[bbbobbb]

Your math is too simple. Consider alternative scenario where you invest your down payment and what you save on mortgage (generally slightly more expensive), invest what you save on extra repairs / maintenance.

After those 30 years it's entirely possible that as a renter I have:

- been able to take advantage of moving freely for personal or economic reasons

- been able to move to a newer completely renovated apartment number of time for no costs other than moving my stuff instead of either paying for it or living in a house with a 20 years old kitchen

- been able to live without stress about all the responsibilities that come with owning a house, being in debt and tied down

- come out with enough money from my S&P500 that I started 30 years ago to decide to settle down somewhere and buy the house or continue as is with bunch of money saved up

I am not saying that this is what will always happen or that owning a house is strictly worse but the "rent is money down the drain, mortgage payments is money you keep in the end" angle is way too naive.

[jacquesm]

You must be a much better investor than I am. On property I have to date never lost a dime, and made pretty good money every time I bought something and held on to it for at least five years. But on other investments the returns have been all over the place, from tripling my money to losing it all and everything in between.

If you don't have a home that you own yet and your only options are mortgage or renting I'd pick the mortgage any time, but I'd always make sure to buy in a market that is active.

[bbbobbb]

It sounds like I might be in this case. We're talking decades. You are talking about various investments and even making sure to time the mortgage to beat the market.

I am talking about putting the money in S&P 500 and similar without trying to time, beat or track anything.

[orwin]

You always bought property in or nearby city centers then. My mom's house lost 10k (~5%) in value in 10 years. Not an issue at all, but rural houses do not appreciate as much as the worst ETFs

[thunky]

> You must be a much better investor than I am

> returns have been all over the place, from tripling my money to losing it all and everything in between.

Yes you are a bad investor and you should stop what you're doing and buy VTI or a target retirement fund instead.

It takes zero skill or effort to get average market returns that way.

[jacquesm]

Thank you for your well thought out advice.

[thunky]

You're welcome. But don't take my word for it:

https://www.investopedia.com/articles/investing/030916/buffe...

[lukas099]

A house is a lot of eggs in one basket though.

[pjc50]

> been able to live without stress about all the responsibilities that come with owning a house

A lot of renters report that being forced to move house regularly is a huge source of stress.

> rent is money down the drain, mortgage payments is money you keep in the end

Mortgage is paying rent on a house-sized chunk of money which you have to spend on a house. Economically they're similar. Except the US has a big tax advantage which is only available to morgagors. (Does it also have the home capital gains tax exemption?)

[kcplate]

> I am not saying that this is what will always happen or that owning a house is strictly worse…

In my adult life I have lived in ten rental properties and have purchased two homes (currently living in one of them). In my cases of home ownership, my property values increased enough over the time I lived in those properties that you could theoretically view the monthly outlay of my mortgage and taxes as nearly a zero sum game. However rent was always an expense and the amount of investment income I made on a theoretical “down payment” amount across the terms of those leases would not come close to erasing the rent I paid.

I realize this is anecdotal and specific to my location and frankly luck, but for me it makes having a mortgage make sense financially.

[cowl]

Things must be really different in the US then. The downpayment here is really not an amount that you can make any serious investment with. Even if I made it I could not afford to put it in high-risk/high reward investments and the low risks ones are not even worth the cost of blocking the money.

- I can still move freely for whatever reason i want. I simply sell the house and buy a new one.

- the cost of changing a kitchen once in 20 years in your example but even once in 10 years is insignificant and the fact that I choose it according to my needs instead of getting whatever I find more than make for the cost.

- I have no stress of needing to move (generally the more flexible rent agreements that allow you to move out whenever you want also come with the risk of getting kicked out or rent changing significantly)

But again all comes down to the difference of rent vs mortgage and here in Europe for most people the difference does not make sense. let's talk specifics. Let's say rent is 700eur/Month and mortgage is 800Eur/Month. the difference is less than you would spend for frivolous, spur of the moment things.

[dave333]

But this ignores taxes. Also most renters don't save and invest they consume whatever they have left each month sometimes more. Owning a house with a mortgage forces you to save. Given real estate price trends over history throughout the world, do you want to be long or short it?

[bitshiftfaced]

The explanation that made the most sense to me is that, for people who for whatever reason, don't tend to invest budget surplus, buying a home leads to better outcomes on average. It keeps the lifestyle creep at bay with minimal mental load.

[wodenokoto]

How do you calculate the monthly savings of renting vs mortgage? E.g, how do you decide how much more to put in the S&P500, than would have been possible if you had a mortgage?