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So the fiduciary rule got tossed yesterday
Can anyone help me understand this better?
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Disagree. Agree on the lower upfront cost point, but as a renter, you’re also covering the landlord’s expected costs + profit margin. As a homeowner, you have to deal with one-off costs, but provided you have a fixed rate, your monthly payments are mostly stable for 30 years. Even if you don’t sell your home for a big profit, ownership is a buffer against rent increases, and in this inflationary environment, that’s needed more than ever. I’m about to drop an offer on the condo I’m renting right now.
VP, you do realize that those are pass-thru costs that the landlord passes on to the tenant, right?
That’s basic Renting 101 that every tenant should know. Yes, most renters are also required to have renters insurance, but they also pay a portion of the landlord’s insurance in their rent as well.
Rent will go way up over the course of 30 years.
Exactly. Buying is absolutely more expensive in the immediate term, often more expensive in the short (5 year) term, but cheaper over the long term, especially when you factor rent increases.
Considering that housing is usually your biggest ongoing cost, it's nice to lock in the amount rather than see it increase over time. However, if you haven't settled on city or town to live long-term, I think renting could make sense if you never want to own a property there.
The only reason I haven’t bought yet is because I wasn’t sure I wanted to stay where I was previously for the long run. Now that I’m where I want to be, I’m actively looking to buy.
Disagree.
Your house gets paid off while you are in working age, and will be paid off by the time you reach retirement. Sure, you’ll have to pay property taxes and do maintenance but paying marketprice rent in retirement will be tough for most people.
I would say this is the truth right now in a lot of areas.
However, when I bought my condo during the pandemic, it was a different story.
When I moved out of my apartment and into my condo, I saved $400-500/month over renting, when you do a true apples to apples comparison (dwelling, carport and water/sewage and garbage service).
3.5 years later, the difference has gone up to roughly $1k/month that I’m saving by owning my condo over renting the same apartment I was until February 2021.
The responses to this subject are always hilarious. They are all based on feelings when it’s a pure math problem.
No, you’re missing my entire point. The responses to this question are based on feelings, but those feelings aren’t the ones you are describing. They are using feelings to avoid doing the math. 90% of them aren’t going “I don’t want the hassle of owning and will knowingly pay more to rent or will rent because I will probably move in 2 years.” They are using feelings to argue their preferred method is actually the better personal finance decision, even when it’s not.
“Rent will go way up over 30 year.” Is an example just from this thread. That means nothing by itself. Are you investing the difference between rent and owning? What are the taxes? Etc. This is not the feelings you’re talking about, but it’s what I’m talking about. They are essentially cheering for their “team”, which is probably the track (rent or buy) they have always done.
Yes, feelings enter into it, but sane rational feelings after the math gets done. Not just rules of thumb you cheer for blindly.
Disagree. House hacking is the way to go. I bought a 3 bedroom condo and got two roommates, pay far less on housing (including maintenance costs) than when I was renting.
Disagree, because it ignores a third option. Shared ownership in a house, with several other home owners.
Not for the faint of heart, but great for those who want a stable location that is, to an extent. insulated from rising rents. Rising home prices mean that your investment is protected, and depending on the Share purchase agreement, means that you can sell your share if you must relocate. This type of home purchase requires the right mix of co-owners and there are pros and cons to shared ownership, but to me, it appears to be the wave of the future for home ownership when single owner options are off the table.
https://wellthycapital.com/property-ownership-with-multiple-owners/