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My thoughts on renting versus buying

milesbarr.me

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Re: My thoughts on renting versus buying

#141

Post by cyanmagenta »

firecall wrote: post #82
kibwen wrote: post #15

> The Flexibility of Renting Is Undervalued And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle rather than as a basic necessity. And it's not just a necessity because it shelters you from the elements and gives you storage for your stuff; it anchors you in a neighborhood and allows you to begin forming a local community. The flexibility of renting that t…

Absolutely agree with this! We need, as a society, to bring back generational communities. Our workplaces are not our families! I'll also add, that once you have children, owning your home is a very welcome level of stability. Nothing worse than looking for a new rental and potentially being forced to upend all your routines and find new schools for the kids as you cant rent in the same area anymore!

> once you have children, owning your home is a very welcome level of stability

I think this is the biggest factor if it applies. If we want to be utilitarian about it, the benefit to your kids of having the same school to attend, same neighbors to play with, same room to call their own and paint the walls as they desire, etc. just dwarfs everything else. Kids just do well in stable, predictable home environments.

Re: My thoughts on renting versus buying

#142

Post by ghaff »

__turbobrew__ wrote: post #114
david-gpu wrote: post #98

Earlier quoted context omitted.

Some condo corporations are poorly managed and lack sufficient emergency funds, or proper maintenance, and thus resort to special assessments that are not funded in advance. The same is true of many homeowners.

As a homeowner, that is 100% in your control whereas with a condo it isn’t. I have seen so many times in the local news about condos who are underwater because the board decided to not proactively save and fix things which was a democratic decision made by the board. Honestly I have such low trust in the ability for humans to plan for the future over the now. It is like a bug in our psychology.

>As a homeowner, that is 100% in your control whereas with a condo it isn’t.

As a homeowner I have definitely had some 5 figure costs over the years that were totally unexpected and several in the low 5 figure range that really needed to be done. Doesn't mean I couldn't cover them in some way shape or form but they happened.

Re: My thoughts on renting versus buying

#143

Post by carlosjobim »

Esophagus4 wrote: post #131
cramsession wrote: post #120

Earlier quoted context omitted.

Landlords bake those costs into the rent price.

Too hand waivey and doesn’t tell the whole story - even with the carry costs “baked in”, renting is generally cheaper in the short run because those costs are lower anyway. > Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros in 2025, with the cost difference between the two growing in all but 12 of those metros since last y…

> Average rents are cheaper than average mortgage payments

The average mortgage is for a family, the average rent is for a broke young worker or student living in a much smaller and worse accommodation.

Renting is always more expensive than a mortgage for the same housing unit, because the landlord needs to make a profit from his tenants.

Cooking the numbers won't change reality. The truth beats all the lies, no matter how many lies.

Re: My thoughts on renting versus buying

#144

Post by 9x39 »

ghaff wrote: post #133
zeroq wrote: post #111

Earlier quoted context omitted.

Not really. If it's viable for you then buy your first property as soon as possible and keep saving. When you want to move just buy another and rent the previous one. In most cases people will need to get a half decent job and save for a few years first but they can keep saving and have enough for another property in few years. And if you really have to move - then you can still sell that property. People are getting…

>And if you really have to move - then you can still sell that property. People are getting new cars every 2-3 years and it's not that different from swapping real estate. Of course it is. I think the average American car age is 11 years or something like that. But, if I wanted to swap cars like that, I can go into a dealer and basically transact it in 30 minutes. Good luck doing that with a house.

Well, it depends on whether it’s a buyers or sellers market.

https://www.axios.com/2025/06/03/homes-buyers-sellers-redfin

https://fred.stlouisfed.org/series/ACTLISCOUUS

When it was a sellers’ market, I knew people who sold in days, and buyers who lost out offering 50, 75k over asking price. Today, not so much.

Re: My thoughts on renting versus buying

#145

Post by klipt »

estimator7292 wrote: post #109
wavemode wrote: post #92

Earlier quoted context omitted.

> If you rent you're left with nothing. Well, no. You're left with the cash you would've spent buying a house. Whether that's financially better or worse, depends entirely on the mortgage interest, taxes, and maintenance costs of the house, as well as the money you could have earned investing the cash elsewhere, compared to the rent you would have spent over the same time period.

When renting a 1br costs as much as my mortgage on a 3br, I don't think that really tracks.

Depends where you live though. In the SF Bay Area, buying requires a monthly payment several times larger than the rent for an equivalent place.

Re: My thoughts on renting versus buying

#146

Post by zahlman »

__turbobrew__ wrote: post #96
HardCodedBias wrote: post #55

Earlier quoted context omitted.

Ben is fantastic. As Ben notes the tax advantaged status of primary homes has more capacity than most tax sheltered alternatives. But a lot of this depends upon income. This reminds me, I need to buy more DFA. :)

Where do you buy DFA from? Here in Canada I think you can only buy it through brokers? I want to buy some small/medium CAP ETFs but there is nothing really in Canada you can buy off the TSX.

(This is not investment advice)

Several companies (including major ones like Blackrock, and TD Bank) offer US equity ETFs denominated in CAD available for purchase by Canadians. This includes some basic sector and factor options, and even some leveraged and other derivative ETFs (but expect MER >1% on these).

Your bank can most likely set you up with a "direct investing" or similarly named option (after doing some KYC stuff of course) that allows you to buy ETFs directly in a TFSA or RRSP. Or you can try a third-party service like Questrade, WealthSimple etc. It's even possible to hold options in a TFSA if you have the right paperwork, as long as you don't give the CRA the impression that you're making a "business" out of "day trading". Once you're set up it should be easy to find "some small/medium cap ETFs", for both Canadian and American (and maybe international) holdings.

tl;dr: talk to someone at your bank. Make sure it's clear you aren't looking for investment advice and want to make the decisions yourself. Or look up those third parties. (If you hold registered accounts at multiple institutions, to my understanding you will be held fully responsible for observing a total contribution limit etc. across all of them.)

Re: My thoughts on renting versus buying

#147

Post by rob_c »

zeroq wrote: post #79

Counterpoint: buying is always better, people just can't afford it. Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. But after you pay your mortgage you still have an asset in your hand. You can pass it on to your children or you can sell it when you're old, downsize (or even rent) and get some cash for your ret…

> Because few people can afford the 20% downpayement needed for mortgage.

Current state of the British economy is the state is looking to allow 40yr 5% deposit mortgages. We're not quite there yet but it's heading that way. Be very thankful if your country isn't that bad!

Re: My thoughts on renting versus buying

#148

Post by carlosjobim »

bnchrch wrote: post #62

I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…

> Leverage: I can't get a $700k loan to put into equities but I can for a home.

Exactly, and most people wouldn't even be able to get half of that for investing in a business that turns a profit and employs local people. So that's why all money is rushing into real estate and the industrial world is dying now. And death is forever.

Re: My thoughts on renting versus buying

#149

Post by rob_c »

milesbarr wrote: post #99
andy99 wrote: post #30

This is written from the perspective of someone who doesnt have kids or other ties that reduce flexibility (and from that perspective I agree a house is a huge liability in term of being able to make big life changes). It also sucks if you have neighbors you can't stand. The main advantage of a house imo is that you can't typically rent something comparable, at least where I've lived. The rental market for 4 bedroom…

Fully agree on this. If you have kids, stability is important so that can be a good reason to buy, regardless of whether it's an optimal financial decision.

In what possible scenario is burning cash vs keeping a fraction of it a bad financial decision?

I can only imagine it makes financial sense to rent if you live somewhere where you're not paying off someone else's mortgage and are paying a fair renting price. (Otherwise paying your own mortgage just makes more sense)

As an actual honest question, where in the world is like that any more?

Re: My thoughts on renting versus buying

#150

Post by 9x39 »

al_borland wrote: post #78
bnchrch wrote: post #62

I've seen these critiques for years. and while its not necessarily wrong, I believe it under weights a few points: - Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment. - L…

> No one can evict me into a hot rental market to suit their needs. The bank can, if you take out too many loans against your house that you can’t pay back. When you barrow against your house you’re increasing your risk. “Rational people don’t risk what they have and need for what they don’t have and don’t need.” - Warren Buffett My house is paid off now and I can’t think of anything that would make me barrow against…

It’s true over leveraging seems to be the American way, but GP was saying, I think, that homeownership does not have the risk of a landlord ending an otherwise mutually accepted relationship.

If this is still accurate, a third of renters could theoretically be told the rent is doubling or learning the lease is ending. Depending on the health of the market, that can be a major risk, and not everyone can or wants the flexibility of a rental at all times.

https://www.bls.gov/spotlight/2022/housing-leases-in-the-u-s...

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