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by csomar
17 days ago
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Rent is determined by supply/demand. In the USA, rents are higher (than buy) because rental businesses are dominated by companies who can do the math. In many parts of the world, rental businesses are small/micro by someone/family who want to own property. See this: https://www.numbeo.com/property-investment/gmaps.jsp?indexTo... So for many people around the world, it's more economical to rent. You are basically being subsidized by the people who are obsessed with the idea of owning a property. |
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A unit (multi-dwelling property, not necessarily an apartment) might cost 650k here, but only rent for 500$/w. 25kpa is a 4% return on that principle, before expenses (property management, maintenance, rates/taxes etc).
The only context in which it makes sense is if capital gains/land value goes up, which it has historically but that's no guarantee.
Houses make all these numbers even worse - higher upfront expense (land value) and lower rental yield (they rent for more, but tenants prefer a better house/dwelling more than they care about a back yard, so cost goes up more than rent does)