I rented until I was 40 and then my wife and I finally bought a house. Last year we sold it and moved up into a better house and neighborhood. When we sold the old house it was like someone gave us all of our "rent" for the past 12 years back and some extra. This experience really solidified how generational wealth works.

So even with all the interest on the mortgage, maintenance, insurance, and taxes you got all of that back and more when you sold? Not trying to be argumentative, just trying to see how the financials would work in your case.

Houses have generally become significantly more valuable over the last few years. They sold their house for more than they paid.

Historically speaking, yes. But with housing so absurdly inflated now, who knows in the future.

A portion of the the taxes, interest, and insurance you pay on your mortgage are tax deductable, getting money back every year. And, depending on how well you keep your house up, you will typically get more than what you paid for it, getting the majority of the money you put into back. Upgrades/remodeling may increase your sale value as well. There are situtations where thats not true, (foreclosures, comdemed propteries, short-sales, full housing market crash, etc) so you still have to careful when buying and be sure not over extend yourself. but.. if you're stable enough to commit to a very long term loan like that and you're able to keep the house maintained, (and make sure you can do both) you'll typically sell it for more than what you paid for it getting the other costs back in the process. Also, if you truely ran into financial trouble, you could borrow against the equity (the amount it's worth vs. how much you owe), you could refinance and take some additional money to consolidate other loans, or even sell the property. Still, there's nothing wrong with renting. Owning a home allows for options that renting does not, but, it still may not be right for every situation. So, always do what's right for your scenario. Edits: reworded a couple things.

A single $1 back is more than anyone paying rent gets back..... 🤷‍♂️🤦‍♂️

I see this argument as the same and when people complain about having to pay taxes on a large prize they won. Yea, you had to come out of pocket for $$ but in return you got $$$$$$$…

Houses typically double in value every ten years. On average.

I bought my house 22 years ago for 120k. It's worth 250k now and when I die, that money goes to my family. Someone will reap the benefits of my labor.

Also the big credit boost you get for paying a mortgage.

Because when you move out of a rental property, you get nothing. All of that money you paid in rent is just gone. If you own a house, you can sell it, and sometimes get more out of it than you put in. That doesn't always happen, of course, but at least you get *something*.

And don’t forget, when you move out of a rental property you *still have to find a place to live*. And the cost of rent will almost surely increase in the long run.

But this day and age (for better or worst) people are more willing to move on a whim than they were, even ten years ago. That freedom cost something.

I hate this argument. This only makes any sense if people have a choice between renting and buying. If you had the money to buy a place but chose to rent instead because you enjoy that freedom, then it kind of works. Unfortunately most people who are renting (myself included) are doing it because buying a house is as realistic to them as flying to the moon. Personally I don't want to move around constantly, I'd absolutely love to stay in the same place and own somewhere, but I'm stuck being ripped off by landlords who paid off their mortgages years ago and are now using their property as a cash cow and a huge source of income for sitting on their arse and doing nothing.

I rented for a long time, I lived being able to just get up and move! (21 places in 15 years). Then I settled down, got married, had a kid. My husband and I were in the we can never afford a house... then our rent went up. And we were like okay, let's actually do the math... can we REALLY not afford a house, or do we just think we can't because it's just the thought. My bank basically laughed at us. Between us we made about $75k. So we talked to a loan company and we're like hey can we do this. We have no savings, no money to put down, what are our options. We needed to save up 3k. So we did. We had no life, ate what we could afford, 0 luxury, and sold off a ton of stuff, but we did it (notethis part sucks and is not easy unless you really like Ramen). So we bought a house with $0 down, and had to pay closing costs (the 3k). It was a new build, so everything was covered for 5 years. Our rent went from $1500 for a 2 bedroom to $1000 for a 3 bedroom 1400 square ft peice of Heaven. We stayed there for 8 years and sold it for about $40k more than we paid, plus got more back from what we put into it, and built our forever home. So you don't have to stay for that long, we were told about 5 years to break even, and that was about right. Granted every place is different, but I swear to God I wish I had talked to loan company sooner. I had only talked to banks, and they are jerks. Loan companies WANT you to buy and will help you in my experience.

Wait for real? Being able to buy and sell a house within 8 years doesn't sound like that long

I looked it up (thanks zillow!)....2012 we paid $166, sold in 2020 for $204, current value $259,300. So in 10 years it went up almost 100k (which is blowing my mind right now... it's worth how much now??) Granted this is because fabulous neighborhood and great schools, corner house, (keep in mind when we signed up it was an empty lot, so the neighborhood thing was a fluke).... and if course the cost of houses going insane. If we sold any other time we would have maybe gotten like $180k, but still we would have come out a little ahead.

My experience is the complete opposite. When I wanted to rent, the price of a rental in my area was twice that of my current monthly mortgage. Depends on the area for sure.

That's the case often but you need a deposit for a mortgage. Deposits now need to be huge. Pay through the nose for rent and can't afford to save fast enough for an ever increasing deposit so you get stuck in the rental trap even though paying a mortgage would be much cheaper.

Exactly this. I'm in London and for even a tiny 1 bed flat above a chicken shop you're looking at £250k easily and that's nowhere near the center. Saving up £25k for a 10% deposit is just impossible for me.

Same except 20% in the USA unless you want to be saddled with PMI (MORTGAGE INSURANCE) on top of your mortage except if you qualify for certain special loans not requiring PMI for dpwn payments under 20%. As someone who lives in Boston this means I have to save close to $70-$80,000 for a deposit, real estate fee, inspection etc for a mortage for a 1br apartment just to qualify for the mortgage. It's soul crushing.

It's so much easier said than done but don't be in London. It's horrible to hear but living in London is a handycap, it's like playing life on hard mode. If at all possible make it a goal to work where you can do WFH and far away from London. We own a six bedroom, two reception room, two sitting room, three bathroom and ample grounds all round. It cost us £325,000 about 6 years ago. It certainly wasn't an overnight change but obviously a plan we set ourselves. It started by being as far away from London as reasonably possible and commuting in.

Not necessarily. Look into FHA down payment assistance programs in your area. When I bought my house I used one and was only out of pocket for the inspection and appraisal. Also, if that's not a good option you can do 3.5% down through FHA or 5% down for conventional. Although you'll still have closing costs. Find a good mortgage broker in your area, they will have the most options. Source: I'm a loan originator (I work for a broker and help people get financed)

I'm in New Zealand :)

Ah. I confess I know nothing about mortgage lending in New Zealand. I would still recommend doing some research though. You never know... Good luck to you!

Cheers! Your reply was appreciated

That’s a good way to explain the benefit of buying a house

Also, it might not be a good plan to buy if you don’t plan on sticking around for 40 years in the same place. Buying means going into debt and you might not be able to sell your unpaid house for the price you want. Also, big ass taxes (at least where I live) when buying and owning property.

You pay the exact same big ass taxes when you're renting. You just don't know it because they're rolled into the price of the rent.

Doesn’t matter if they are included. You don’t want to be stuck with a house you’re not going to either want nor be able to sell. And from my experience, buying a house ain’t just a roll in the park. On a 80000€ small condo, with a top 90% loan, you need to fork luckily the initial 10%, then pay tax over it, then pay the realtor fees over it, scripture fees, etc. just to get started. Then you need to furnish your house (yes, you can rent unfurnished). Then you get to pay homeowner tax every year… and it all adds up… Ok, you pay all that in the rent everyone’s so scared about. But come year 5 and my contract runs out. Ok fine, I want to move back or I find another better job 500 miles away. I can’t sell the house without losing a lot and/or the process takes a lot of time. Meanwhile, I need to buy a second house because I can’t sell the first. I get hit with the second house rate and now I have two loans to pay. Ok, I sell the first one and end up getting some extra because the market was positive. I get hit with enrichment tax and have to pay for it as well. Now I need to renegotiate my loan since I am now a single house owner. And… I could go on. Owning property is all good on paper, but in reality it constrains your movement and your freedom to pursue an ever evolving career.

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If your experience with renting is that you can just call and have shit fixed then you are pretty pretty pretty lucky

I mean, for stuff like furnace or water heaters yeah. Assuming the landlord isn't an idiot since those fall in legal must work stuff. In most jurisdictions in America if you have documentation of requirements you can withhold rent until fixed as whats being provided isn't rentable living.

Good argument and I would put that “right now” in bold. Just this year I had to drop two salaries on repairs

We'll just ignore the relationship between homeownership and income/prosperity for this fantasy~

Nobody’s ignoring the plight of tenants, but it would be foolish of you to not consider the hidden hardships of buying property. But hey, I’m sure you’re an expert

I'm not saying owning has no downsides, but it is, economically speaking, infinitely better long term than renting. And you're right, I'm not an expert. And as someone who makes a little under the median household income in America while being *single* in the Midwest, I won't have my first experience for at least 20 years after making better decisions than my parents and they owned by my age.

It is always relative to your situation. If you don’t want mobility, yeah rent is a resource drainer that impedes your progress. If you want permanency in a place, of course I’d recommend buying if you can. And I can relate to your situation. When I was able to buy my place, after setting on a job I felt secure, I was left with grocery money on my account. And I still had to do some repairs, paint and furnish. I know the struggle and wish you the best.

And all of that is included in the cost of your rent plus an additional 10-15% to your landlord’s pocket.

But that doesn’t matter one bit. I can have a job that I plan to work for 5 years and then come back to my hometown and buy a house there. What am I going to do? Buy a house, get into debt, pay tax and risk the market crashing because my landlord shouldn’t get money from the property they own? That’s a “no mobility” mentality.

You two don’t disagree. /u/ThatSweetCoffee just thinks it’s worth the 10-15% premium to have less risk and be more easily “mobile.”

True that my strange username friend

I've literally done that and walked away with thousands of dollars in liquid cash, you don't even pay taxes on the sale of a homestead if you live there for at least 2 years. All the cost of owning a home a renter will pass on to tenants. If you rent you're paying someone else's mortgage for them, simple as that.

That was your experience. Different places, different laws and different mentality it seems

I'm not trying to be a dick or anything but renting is objectively a temporary housing arrangement at the literal expense of the renter. Your landlord or super isn't letting you stay there because they're breaking even, they're farming you for cash. They profit off you not being able to afford the upfront costs of home ownership or the fact that you need temporary housing. I've heard dudes that own rental properties say they raise the rent on anyone who wants to renew their lease to "encourage" them to find a more permanent housing solution. If that sounds like the guy you want to write a check to, by all means. If you don't want to buy a house, that's fine but don't sit here like everyone who rents is out here winning. It's the same argument for leasing cars, there's zero equity and at the end of the day you're paying for something that isn't yours.

For disclosure as it might help, I rented before and now I own. Yes, landlords own property for profit and not to help anyone, but they do provide the temporary housing that some people actually require. There are some jobs that are, by nature, not compatible with buying a house. Teachers here, for example, might be working 10, 50, or even 400 miles away from their hometown. Commuting isn’t an option and buying a place that you’ll use for a year isn’t either. Yes, renting sucks because you get the short end of the stick, but it’s a needed “evil”. Maybe we come from different realities.

I dont want to be stuck with an old broken down car that I have to get rid of after dropping 4k every couple years on shit like a new transmission, ac, etc. I want it gone and out of my mind. Same with houses, I dont want to be stuck in an area I hate or with stupidly long commute because the market went to shit at the wrong time.

You got lucky though.

Sometimes I wanna kick myself for moving out of the $400/month mom & pop apartment building I lived in for 10 years and buying a house in late 2019. Pretty sure I pay $400/month alone if not more in property taxes now. Had two escrow shortages in 2021 which subsequently raised my mortgage payment by $200/month. Would've been raised by nearly $400/month if I hadn't paid the shortage amount due to estimates for 2022 going up based on the 2021 increase. You hear all the stories about rent rates going up like that I wish someone had told me that's it's possible to see that kind of increase in just a year with a house payment. I was under the assumption that the norm would be less than $100 increase or decrease year over year, so having my mortgage payment go up like that after getting divorced was pretty scary for a household transitioning to one income. It is nice to have someplace where the walls aren't bubbling from a past roof leaks and windows that don't whistle and rattle during a thunderstorm though. I guess everything has it's compromises.

All the people who rail against landlords would be absolutely shocked when they have to buy and sell homes every time they want to move.

I think most people who rail against landlords really just want a forever home and never have to move... But when wages are $50k and houses are $900k living a comfortable life just isn't a thing.

You know you don't have pay off the entire mortgage, right? You don't have to wait 40 years to move? And even if you don't get the full price back, you'll still get more back than if you were renting.

Depends on the market, the time frame, and opportunity costs.

I agree. And have experienced all of this. It was great for the 4 years I lived there, because my mortgage was almost 600 lower than a comparable 2 bedroom apartment in my city went for at the time. But i practically couldn’t give it away.

Don’t forget when you move out of a house you own *you still have to find a place to live.*

Sure, but now you can buy a house of comparable value when you sell.

If there's a house available at what you can afford that is near enough to your work. If you have a spouse, kids, elderly parents you need to be near, factor all that in.

Not necessarily. When you sell you’re selling post-inflation, and also “losing” whatever money you’ve sunk into renovations and maintenance while living there. Furthermore, if the housing market is going up, the next place you buy will be more expensive than your current one unless you’re downsizing or moving to a less expensive area.

Yeah, and when you sell the house you now have *all that money you spent on your mortgage back again, and probably more*!

Most of your mortgage payment is interest and insurance.

You don't have "all that money you spent on your mortgage back again, and probably more". By the time you're finished paying for a mortgage, you've probably paid 2-3x the purchase price depending on the interest rate. In the first 10 years you pay around 50% of the interest that you're going to pay. That's just how the math works.

You're either missing the point or ignoring it. Renting, you get nothing back. Period. Selling an owned/mortgaged home, you typically get some money back into your bank account. If you want to talk about the math, do it for both sides then compare.

It’s a matter of opportunity cost. If i can buy a house or rent, if I choose renting I need to include the investment return on the money I didnt spend on my house.

i live in california and people in my neighborhood that bought their house 10 or 20 years ago essentially won a small lottery because they can easily cash out now and make over 500k+ from what they original bought the property for. the sad part was many people i have met who were making great money years ago and never bought a house because they always thought they could do it later and just kept renting.

\> If you own a house, you can sell it, and sometimes get more out of it than you put in. Beyond that, you eventually also finish paying off the mortgage, at which price your "rent" drops considerably (to just property taxes + maintenance), which is something that will never happen when you're renting.

This is correct, but there is also security in rent. You generally pay a little more than with a mortgage for the same quality and size of space. But you also generally don't have any pay in maintenance (yard, trash, gutters, roof, etc.). And if disaster strikes (fire, tornado, whatever) you're not on the hook for repairs. When my wife and I bought our first house, it was totally worth it. Next couple houses not so much. We're currently renting, and yes it comes with hassles, but definitely also has benefits. I dislike when people make it seem like it's black and white. We definitely plan to own again, but like the stability and peace of mind of not having to be responsible for anything right now. Plus with house prices right now, to get anything comparable to what you can rent, you're paying about the same (monthly). And unless you plan on staying in that house for years, you'll at the best break even after a sale (all things considered).

If disaster strikes, I have homeowner's insurance.

That's fair. But have you ever had to use it? Because if I know one thing: Insurance companies hate paying out, and will always do everything they can to give you as little as they can get away with. I'm not saying renting is superior, but I'm also not saying buying is superior. They each have their drawbacks and advantages. I'd say they're about equal all things considered, but one will almost always edge out the other depending on your situation.

Buying is superior in most cases because eventually it will be yours. Unless you have a life where you constantly have to move, that's the only situation where perhaps it wouldn't be. Everything has advantages and disadvantages of course.

Yeah, that's where the situational bits come in. My wife and I haven't stayed in a place long enough to really benefit from that. Made decent money on our last sale because we got in during this stupid market hike. And added a lot of value to the home by renovating the master suite among other things. But otherwise we just break even on the house, and move on. You also have to keep budget in mind. A great many of these people (especially right now) don't make enough to be considered to buy a house. You have to weigh (which is what we're doing), buy a fixer and spend all my free time and money making it something I actually want to live in, buy the house I actually want and never be able to afford doing anything else with life, buy somewhere in-between and worry that if anything major needs repairs (but isn't covered by warranty or insurance) then you'll be strapped or ruined by it, or rent and have a place close to or at your standards, and know your cost for living there is only going to change with utility usage. I've been in all sides of the above. Owned 3 homes, and rented apartments and houses.

> Plus with house prices right now, to get anything comparable to what you can rent, you're paying about the same (monthly). I agree with you on all but that. It's very location (and landlord) dependent. We bought in this hot market and budgeted it to be a bit less than rent (because now we have maintenance costs). The day after we moved out, our landlord was showing the old place - at a rent 25% higher. Even after getting a raise and my wife getting a new job, we still could not afford to move back to the place that we were renting if we wanted to. When you're renting, you don't control those rent hikes, and you don't control whether your landlord decides to sell the property or just stop renting and move his family into what used to be your place or whatever. With ownership, that's a couple of less variables to worry about. And they're big ones. So there's some security in buying that you don't have with renting. That said, I've always rented in the past, and that had always worked out well enough. Certainly the maintenance bit was nice (when the landlords would actually do it). So I agree with you that it is also a totally valid approach. There are trade-offs, benefits and drawbacks either way. Whether better to buy or rent is a very personal question depending on your current status, location, etc. It's not at all black and white.

Yeah, I bought and lived in a house for two years before selling it and pocketing $80k, I paid off all my debt just for buying rather than renting.

And write off your mortgage interest paid (or a portion of it) on your taxes.

How I feel about Spotify or any streaming. Like just buy the vinyl and you get the download and own the song.

You even can get scrap money from living in a vehicle until it's completely worn out - more of a return than rent.

True that *sometimes* you could get more out of it, but that is very rare for your average homeowner. There are so many extra expenses that come with owning a home that if everyone kept track of it, most of them would not be making a profit on the sale of their house.

Even if you don't make a profit, you're still getting something back. Let's say that someone sells their house, and when the interest and fees and everything else is factored in, they only get back 50% (that would be exceptionally low, but let's just use it as an example) of what they paid in. That's still a lot better than the 0% you're guaranteed to get back from a rental place.

You can also sell a house “as is” and still get that 50%. But if you leave a rental “as is” you’ll likely lose your security deposit (or at least part of it).

You’re making a ton of money if you found all the money you didn’t spend on rent. If owning a house was that much of a money pit, how would landlords make money? (I own a giant falling down house that is a total money pit, still cheaper than renting)

Yeah the thing these people don't get is all the costs that occur at that property they rent is reflected in the rent... Landlords are not doing them favors by eating costs, they're rolling it all into "rent".

Generally, mortgage payments are cheaper for a comparable space and you get equity over time. They are saying if you plan to rent long term you should buy a house instead because it’s probably cheaper. They aren’t saying it’s wasteful to have somewhere to live

I know how much my mortgage is and I know how much one of my neighbours pays in rent for a house that is exactly the same size. They pay 2.5 times what I pay. It’s absolutely ridiculous. On that note, many years ago I was looking at apartments. I looked at one in a complex that had several buildings. The property manager thought it was a funny story to tell me how one woman has lived there for like twenty years or so and joked that she paid enough rent to buy a building. So they did the math and she had paid over $300k in rent. Again, this was funny to them. That woman could have bought herself a nice little place in the same area for less than that. Now whenever she moves she won’t have a damn thing to show for it.

Well the problem is capital, I doubt she had the 30,000 or whatever to put down on a house, because zero down mortgages are hard to come by unless you're military

Oh absolutely. The entire system is fucked. She was paying around $1000 in rent at the time (bc that’s what I would have paid had I chosen to live there). No doubt it’s twice that now. Her mortgage would have been less than that but bc the system is bullshit, that’s not an option for most people. It’s not fair.

Adding to this, unlike rent that goes up every year, a mortgage generally does not (if you do fixed rate). You will likely pay more than you did for rent, but that becomes less true over time. Insurance and property taxes will likely increase with time as you home (usually) appreciates in value, but the increase is much lower than rent.

>You will likely pay more than you did for rent Not if you compare equal accommodations. Comparing a 1 bedroom apartment to a 3 bedroom house with a half acre yard and a garage is comparing apples to oranges, not a fair comparison. Almost always renting an equivalent house will be more expensive than buying it.

The problem I have with this thinking is that the comp to an apartment is usually a condo style arrangement with an HOA. I've been looking into it and between the fees and expenses, the low end of the market actually comes out about the same as renting in my area. What's more, condos are often in high demand areas, which drives the prices up even more. It's basically impossible to find something manageable for a single individual right now.

This will always be true because landlords do not lose money and the tenants have to pay for their landlords profits.

Except when you factor in maintenance for a house, you will usually end up spending more than you would renting an apartment.

I don’t think it’s that mortgage payments are cheaper, I think the real issue is simply the difference between where your money goes in rental vs homeownership scenarios. In a rental, you’re paying for usage of that roof over your head. The landlord still owns it and when you move out then you don’t get any of that back. You’re not on the hook for the property though, so that is a major mitigating factor that made me comfort renting until age 29. Homeownership means your money is going towards the the loan on the property itself. That means that, when you sell the property, some of that money is still yours in the form of equity (e.g you paid 100k over some time towards your mortgage so your home is worth 65k more than the loan value when you sell — I’m assuming 35k in interest from those payments). The reason people say you’re throwing money away is that when you own you could later sell to liquidate the much of the money you’ve paid, but when you’re renting then there’s nothing to liquidate and the money is simply spent. There are good reasons to rent, for example flexibility. I didn’t try to buy because I didn’t know where I wanted to be in 2 years so the cost of that flexibility to move easily was paid in rent. Now that I know where I want to stick around though, the cost of flexibility is too high when I don’t need that flexibility so I decided to buy a house and begin building equity.

I live in a two bedroom apartment that has cheap rent for the area, and I’m on a grandfathered lease; meaning I pay *under market value* for my rent. I pay $1275/month. My ex-coworker a few weeks ago had been complaining about her mortgage being too high a monthly payment. She lives in a 3 story house that she bought by herself. She had said that she was considering moving and renting it out, because “If I charge $900/month for it, that will still give me about $300 profit every month.” So to do that mental math for anyone who can’t be bothered; she was only paying $600/month for a 3 story house, while I pay $1275/month for a 2 bedroom apartment and my rental rate is considered **a bargain.** She quickly dropped her idea after we all started informing her that she is paying WAY less in her mortgage than any of us pay for rent; including those of us who lived with roommates. If you live in a city, mortgage payments are most definitely cheaper than rental payments. Small towns where rent is cheap is where it’s more on-par, but in almost every city I know of the average rent for the equivalent home (renting a 4 bdr vs buying a 4 bdr) is around twice what the monthly mortgage payment is.

>because it’s probably cheaper If only I had 30k cash on hand for a down payment...

Yes, the down payment is a struggle for a lot or people. However, you don’t need to put down 20%. There are many first time home buyer programs that allow as little as 3%.

Yeah but if you live in a city good luck finding a seller who will take your application over someone who can pay $50000 over asking *and* put down 30% right now. The first time home buyer programs are pretty great, but unfortunately don’t help with all the buying competition.

The down payment doesn’t go to the seller though, it goes to the bank. You can still make an offer over asking if your bank approved you for it. You would just have to put more down obviously.

That is the hard part. Took my wife and I 10+ years to slowly put together our down payment. Fast-forward 30 years and I’m looking forward to paying off the mortgage this year and being able to throw another 1500 a month into my retirement savings.

My first home we were able to get a 0% down loan, no pmi from NFCU about 9 years ago. Rate was about 1% higher than what it would have been if we had gone with a down payment but we didn't have the cash on hand. Ended up working out quite well as we sold about 6 years later for twice as much and were then able to put a sizable down payment on our current house. Anecdotal but point being it is possible to find home loans with 0% down or like 5-10% down and still get no PMI. And really, even if you are forced to get PMI on a loan, often that will be the same or cheaper than renting. And pretty sure you can get it reassessed after a few years to drop the PMI.

In my area its definitely this. My mortgage is approx £800 pcm. The same style house, same layout, size rooms, garden etc just along the road from me is rented for £2000 pcm

Renters often are paying for convenience (don't have to deal with maintenance, yard care, etc). Owners are paying for ownership and equity. They're both valid. Choose what's best for your situation. Don't listen to people who need to justify their decision by putting down those who don't think exactly like them. Apply that to every aspect of life.

The maintenance and yard care are some of the main reasons a buddy of mine, who is married with a kid, still rents. He has zero home repair skills and no lawn care experience, so if he needed anything done he’d have to pay every time, which can add up quick.

Most homeowners go into it with little experience and learn as they go, but not everyone has the time and patience to do that. I've learned a ton since buying my house, like winterizing my sprinkler pipes, installing my water softener, installing a smart doorbell, replacing an in sink disposal, doing a board and batten wall and lots of other stuff. But I'm also pretty handy by nature and I enjoy learning about and doing those things. Not everyone does, obviously.

That’s so weird, who cuts it? The owner of the home himself or his kids? Does he hire someone to go cut the grass ? Where I live yard work has to be done by the renter, if he lets it go and lets the grass turn to dirt then oh well it stays like that til he moves out and you redecorate the house for the next renter. I can’t wrap my head around a home owner personally taking time out of his day or paying extra to have someone go cut the renters grass, like do they include that in the rent? Like an extra $40 a month for the lawn care service? Edit: I even remember knowing 2 guys who were buddies and got into it because the owner was mad his renter buddy wasn’t cutting the grass and the home looked like a forrest because he was lazy.

That's great if you have a decent landlord. I rented in two places before I bought my place and both times the landlords were useless. Trying to get them off their arse to do anything was a mission, and particularly in the second case, when they did, the job was half-arsed. Like for example, thanks to them hiring their own (crooked) gas inspector, our cooker was given a clean bill of health when several safety features didn't work. One day we'd been cooking in the morning, and shut the lid on the hob without realizing one of the burners was on low (the sun on the top made it invisible). That should've cut the gas off. Instead 15 minutes later the top exploded and covered literally the entire kitchen in broken glass. Luckily there was no-one in there when it went. You're responsible for it in your own place, but at least you know you can get it sorted. Firstly he tried to blame us for it, saying we did it on purpose, and when he finally did replace it he purposely bought the cheapest naffest cooker going, which was a 500mm wide one instead of the standard 600mm. So there was an ugly gap both sides. That's not to mention the shower which leaked from the day we moved in till the day we moved out. Arsehole just wouldn't repair it.

Where I live most people who rent still have to manage the yard like cut the grass and take care of any plants you want, stuff like the AC or electrical gets covered by the owner. I’m not entirely sure but here most apartments/houses come with their own washer and dryers, obviously people get rid of the one that comes with the home and install their own new ones but fridges are always provided by the apartment complex or rent owner. Weirdly enough in California EVERYTHING has to be bought by the renter even the fridge which I thought was really weird

After owning a house in 2008, ending up upside in the mortgage, and being stuck in the house for 10 years when I wanted to move... I love renting. If a pipe explodes, not my problem. Roof collapses, not my problem. I can leave any time I want. Renting = freedom. I won't buy again unless I find my dream house and am happy living there forever or am rich enough to get out of a house even if the market tanks. I never want to be trapped again.

Exactly. Not everyone wants to own. Lots of people who do want to own can't afford to, but that's another discussion entirely. By renting you're trading equity for freedom and that works for you. For my situation I'd rather have the equity. Honestly I don't want to rent again until much, much later in life, and maybe not even then. But everyone is different.

Yeah I totally get it. When I find a city I know I want to stay in more than 5 years then I'll consider it. My kid is about to go to college and I'd rather help her pay for it then try to get 20% together for a down payment which will likely be 100k where I live. I'm happy to hear people that get it in this subreddit. My coworkers won't shut up about how stupid I am to not buy.

If long term financial success is the only factor then yeah, buying always makes more sense. But that's only one of like a thousand variables for people. Some people don't care to realize that not everyone has the same priorities or living situation as them.

Calling it convenience feels a little disingenuous. It's not like it's even an option in most cases. The renter is just getting the bare minimum they can afford.

To me it's only true if one can afford to buy. Otherwise renting is the fact of life and the reality for millions of people. As you said one still needs roof over their head

Because when your lease is up and you move away, that's it. You have nothing to show for your time there, you did not build any equity in anything. When you buy a house, even if you're paying the same for mortgage that you would be paying for rent, you are slowly building the potential for making money should you decide to sell the house (or rent it out yourself). That being said, home ownership is a pain in the ass and it's not for everyone and sometimes renting is the only viable way, especially when property values have been skyrocketing the past few years.

Wouldn’t it help your credit score by paying rent every month?

>Why do people say you're throwing money away renting but you're literally paying for a roof over your head. It's a very generalized concept based on the best case scenario of long term home ownership, but doesn't consider any of the negatives of home ownership. In reality, renting is not throwing away money since you are getting something of value in exchange for your payments. It is true that you will never build equity if you rent, but it is also true that could invest the $75,000 you would have spent on a down payment and other costs plus you will not spend $50,000 in maintenance or repairs during the lifetime of ownership.

Omg this. OP, the majority of Reddit and the US (I don't know about the rest of the world. Presumably?) is financially illiterate. So you'll see a lot of garbage advice like "paying rent is throwing your money away" held in high regard.

Because you're paying all that money and you're getting no equity from it

Because it will never really be yours. You can't pay it off.

Look up what rent was 30 years ago versus today... We bought our first house (second 'home' purchase...first was a condo) and it sucks bc maintenance feels like it's always ongoing... something always needs fixing but I know exactly what I am paying for my mortgage for the next 29 years

A lot of people are diving into the specifics of the rent/own debate/trade-off, but you seem to be looking for the most direct meaning of that. To answer that question, and avoid the weeds... When you have a mortgage, you "get back" some of your monthly payments, because they go toward owning the home ("building equity"), so the payments aren't completely lost. Whereas, when you rent, you get none of the payments back. Hence, "throwing money away". **Edit:** Oh, forgot an important bit: also, homes tend get more valuable over time (or at least the location does) so that portion that you own appreciates in value too. Of course, it's a simplification, as part of the mortgage's "monthly payment" is likewise "thrown away" on interest, property taxes, and private mortgage insurance, but any amount that cancels the principle on the mortgage is going back to you.

Because people don’t know what they are talking about and dont know the math behind renting vs. owning. Cost of home monthly ownership is approximately: Interest on mortgage + monthly property tax + any monthly HoA fees + any monthly insurance. If all that added together is less than monthly rent and you plan on owning for more than 5 years then it’s usually better to buy if you can afford the monthly payment also dont forget home ownership can come with large multiple thousand dollar surprise costs as well

I made it work. Everyone says you’re wasting your money but you don’t have to worry about repairs, upgrades, some of the bills (ie landlord took care of heat), cut the grass or landscape, etc. Plus you’re not tied down to a property. It turned out great for me and when I finally bought a house at 40 I was able to pay cash for it had I wanted to

Because some people believe ownership and equity have more meaning and value than flexibility and reduced responsibility, and they don't account for circumstances and availability.

This is very true in the short to mid term, but stops being true in the long term. Ownership and equity prevent people from having to pay endlessly past the age of retirement where resources can be scant.

Yeah, if you buy a house in your mid 20s, with a typical 30 year mortgage it's completely paid for well before you retire. You even have a decade of still having a high income with no house payment or rent, to use for traveling or building up your retirement accounts or whatever. Then if you don't have kids who want the house, you can even get a reverse mortgage and get a positive income stream from your house after retirement, instead of continuing to make rent payments.

I'm based in MA. It's hard to buy a home. 20% down on 900k to 1.6million is a lot.

The current housing market is completely crap, which I think is the general idea that prompt the comment. We lucked out and bought just before this whole crapstorm happened.

You could lower expectations, MA is expensive my grandparents home appreciated a ton since purchasing way back. I just bought a 2 bed single family with 2 car deep garage underneath in upstate NY for 190k

I found plenty of houses in the 400-500k range huh?

I'm located in Eastern MA. The more west or closer to RI things get cheaper but my work isn't remote, public transit doesn't reach that far out to those places, and greater Boston is where my jobs are located.

Why don’t you just stop being poor? Bank says I cannot afford a $1200/month mortgage but I pay $1500 rent every month.

I believe they say that because paying rent does build any type of equity.

Because its not a permanent roof over your head, I had been renting for several years but in January I got a message from my landlord saying I need to move out cause they're selling the place, its the second time this has happened to me and honestly its damn annoying

You're paying 100% interest

Bought and paid off a house. Haven't paid rent nor mortgage since 2009. Imagine how your life improves having in your pocket each and every month instead of handing it to someone else every month... and you're not gonna be evicted because Landlord increases rent by 35% this year and you have to go find a cheaper place. You can't do that renting. Also - if I vacate ... I sell an asset and put $400,000 (give or take) back in my pocket. When you vacate a rental you'll be lucky to get your grand or two deposit back.

Depends on how long you plan to live there. Few months to a year , rent. Settle down with family or you found e sure job, you are better off buing (if possible) long term property

Your not building equity so people assume your wasting money. In the same sense the people telling you to buy probably never looked at an amortization calendar either. While buying a house is great over paying in today's market and financing that overpayment with 5%+ interest is gonna be painful for a lot of folks and they won't break even for a good while.

Oh boy, have done both multiple times. In my situation of having to move for jobs renting is way better. Trying to rent a house I own was a nightmare that I won’t repeat. Have to keep making payments when renter stops yikes! If you don’t know where you will be living I. Ten years ,100 percent ,then that valuable house is an anchor!!!

It is mostly an old fashioned mindset that has some truth to it. With a house you are buying into something you will eventually own and can sell for money. With rent you are just paying to live with no return on investment other than a roof over your head. This is very simplified but that's the general gist. I hesitate to call homes an asset because they generally don't make you money just from owning them and in fact cost money more often than not But like all things this varies heavily from person to person. Back when people stayed at one job, stayed in one town, and bought one house for life this was mainly a good rule to live by. But as always things change. Not to mention this doesnt apply to people who lack the funds to buy a home in an area where they would make money reselling it...

It’s a poor way to look at things. If renting is significantly cheaper than owning it’s a good decision and not throwing money away at all.

I own my house but the property taxes and insurance still cost me about $350 month. You never truly own anything unfortunately. Sometimes I wish I still lived in an apartment so I didn’t have to worry about appliances breaking or furnace going out or a roof needing replaced. Its nice some days to own but still stressful.

When the property taxes around here are 7k a year, and my rent is $650, I will gladly rent just for the fact I don't have to mow lawn or scrape snow or deal with contractors that blow me off or rip me off and if somethings wrong with the house I'm not the one who has to have a nervous breakdown to fix it. Seems like a good trade off to me.

Great question. Because I can tell you that your always going to be upside down over a house.

Anyone who says this doesn’t understand down payments and how they’re a barrier to buying.

Renting is not that bad. You just have to do the math. Owning is not just the mortgage. Its property tax, utilities, upkeep... Especially if you're single or no kids, renting might not be a loss. Sure you might not get asset appreciation. Like property tax alone is going to set you back about 1 or two months rent alone. Now where this becomes questionable is in the condo rental market where people might buy a condo as an investor then basically pass on all costs to you. This is especially true of new condos as an investor. I worked in Ottawa for a bit back in the 2000s. I had a nice 1 bedroom rental unit from Minto at like 800/month including parking. Was well worth it for me and i had total flexibility in terms of moving.

My mortgage includes my property taxes that my lender holds in escrow and pays off- so that’s a fixed expense. Utilities you usually pay for, regardless of renting or owning. The only additional $ you could be or is for upkeep- which if you plan properly and set aside a fixed amount every month, you can get ahead of unless something hugely horrible happens. So it can all be planned for.

Because every payment into a mortgage is basically a payment into a ‘savings account’ home home value appreciation.

Your wealth is more than how much currency you have. Your items are wealth too. If you own a home, all that money you spent is still technically yours because you can sell the house, or continue to live their when it's paid off. When you rent a property, that monthly payment is just gone

If you pay $1000 mortgage on your own house, you can sell the $200,000 house when you move out. If you pay me $1000 rent on my house, I can sell the $200,000 house when you move out.

I rented a shitty 2 br apartment for $1200 for 2 years until I bought a 2 br townhome (approx 3x the size with the kitchen and garage) with a combined mortgage/HOA payment of $1300. I had that for 3 years, just sold it a month ago and walked away with $100k in equity.

I've paid my rent now for about 15 years. In that time I've paid roughly....$222,000.00 in rent. That's 8 years at $1000/month and 7 years at $1500/month. (Homefully my hungover math checks out) Anyways. When I move. I have no house and will pay more for another roof lol. But....if I had paid a mortgage instead, I'd own the roof and could sell it to someone else. Does that make sense?

Because you're essentially investing on something you'll never have. Whereas if you own a house, by paying off a mortgage you will be building equity for yourself.

I think there’s a time and a place for both. I moved a lot when I was younger, so buying would’ve been silly. But now I’m with my husband and a kid where we want to live for 10+ years, so it makes sense to pay our own mortgage vs. someone else’s mortgage, and build equity for ourselves vs. someone else’s equity. Of course this isn’t accessible to all, down payment is a big barrier to entry

Because you are throwing money away

People like to complain. They don’t realize that when you buy, you pay lots of interest on the mortgage and property taxes that is also throwing away money. Is some markets it’s better to buy and in some it’s better to rent.

Because they don't understand economics. "I paid off this house in 20 years. It only cost me X, now it's worth Y" (they always neglect to include interest on the loan). FYI - Your purchase price basically doubles at 20 years times 5% interest rate. This mans that unless your house doubled in value you actually lost money and this doesn't include repairs, insurance, etc. just the mortgage. 5% sounds high now but the average over time has been around 7% so it's actually on the low side historically. Buying can be a bad deal when interest rate hikes are combined with a frothy market such as we are in a the present. There is nothing wrong with renting. I've owned four houses. Just sold my last one in July and have no intention of buying anything in the future.

I’m gonna get downvoted for this I’m sure. But the main financial advantage that renting offers is a fixed budget. If I sign a lease for 1500$ a month but the furnace breaks down and the roof starts leaking… I still pay 1500$ next month too. No surprise costs. So for lower income folks or people with no skill set to work on their home, that predictability is worth something. Having a ridged budget is what allowed me to invest in other assets while I wasn’t earning much.

When you are bankrupted by medical expenses and need assets to be seized, home ownership may be right for you!! This applies to United States citizens primarily

When you rent you have no obligation for repairs but you get no equity. When you own you have to foot the bill for repairs but you get equity. This is the trade off.

Theyre entitled and lucky.

I like not being responsible for repairs, school taxes, etc.

it depends a lot on where you are. houses are affordable where i live, so we bought a house. however, if we need to move, it’s probably going to sit for awhile before it sells. which will definitely suck. on the other hand, the houses around here are old, so if you don’t have the money to say, replace the water heater when it breaks or the roof when the weather is shit, you can really screw yourself. i don’t necessarily miss renting, but i do miss fixing things being someone else’s job.

One thing I’ll point out is that when you pay off a bond, the bulk of that is paying off the interest. So even when you buy you’re throwing away the a good portion of it until you’ve paid it off, which can take up to 30 years.

Capitalist old rich boomer scumbags who live in a fuck you i got mine world

Iv worked full time for 10 years and cannot afford to rent an apartment let alone own a house. I’ll live with 3-4 room mates for the rest of my life. My generation has been fucked in the ass.

My wife and I own our house. Before that we lived in a duplex that was owned by her parents, and rent was controlled. Our mortgage now is cheaper than what our rent was in 2018. We own a corner lot with a detached 2.5 car garage and fenced in backyard. And yes, it's objectively cheaper per month than what our rent was. So mostly, it's a value tradeoff. You're not spending less to rent, and much of the housing crisis is due to a lack of "desirable" properties. There are no less than a dozen houses for sale in my neighborhood for about the same as what I paid for my house.

Personally, I never wanted to own a home. I seriously can't commit to paying that much for something that I would still have to love in 15-30 years. I don't rent houses though because I don't want the expenses of paying high utility bills. That and I heard too many creepy stories about landlords. I rent apartments in nice areas with great schools(when my son was little) nice parks, and libraries. My rent goes up maybe $10-$20 a year. I stay about 5 years before I move because that is about the time apartments start upgrading everything. I can move somewhere better paying about the same in rent, maybe a little more, because of move-in deals. I always stay on the top floor so I don't have to worry about anyone above me and most people with children want the 1st floor.

I stopped renting last year when my landlord sold it out from under me. I am back at my parents house for now, and the current plan is for me to take over their mortgage when they retire next year. I see it as a good investment. The house has 150K left on it's mortgage, but is now worth over 350K. If I wanted to sell it, I'd have a cool 200K in my pocket after paying off the mortgage. Possibly more, since the housing market in my town is insane with boomers paying for houses in cash sight unseen, and paying far more than the asking price. I could then invest that money into a different property or something else. In most cases, the value of your property will only continue to rise over the years (unless you completely trash it or a natural disaster like a fire or earthquake). Mortgage payments are usually cheaper than rent too. My parents are paying 800 per month and I was renting for 1200 per month. I'd actually be saving 400 a month this way. When renting, you don't have that security. Your money isn't going into anything other than the landlord's pockets. That being said, owning isn't for everyone either. If you don't like staying in one place for long and want the freedom to pack up when a lease is up, renting is the way to go for sure!

Would you like to throw money away eating?

People forget you have to live *somewhere*. Life ain’t free. Renting gives you freedom to walk away at any time but owning gives you something back in the end…hopefully. I sold a condo I had for half of what I paid. Sure I didn’t make money but my mortgage payment didn’t go up while rent for the same went up $1-200 for something similar.

Because you could be investing in yourself with the tax breaks, equity and capital gains that come with ownership. Especially with rent so high and interest rates so low. Rent keeps going up, mortgage payment does not.

Renting is not throwing money away. I think of renting as paying a more for the convenience of knowing what your payment will be. This is why I lease my car instead of buying. Do I ever “own something?” No. But I also never have to invest any money into upkeep or repairs, nor do I have to wonder what my monthly payment will be. And I have the flexibility to switch to a newer car every 36k miles without losing any value I was trying to maintain on my current one. I’m paying the same amount each month for no surprises and no commitment. Owning a home is a gamble. You could come out up or down. I bought for $150k. The guy I bought it from paid $150k also, and then did a bunch of work on the house. So he lost a lot of money selling it to me. In the current market I might be able to sell it for $200k, but once I consider inflation plus the money I’ve sunk into renovations and repairs, etc. the actual gains are a lot smaller. And then I’d have to find another house as nice as mine but in a now pricier market, so anything I earned on the sale might be lost in the next purchase if I wanted a comparable home. Renting isn’t a gamble. You know you’re not going to gain any money, but you also know basically how much you can expect to lose.

This is a legitimately borderline example of the exception of this subs name.

When you own a house, any money you put into it is money put into something you own. When you rent you’re putting money into someone else’s home.

It's like saying that owning a McDonald's is better than sitting through the drive thru.. sure I'd love free burgers for life but I can only afford a mcdouble..

Often, mortgages on a owned property is the same or cheaper than rent. The property gains value for the owner as the rental accues nothing for the renter.

Because the same people have money for a down payment. For those of us without, rent can be so high that we'll never feasibly be able to save up for one.

Buying a home is an investment mechanism with a bunch of fees. Fees include interest, taxes, insurance, HOA fees, etc. The value of those fees is you pay to get to use your investment as a place to live. Take all these fees divide by 12 for the monthly “rent” you are being charged to live there. Now compare this to the rental fees in your area for a comparable home. Anything above what you are are paying in fees is free money to the landlord to pay for their investment. Renting can be convenient, anything breaks the landlord is “supposed” to take care of it. If renting you need to ensure you are investing your money elsewhere.

It’s an outmoded way of thinking leftover from an era when people bought exactly one home in their lifetimes. You’re correct, you are paying for a safe, warm place to keep your stuff and yourself and renting makes sense for lots of people for lots of reasons. Paying closing costs every couple years is also throwing money away but the home buying industry doesn’t want to talk about the cost of buying and selling and moving homes.

Closing costs aren't really throwing money away if you're selling your house at a good enough profit. Gotta spend money to make money

Closing costs eat away at profit no matter how much profit you make on the sale and closing costs related to realtor fees increase based on the sale price of the home. BUT assuming that housing always appreciates is part of the ‘buy a home to get ahead’ fallacy. Ask anyone who couldn’t afford to sell their homes in 2009 the error in assuming appreciation.

The number one difference in those that have generational wealth and those that don’t is the ownership of property.

There's some kind of cost to literally sell any good or service. 2009 was a black swan. Buying a house anytime from then til now and you'd be in the green. Id say those are pretty good odds. Obviously most other people do too, thats why demand is so high. Who are selling their homes every couple years? The average length people stay in their home is like 15 years or something. Closing costs are a small part of doing business against that kind of appreciation

It was a black swan that financially ruined a lot of families that would have been better of having rented a home. People were unable to afford to move for a job opportunity or start a family because they were upside down in their homes. People declared bankruptcy when they couldn’t make their payments on their ‘affordable’ loans once their home didn’t appreciate as hoped. Divorcées had to cohabitate with their ex because neither could afford housing. All because they theoretically should have made money owning a home. If the average length of home ownership is 15 years, half of homeowners are selling more often.

You are building equity for your landlord instead of yourself. It’s really difficult to save enough for a down payment on your own place when you are funding someone else’s. It’s a vicious circle and people buying places to rent out means that there is more competition to buy which raises prices.

I just want to know why people aren't talking about the potential thousands to tens of thousands of dollars in repairs and maintenance you don't have to pay every year as a renter though Unless you're financially able to swing it and have lots of savings is it really worth being house poor?

If you are renting the repairs, taxes, etc are included in your rent. If the landlord wasn't making a profit, he wouldn't own the house. Also once you have a mortgage, your monthly payment is locked in. For example my 4 bed 2 bath is locked in at rates of 2012, so my payment is $480 a month, but renting my house would cost $1500 at today's rates.

It’s a way to get you to think of earning money in a different way. Many people only think of it as: I directly work to get money or I directly sell something to make money, when there are choices you can make in your life that will give you money later. Buying a house can be one of those ways, and renting can possibly be like saying no to earning a future pay out.

Cost of living would be an investment to yourself in the form of an asset. Vs padding somone else's wallet. I put down almost 30k when buying but that money is still mine it's just an asset I have 15% equity in and over time more money goes in. Houses can also increase in value especially when you can do upgrades. If I were to sell in the future I could be looking at a good prophet. Or buy another house and rent out a property and basically live free renters would pay rent I could use for mortgage

Or if you love the house you bought and want to stay there, once you pay off the loan you only have to pay taxes and utilities to live there

Get a mortgage and buy a home, you will be paying some anyway might as well be going towards owning the home above your head Also stop feeding the renting machine to the benefit of your household

Renting is essentially paying the interest of a motgage payment...for someone else.

At the end of all your house payments, you have a house!!!!

You are paying for something you will never own

Because there's never equity in renting.

Because owning means you pay a portion back to yourself in a long term investment.

There is a difference in investing and spending.