This is just not true for many people. A home is an asset. When paying a mortgage, you build equity that can be recouped if you decide to sell, or which can be used as collateral for another loan. When renting, you are still paying a mortgage, except is the landlord’s and you own nothing. Rent prices can also change at any time and by large amounts, forcing renters to move. The cost of owning a home is much more stable and predictable.
Homes are also typically bought with a loan and a relatively small down payment, making them a leveraged asset. Eg, if you put down 30k on a 300k house and prices increase 5%, the value of your home just went up 15k. If you instead just put 30k in stocks, you would need an increase of 50% to get the same result.
Regardless, when it comes to housing, your primary concern should always be stability and not “profitability”.
This is one of the greatest myths out there. Renting usually comes out ahead by the numbers. Ramit Setgi has a lot to say on the topic, with a US focus. Ben Felix has the same perspective for the Canadian side. Home owners by and large aren’t honest with themselves about the total cost of ownership.
yeah i was gonna say, some dude published an analysis of the total cost of buying a house / renting an apartment + investing in stocks for the same total yearly expenses and found that with the second option, you end up having more wealth at retirement age.
i can’t find the study rn but i’m sure i remember it.
gandalf_der_12te@discuss.tchncs.de 1 month ago
this is the way. renting + investing in stocks is more profitable
berg@lemmy.zip 1 month ago
Line go down, rent go up. What do?
This is just not true for many people. A home is an asset. When paying a mortgage, you build equity that can be recouped if you decide to sell, or which can be used as collateral for another loan. When renting, you are still paying a mortgage, except is the landlord’s and you own nothing. Rent prices can also change at any time and by large amounts, forcing renters to move. The cost of owning a home is much more stable and predictable.
Homes are also typically bought with a loan and a relatively small down payment, making them a leveraged asset. Eg, if you put down 30k on a 300k house and prices increase 5%, the value of your home just went up 15k. If you instead just put 30k in stocks, you would need an increase of 50% to get the same result.
Regardless, when it comes to housing, your primary concern should always be stability and not “profitability”.
ieGod@lemmy.zip 1 month ago
This is one of the greatest myths out there. Renting usually comes out ahead by the numbers. Ramit Setgi has a lot to say on the topic, with a US focus. Ben Felix has the same perspective for the Canadian side. Home owners by and large aren’t honest with themselves about the total cost of ownership.
gandalf_der_12te@discuss.tchncs.de 1 month ago
yeah i was gonna say, some dude published an analysis of the total cost of buying a house / renting an apartment + investing in stocks for the same total yearly expenses and found that with the second option, you end up having more wealth at retirement age.
i can’t find the study rn but i’m sure i remember it.