[Swizec]

> This is obviously not true. You don't have to do the math to realize [rent is throwing money away]

This greatly depends on your specific numbers.

We did the math with my partner: our current rent is 5k/mo. Our mortgage for the same place bought when we moved in would be 9k/mo + transaction cost + maintenance. It will take our rent almost 10 years to catch up to the cost of a mortgage. Max increases are capped in California.

Over those 10 years, investing the delta in index funds puts us about 200k ahead of buying in terms of net worth. We’re also not handcuffed by a mortgage for 30 years which gives us optionality.

Not buying has let us build about 700k net worth debt free in the last 10 years we’ve been together. We’ve also moved 3 times with essentially zero transaction cost. I think that’s fine

[hintklb]

you definitely came ahead by not buying and you did the math. Good for you!

Generally, this holds true today for most HCOL and MCOL areas. It is still a good idea to buy in a few LCOL areas.

What I have seen is that in high-earner areas (Bay area for example) buying completely outpaces renting in cost (buy to rent ratio_. Mainly because the pool of buyers outbid each other. This is mainly due to the narrative and social pressure to buy at all cost. Similarly, renting stays relatively low as people do not compete as much.

[Swizec]

> Generally, this holds true today for most HCOL and MCOL areas. It is still a good idea to buy in a few LCOL areas

We have friends who rent to live in SF and buy in LCOL as investment properties. Also seems to work well as a strategy.

I think of primary residence as a consumption expense. It's not really an investment because you can't cash out[1]. So unless you put value on the act of owning itself, it's best to do whatever gives you a lower monthly. In our case that's renting.

[1] yes I know about HELOCs. I'd rather get margin loans on index funds than risk getting kicked out of my home.

[hintklb]

I fully agree with you. I also think that there are as many good intangible argument for owning as for renting.

Renting allows you to be flexible for new opportunities. They allow you to focus on other things in life than your house, treat your landlord as a service provider, free your time to do more important things.

Frankly it is sad that as a society we value homeownership so highly and judge people that decide to rent so harshly.

[globular-toast]

With those kind of numbers it doesn't really matter what you do, you'll still come out ahead.

1. Be rich,

2. Don't be poor.

[Swizec]

Yes that’s a pretty good strategy achievable by most people who hang out on Hacker News. Lots of variance tho. Poorly timed life events can really mess it up