@clue.codes: Inb4 inflation Inb4 rent goes up Inb4 leverage Inb4 can’t live in your portfolio Inb4 leaving house for kids Inb4 op can’t inb4

B D :

Yeah dude, because when I’m 65 I’d just LOVE to keep paying rent. I’d much rather take the property tax and maintenance (which is vastly overblown for most cases, especially if you have insurance or a warranty). Yeah, first 10 years suck but you have to think long term

olli :

Interest on your mortgage is deductible. Property values in high rent areas also tend to appreciate a lot (look at SF home values since COVID). Real estate is an important part of a diversified portfolio. You can rent the place out if you move, or if it has multiple bedrooms you can house hack while living there.

appleuser82367614 :

Buying a house in SF back in 2024 is probably one of my best decision. 10% down and my SFH appreciated so much these last year that my equity basically removed the PMI on its own. My mortgage is stable while median 2bd is now over $6k in the city 😬. All these and it’s only been like 2 ish years

M :

it is a leveraged investment. mortgage also stays flat, rent goes up. There are cases to rent, of course. but if you are in a spot for awhile, it’s usually better to buy (depending also on the area).

beatsandpaws4 :

We live in the SF Bay Area and I go back and forth on this all of the time. My main fear is not having paid off housing in retirement, but I supposed we can always move to a LCOL city/country and rent there or buy something in cash

user4559502123512 :

Agree with 90% of what you have to say. Renting and taking the difference of what you would have bought the house for, and instead invested in the stock market is the smart thing to do, for most people. The one thing that I would say that you forgot to mention is that a mortgage is one of the very few assets that most people can obtain “cheap” leverage with. In your example of putting 100k down on a 500k house, that is getting an effective leverage of 400%, which if you were to do that same trade in the stock market, you would pay an interest rate much higher than with a mortgage. There’s is also sizable tax benefits towards owning a house that stock ownership does not entail. Having said that, I think that you are 90% correct in your analysis.

abondben :

Buying a home should be though of more as a "life choice" than just an "investment"

Constance :

True. As another commenter said, in many cases it's life choice not investment but is just viewed as default. There's twee phrase: "many people who say they want kids really only can only handle a dog, and many people who say they want dogs can really only handle a cat". There's similar idea with homebuying that I'm struggling to word. Basically both the actually-handle-dogs and the actually-handle-cats should only have an apartment and the whole house thing is overblown, is what Im tryna say

Paul :

People should run an analysis of the outcome of each depending on where you live, here renting is is more expensive than buying and it's not close, and you're gaining 100% of the appreciation of something you don't even own yet, which for me is six figures tax free in a couple of years, that alone outstripping the maintenance and interest. Only really important if you're moving somewhere else. If investing works out better that's great too because renting is really flexible and low effort, it just doesn't work out here although I'd prefer if it did.

Geworfenheit :

First You can’t jut count the nominal amount paid on mortgage. They need to be discounted to a present value for comparison due to the existence of inflation. The point of owning is that you lock in the monthly payment. Rent price can and do increase every year. Secondly about the interest payment, that’s like paying rent to bank instead of landlord. Under two conditions owning is objectively better than renting: 1) appreciating asset price and inflation 2) rising interest rates (in case you get 15/30 year fixed rates) people who got sub 3% mortgage in 2018-2020 profit so much like they literally rob the bank (legally)

Mike W :

just buy with cash 🤨

Tina Chi :

Just Jess | Prima’s Vintage :

I mean, I’m dreaming of buying my retirement cabin in the cascades and living part time there and part time in Italy (duel citizen) and retiring at 45 (3 years). I just can’t tech anymore. It’s been 21 years.

datakritter :

Wow - my mortgage is $2000 and the cheapest rents here for a 2b/2b house would start at $2500 and go up from there. Plus, the house appreciates 7-12% per year. I made more in profit than I paid in total for my last house. This may be true in markets without significant appreciation, but renting is always more expensive than owning because you are paying someone else's mortgage plus their profit.

Tommy Gunn :

Casual 6-7 reference thrown in. 👏👏👏

fancykevin3 :

It is more about the deflationary aspect of owning a home. That carries into selling it and buying another home.

Eric :

Shirt?

user75548180441881 :

6 7

A Wild Pilot :

This model is betting on the idea that if you invest the difference you’ll have enough money when you’re ready to retire to buy a home with cash. No way I would want to use a portion of my retirement to pay rent every month.

Austin :

Something no one says is you most likely have higher standards for a house you would buy vs an apartment or house you rent. I have also spent way more money per month on my house than just the PITI

DallasKula :

I tried to convince my sister to no avail.

gfjunction :

You can put as much down on principle as you want/can afford. You talking about people only paying the minimum mortgage payment monthly. The real way to look at it is if you paying rent you’re paying someone else’s mortgage rather than paying your own. I think renting is ok for some people depending on age and lifestyle.

Guy :

Renting, you “throw” money away on rent. With property you “throw” money away on interest, higher insurance, property tax, regular maintenance, hoa, etc. Sometimes the math works out, sometimes it doesn’t

biteslocalhq :

houses go up in value 4% per year ish, you have to add that in there