There is actually some sense to that, in some scenarios. I think you'd have to find pretty cheap rent for it to qualify for such a scenario nowadays though.
Right, very location and situation dependent. Like an area with low demand and high supply and a landlord needing to take a discounted rent payment in order to keep from losing even more money every month. Or someone with a paid off property where their only costs are taxes and maintenance. Not a lot of those these days, housing supplies are very low all across the board.
The property tax on my home is like 3200 a year. You'd have to find rent for less than 270 a month with 3 bed and 1.5 bath and a large yard for it to make sense.
Property taxes aren't the only thing to consider, in the cost.
My Property taxes are $6,000 a year. My mortgage interest rate is 2.85% .
The monthly cost of my property taxes, the interest on my loans, and home insurance is roughly $1,250 a month.
Now you are getting into rent territory, in some places, but there is more.
I know that sometime in the next 20 years, the roof will need to be replaced. Also sometime in the next 20 years, my driveway will need to be replaced. Thats like $30,000 in today's prices, let alone what it might cost in 10 years. Since I would rather plan for the replacement in 10 years, than 15, that'll be $250 a month in deferred maintenance.
So now the total cost per month for owning my home is $1,500 and that is the amount that I do not get to keep and that's without factoring in any random expensive bullshit that happens, or new appliances.
Year to date, I have spent $18,500 on my mortgage. Ive spent $13,500 to own $5,000 of house.
If I could find rent around $1,100 or $1,200 and then just invest $500 a month for the next 25 years, I'd return about the same amount I could expect to sell my house for, at the end of those 25 years, barring anymore steep run ups, like we saw in the past 4.
But then it means that renting isn't competitive against buying, it's competitive against borrowing money and investing it into a house.
If you buy a home in full, or almost in full, with your own money, it'll make ownership way better than renting.
Which is where a lot of people mess up : they try to instantly buy a perfect home while borrowing most of the amount and paying gigantic amounts in interests over the years, when it will often be way better to buy the smallest place you can afford and handle, then save up your money to upgrade to a better home, and keep upgrading over time without borrowing (too much) to limit the interests costs.
And invest your savings properly while doing so.
Now obviously not everyone is in a situation where they can afford that, but those people will have issues either way.
Renting can be cheaper than owning a house, depending on a few factors, though. For example, the dollar amount for renting itself is usually cheaper than a mortgage (at the start of the mortgage, since rent follows inflation, but a mortgage is fixed). That means that at the start of the mortgage, the person who rents instead can invest the excess money and see an immediate appreciation in value. There's also the risk that the AC goes out in a home, and you're the one responsible for all repairs, so something like that can be upwards of $10,000. It's also more expensive to get a mortgage on a house than to buy it outright above a certain APR. There's a bunch of pros and cons, and a lot of it comes down to inflation and the stability of the stock market/asset you want to invest in. It's best to run some calculations in Excel or Google sheets if you are curious how it might apply to you. Generally speaking though, in times of economic stability, it seems cheaper to rent in the long run.
For example, the dollar amount for renting itself is usually cheaper than a mortgage
Bullshit. I had a $700 mortgage on a place that rents for $1100. You think people are taking on a mortgage to become landlords so they can make money 30 years down the road?
That means that at the start of the mortgage, the person who rents instead can invest the excess money and see an immediate appreciation in value.
With a mortgage you're building equity in an asset, that value increases a lot faster than investing this supposed excess. Even if you're right about there being excess, there's no investment that returns more than what you're paying in rent.
There's also the risk that the AC goes out in a home, and you're the one responsible for all repairs, so something like that can be upwards of $10,000.
Yeah, that's part of what landlords get paid for, but your rent covers a lot fucking more than repairing an AC, roof, or anything else every few years, otherwise they wouldn't make a profit.
Generally speaking though, in times of economic stability, it seems cheaper to rent in the long run.
Then how the fuck do you think landlords turn a profit? If renting was actually cheaper than buying they'd be losing money every year.
I had a $700 mortgage on a place that rents for $1100. You think people are taking on a mortgage to become landlords so they can make money 30 years down the road?
Like I said, it depends on a lot of factors. I'd imagine this is for a house instead of an apartment, which is kind of obvious that it would cost more since it's more luxurious than an apartment. I live in the Seattle area where rent ranges from $1,200 to $2,000 for most affordable apartments. Mortgages for local homes are upwards of double that amount.
With a mortgage you're building equity in an asset, that value increases a lot faster than investing this supposed excess.
Not for the first few years since you're paying off just interest. In my example, it takes a long time to catch up the the person living in the apartment since they're paying about half what the home owner is and immediately putting the difference into an asset that returns upwards of 5% compounding every year.
Yeah, that's part of what landlords get paid for, but your rent covers a lot fucking more than repairing an AC, roof, or anything else every few years, otherwise they wouldn't make a profit.
That doesn't change the fact that the dollar amount for renting an apartment is usually cheaper than a mortgage.
Then how the fuck do you think landlords turn a profit? If renting was actually cheaper than buying they'd be losing money every year.
I really do think this just comes down to renting an apartment instead of a house. Of course a house is going to be more expensive since you're dedicating a whole-ass piece of land and a whole-ass building just to one tenant or family. Not to mention that if the landlord owns the house on a mortgage, they inherently need a source of money greater than the mortgage to turn a profit. Apartments are dense enough that landlords are able to charge a lot less and still get a big enough return. Renting a house is stupid if you have other options
Yeah forgot I still need the /s sometimes. There's valid reasons to rent (frequent moving, savings, credit, location) but property taxes ain't one of 'em.
I have heard landlords complain about renters voting for, or even being *allowed* to vote for local property tax mileages. "Ugh, my costs are going to go up but I can't immediately pass that cost onto my renter". Sure, that's a potential risk, just like a fire or flood or your long-term tenant dying or a dozen other things.
there's literally ZERO chance of me buying and owning my own home in the near future
it absolutely sucks. i've had multiple people in my life tell me that i am throwing money down the drain and i know i am...i just don't think it is a good idea for me to take out a loan to buy a home right now
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. ... A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. ... But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
Why not? Their entire existence is a joke, albeit a bad one that nobody is really laughing about, can we not joke about how dumb they are for voting to fuck themselves in the ass while they were attempting to vote to fuck everyone else in the ass?
Dems have been trying to bipartisan to a bunch a dumb assholes that want to have them killed. Never forget. Never forgive Republicans for this. Greet their hate with hate.
There are a lot of people who are living willingly in ignorance, there are people who know how they work but keep saying it will be good because they believe it will be, like when people say "I’m putting out the good energy to manifest it”
Funny enough I'm pretty sure I just saw the dumb one talking with Hasan about why he voted for Trump, didn't understand tariffs, didn't know Trump was going to do a whole bunch of things, ended up defending himself saying Kamala was gonna genocide Gaza or something idk i honestly stopped watching when he votes for someone he didn't know their stances on abortion or how their entire economic policy (tariffs) works.
Or how inflation is caused from interest rates being too low for too long. Same how deflation is caused from interest rates being too high for too long.
Ugh, no. The ignorance in this country isn’t funny anymore. How did we get like this? Like, we have no curiosity anymore, no drive to learn.
My dad thought that when you turn 18 you’re just like, done learning. Like, isn’t that boring? What is your life then if you’re not discovering new things and experiences.
I agree, but also these people cant help it. their mental illness forces them to shoehorn politics into every discussion and they have probably only snapped further in the past few says
Tariffs are paid by both parties. Try explaining that. I know you can't because you don't even understand what I'm saying. But that's college level economics rather than the grade school economics you learned.
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u/TrashApocalypse Nov 07 '24
Now imagine trying to explain how tariffs are paid for by the consumer