People often arrive at the scene when most of the options are gone years back, and they wish they bought at the price that existed back then. Get disappointed and lawyer through the arguments to justify renting a home.
Bought the apartment in 2018, sold in 2024 (close to the bottom of the local-market slump). Still profited ~10% (before fees) compared to buying price. All that principal amortization payed for the downpayment (and some) of my much bigger current apartment.
With age your ability to earn decreases as well.
There are real-world examples of providing affordable housing that allows people to live with dignity, even if they can't afford to buy a home.
How Britain (almost) solved the housing crisis:
If you stay long enough, buying is cheaper. But if you move after just a few years, you'll have mostly paid interests on your mortgage, you had closing tax, your house may even have lost value... So there are many cases it would have been cheaper to rent.
How long you need to stay to make your purchase worthwhile depends where you live.
(In the end, the gamble paid off great - the condo appreciated by about 300k in those 5 years)
As opposed to just flatly stating that owning a home is always good and dismissing any opposition out of hand as “lawyering”?
Here’s my first attempt to lawyer: I don’t want to live in a house. Is owning a house always good for me?
Why wouldn't you want to leave behind wealth for your kids? They are your kids.
so sure, renting vs buying a home in cash will give the cash ownership a leg up. but then it shifts over to people that would love to espouse about the 'time value of money' and leverage, where putting all the cash down is suboptimal vs a mortgage. the % increase of the home value isn't amplified when using cash up front either.
so lets optimize this further, renting vs mortgage with the option to pay it off at any moment is always better. but nobody has that cash, so we're back at square one.
if you HAVE to do a mortgage, then its likely that renting will be a better deal for you for over 10 years straight, before the mortgage pays dividends.
If eat that frog is a think for daily schedule, there is also such a thing for life itself. You just have to get a few things done as early in life as you can. Or you end up living for other people.
How do mortgages pay dividends?
In any case, it's all about opportunity costs, and yields.
To give an extreme example: if the house costs 100x the yearly rent, you are probably better off putting your money in the stock market instead of buying the property, and paying your rent from the returns on the stocks.
For starters, people don't buy a house to live in solely because of the financials around it. They also buy the house because they want it.
When it comes to mortgage vs. buying outright, it just depends. I managed to get a very low interest rate for my primary home; the money I didn't put into the house is busy making quite a bit more than that very low interest rate for me yearly. If I were to rent out the house, I could probably get more for it than what I'm paying in mortgage interest + property taxes, so renting isn't really better (and then I'd be subject to the rent-jacking whims of my landlord). But even if I couldn't, I still just... want this house to be mine. There's value in that to me.
> if you HAVE to do a mortgage, then its likely that renting will be a better deal for you
This is very regionally-dependent. There are places where rents are significantly more expensive than mortgage payments, and places where homes cost so much that most people rent at a fairly reasonable rate in comparison.
let's say you are an investor (crypto and day trading, living at home rent free in your parents' basement: "more tendies mom!")
but alongside your crypto and day trading, you scrape together enough cash to buy a house as an investment. it's an investment, you rent it out and earn rental income. What's rent? let's say it's $10,000 a month. Great! so, in addition to the appreciation of the property over time, you also get $120,000+ a year (the + is because you get some of the money at the beginning and middle of the year and you can pour it into lucrative day trading and crypto)
with me so far? nothing up my sleeve.
now you're feeling flush and you figure with your success, you don't have to live in mom's basement any more. Heck! you own a house, you can live there! and eat your cheetos in the the living room instead of the basement! So, you move in.
If you live in the investment house you own, you no longer get the $120,000+ a year. Why...why...why, wait, it's just like you are paying $10,000 a month rent!
Moral to the story: owning does not save you from paying rent, you are still paying rent, forgoing that income on your investment. Yes, that "it's so obvious everbody knows it" personal finance advice you read in major publications is complete and utter garbage.
don't thank me [tips cap] glad to help. And now you know how i feel sharing the planet with people, "experts" even, who don't have a clue what they are talking about.
What about drawbacks of owning a house? You will spend non-trivial amount of your time, energy and money just to keep it up, keep fixing all things that deteriorate. And everything deteriorates. I mean really non-trivial, count how much your hourly rate is and how much you will waste instead of making some fun good activities, getting more healthy, enjoying life, resting, traveling and so on. Is that really how you want to spend some part of your me-time?
You are also locking yourself down at very specific place which may be a craphole in a decade, without good jobs around etc.
Also it will in normal cases vacuum your savings, degrading quality and fun in life in (at least) initial years after purchase - those are often the best years of one's remaining life.
People tend to look back with rosy glasses on the past, highlighting positives and shrinking negatives, thats basic psychology of each of us. Looking back at period of ownership people mostly look at money made, not all that stress and time with just keeping some property in same state.
Middle grounds are apartments, very little maintenance compared to house&land, much lower costs, but also less privacy and less feeling of 'in my own'.
There is room for each approach, ie right out school locking oneself in specific place may not be the smartest idea. Maybe you will earn some money on sell but maybe also some much better opportunities and better life will be missed due to inflexibility. Freedom is invaluable, properties ownership tends to take some of it away.
To up keep your home! You also pretty much up keep your rented home too. And at the end you spend to maintain other people's home.
>>Is that really how you want to spend some part of your me-time?
Most of the times its not that bad, you talk like you are on-call 24x7 throughout the year.
>>You are also locking yourself down at very specific place which may be a craphole in a decade, without good jobs around etc.
That's called stability, and that brings wealth and happiness. Honestly people look down upon these things, people use wrong words(lifer, coaster etc) to put down stability. In reality stability, with a predictable schedule is one of the best things that you do to your health, and overall life stability/happiness.
>>Also it will in normal cases vacuum your savings, degrading quality and fun in life in (at least) initial years after purchase - those are often the best years of one's remaining life.
This is mostly an assumption, in my experience the exact opposite is true.
>>People tend to look back with rosy glasses on the past, highlighting positives and shrinking negatives, thats basic psychology of each of us. Looking back at period of ownership people mostly look at money made, not all that stress and time with just keeping some property in same state.
Its always a bad idea to make any investment today, and you feel deep regret to have not made an investment 20 years back. Im not talking about real estate in specific, but even things like education, or exercise, look pointless and something you can do without today, but you wish you had done more or atleast started decades back.
>>Middle grounds are apartments, very little maintenance compared to house&land, much lower costs, but also less privacy and less feeling of 'in my own'.
You don't even own walls in a apartment, its like the worst of all the worlds.
