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While I generally agree, and own myself, there are some clear downsides to owning that may not have made your math. * Cost of maintenance and upgrades. You now have to mow your grass or pay someone to mow it. You now need to shovel your driveway or pay someone to do it. When the toilet breaks, you now need to pay for it. When your roof wears out, you now need to replace it. If you don't replace carpeting and replace appliances, your value will slowly drop. A house is basically slowly falling apart, and with no work/money will lose value each year. At my previous house, I put roughly 5% of my purchase price into all of this junk, per year. So on a 300k house, that works out to like 15k a year, or $1,250 per month. Depending how new or old your house is, sometimes this number can change a little... but it really adds up quite a bit. * Exposure to real estate market. If you rent and property values double (or half), I doubt you care that much (maybe rent goes up and you move out). If you own and property values plummet (see Las Vegas in 2012), you can be really screwed. You are a lot safer from all this kind of stuff by renting. Yes you miss the gains when the market goes up, but you are protected from the falls. * Cost to sell. Costs about 10% of your final selling price to unload a house. Stay there for 10 years and the house appreciated? Awesome, you can take it out of our appreciation. But imagine your house stayed flat or lost 10% of it's value? You need to pay another 10% on TOP of that to unload it. Again, compared to renter... the renter can just move out. |
There are protections for house owners. In extreme cases, one can walk away from a mortgage, and take a 7-year loan default.