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by jamil7 313 days ago
I've looked at this a bunch of times, from a pure return perspective, yeah equities usually win. But there's enough benefits to homeownership outside of that lens that I think either side can make a pretty compelling argument (I say this as someone who rents). It also highly depends on which market we're talking about.
2 comments
bombcar 312 days ago
The main thing is to look at it BOTH from a financial standpoint AND from a lifestyle choice, etc.

Too many people are too quick to dismiss renting because of the “conventional wisdom” - or think that only small apartments can be rented.

On the other hand, owning comes with comforts that can be hard to put dollar amounts on, for some.

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michaelrpeskin 312 days ago
yes - I often think about what I would do if I "won the lottery" or similarly got a significant amount of cash. Even though I have a low mortgage rate (refied in the middle of COVID), I'd probably still pay off my house. I know it makes absolutely no rational economic sense, but not having a mortgage payment and knowing that I own my house would give me a piece of mind that as you say is hard to put a dollar amount on.

I know there are people out there that like maximize returns with leverage and all of that - and the math all makes sense! - but I'd prefer the simplicity of not dealing with it.

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HarHarVeryFunny 312 days ago
Timing is huge part of it .. the real estate market goes in long term cycles, and if you buy at a good time you may do well over 10+ year timeframe, but if you buy at the peak then it may take that long just to break even if you sell (just in terms of house price, forgetting taxes/etc, and real-estate fees - 5-10% of price !).

Then of course you have all the expenses of home ownership, starting with real estate taxes ($20K/yr by me), maintenance (incl. costly items such as roof replacement), etc.

Deliberately investing in real estate, where you can choose the city/market, type of dwelling, need for renovation, etc, may have a higher chance of being profitable, although even there obviously buying at bottom vs top of the market makes a big difference. For people just buying a house to live in, conventional wisdom is not to expect it to be financially preferable (all told) than renting, even if sometimes - depending on timing - it may turn out to be.

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