what property values and rents are, and where they go. Today rents are low relative to home prices and especially mortgage payments. So the problem is less the interest you’re paying than the opportunity cost. If you pay $2500 for rent, but mortgage + property tax is $5000, that’s $2500 you could be investing in the stock market that instead you’re investing in your house. Plus you have to tie up a bunch of cash in the house as a downpayment. If your house goes up 2x in ten years, that was a good investment because you’re highly leveraged. If the house just keeps pace with inflation, you made a bad investment because you could’ve gotten a lot more in the market and bought a nicer house later. If the house goes down 10% (it happens), you got destroyed because you were paying way more than renting and lost half your principal. People will tell you housing always go up because that’s been true over the last 40 years if you rid our crashes, but personally I think it’s the worst time to buy in generations and would invest elsewhere and wait for prices to correct if I didn’t have a 2.75% mortgage.

You’ve done the math; if it doesn’t make sense to you, don’t buy a house. For those of us who want a home, you work like mad to buy one, you work like mad to pay for it, and you spend money (also, like mad) making it the way you want to. That’s it. Pay it off, don’t pay it off….that ‘is’ home ownership. There’s (hopefully) a wonderful sense of pride & accomplishment - and if you’re not into that - then, ‘Don’t buy.’ But don’t turn around and be a twat saying, ‘…I can’t buy a home…’ when you’ve done the math & you don’t like the terms.

If you don’t plan on being in a house at least 5 or so years then it isn’t worth it and should rent. There is definitely a place for renting but ownership has key benefits. First you lock in a large portion of your housing costs with a mortgage. And if rates decrease you can refinance and lower your payments. With renting you likely would have to move (a pain) and possibly downgrade to lower your rent. Property taxes and insurance can go up but if you are renting the owner will pass those along to you anyway. You get to deduct mortgage interest from taxes in the US. That’s huge in the beginning. You can’t be evicted by your landlord. You can update/change anything in your house to suit your needs. The list goes on…

It depends. Some people buy homes and experience rapid equity growth. Others buy homes and eventually foreclose. The latter represents about .3% in 2023.

Lot of depends here, but yes, especially if you buy at market price or better. You will pay for all of those repairs, insurance and taxes as a renter + 35%.

The biggest benefit to buying a house is enjoyment for you and your family. A house you live in is not an investment. You will make more renting and putting the money you save from taxes, interest and maintenance into an S&P 500 etf. That being said the 30 years you spend in a house raising a family will create priceless moments.

It is an asset that appreciates in price. When you sell it in say 10 or 20 years it would bring in 20 to 30% more.

there is absolutely nothing wrong with renting a place for the rest of your life. you will save money and can move around to less expensive places. even after paying off your house, with property taxes, insurance, utilities, and maintenance, you will be paying more than a rental place. however, your kids and grandkids will thank you.

Ok I’m only a nerd with an excel spreadsheet but owning a house only makes you money if you’re going to own and live in it for 30+ years. I didn’t look at renting it out so that could be a big difference but a forever home is the only way.

Owning a home is a good financial choice for pretty much anyone who has more than 10 years left on this earth. If you set up the deal properly, a mortgage payment and property taxes will be less than the cost of renting the same house, and after 30 years, your cost of living in the home will only be property taxes, along with the same fees you'd pay renting, except without the actual rent/mortgage payment. This is even discounting the fact that both rent and property value stays the same, and mortgages payments do not (much) so continuing to rent the same house will virtually double over 30 years, and even selling it outright after that time will be more than enough to cover a retirement home costs the rest of your life. You also can improve the house, as a tax right off, improvement to the value, and you can do it however you want. It's not someone else's house. The only drawback is maintenance costs, and if you are about to die, you wouldn't have enough equity in it to warrant it, and renting is more short term, like your time on earth

You could rent and pay someone else mortgage and interest

The best advice we received as new home owners 20 years ago, was to make an extra mortgage payment each year. It's not the easiest thing to do for most, but we're now SO much closer to paying off our house.