[sparrc]

Isn't this generally always the case?

I've always understood that when you buy you should expect to be paying more than a renter for maybe 5-10 years. At least in the US mortgage payments are almost always fixed whereas rents are almost never fixed or controlled.

Rent just rises forever in most cities and usually mortgage payments of people who have owned for 10 years look like amazing bargains.

[mdnahas]

No. When you rent, you usually are paying (1) the owner's mortgage, (2) taxes, (3) maintenance and (4) profit. So renting the same place is almost always much more expensive than the mortgage payment.

Rents do not have to rise. They have been rising in most cities because people are moving to cities. Rents dropped in Detroit when a lot of people left. (Rents also rise with inflation.)

I do wonder about the data. It compares the median rental to the median house purchase. And people usually rent smaller places. So, renting is usually cheaper because of that. I don't know that it is an apples-to-apples comparison.

[sparrc]

That's not necessarily the case. When you buy a house you can't suddenly just have a mortgage payment equivalent to someone who bought 10-20 years ago. And someone who just recently bought a house cannot charge higher rent than someone who bought 10-20 years ago.

In other words, rent is dictated by the market, not some "cost plus profit" calculation on a per-landlord basis as you're describing.

If you're renting from someone who just recently bought the house, they are very likely taking a short-term loss for long-term gain.

[bluefirebrand]

> No. When you rent, you usually are paying (1) the owner's mortgage, (2) taxes, (3) maintenance and (4) profit

In what world is this usual? Most of the time when renting you're paying for a single floor of a house or a single condo unit. It would be insane to expect people who are renting a portion of a building to pay for the whole damn thing.

[bluefirebrand]

I thought the same, renting is supposed to be cheaper isn't it? It's supposed to be the option for the people who can't afford to own.

People opting out of ownership in favor of renting is an oddity, and usually is nothing about money and instead is about not wanting to be anchored by a mortgage.

[jjeaff]

Why would anyone buy a property to rent it out if buying was more expensive than renting?

[bluefirebrand]

Because owning a house builds equity and renting doesn't?

Owning a house and having renters pay for your house to build equity is extremely valuable. Even if they only pay 80% of the mortgage, it's still equity you are only paying 20% for.

Besides which, most renting is only for part of a building, so it's much cheaper than buying a whole building and property.