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My thoughts on renting versus buying

milesbarr.me

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Re: My thoughts on renting versus buying

#281

Post by const_cast »

cramsession wrote: post #134
Esophagus4 wrote: post #131

Earlier quoted context omitted.

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…

That compares average mortgage and average rent, but the average house you buy is going to be much bigger (and include a yard) than the average rental. They’d need to compare equal properties to have a meaningful study.

The average home is also going to be in a very suboptimal location.

If you compare homes and apartments in the same location, the gap grows even wider. Yes, $4,000 a month in Manhattan is expensive.

But $4,000 might be JUST the HOA cost for buying in the same area. Never mind the 10 million dollar mortgage.

(Spoiler: fake numbers, actually do the math for your city)

Re: My thoughts on renting versus buying

#282

Post by const_cast »

cramsession wrote: post #107
ghaff wrote: post #97

Earlier quoted context omitted.

>Counterpoint: buying is always better, people just can't afford it. >Renting has it's charm for youngsters You're sort of contradicting yourself. So long as you think you're sort of settled in an area, buying is probably better. But, if it's your first job out of school, even if you have a nice bunch of money you could put towards a down payment, it's not clear that buying is a great idea except maybe if you're in a…

If you're young and you buy, you could get roommates and have them pay rent. That would definitely tilt the benefits heavily to buying.

Obviously the risk of this is significantly higher than just renting.

If you have your first job and therefore little to no liquid cash, and then on top of that you require tenants to make your mortgage, you're in a pretty risky position.

That means that if just about anything goes wrong you can be absolutely fucked.

Re: My thoughts on renting versus buying

#283

Post by oliwarner »

Can't believe an article on rent-vs-buy doesn't feature the word "evict".

Yes, renting allows you to up and leave, but buying gives you the security you won't be homeless when your landlord gets bored of you.

This really matters when you have roots. Kids in school, proximal employment, friends and family nearby, a lifestyle.

Re: My thoughts on renting versus buying

#284

Post by projectazorian »

const_cast wrote: post #277
pedalpete wrote: post #56

Earlier quoted context omitted.

As a renter who has recently been given notice that I must vacate my apartment in 90 days, you'd think I'd agree with you. However, I think this depends highly on the personality of the renter/owner, and that is the point this article misses. If someone is, like myself, comfortable with risks, I'm ok with changing neighbors, locations, and I've lived on 3 different continents and 9 cities? If you're someone who crave…

Homes are not low-risk or stable at all - you transfer the risk to your job. If you lose your employment and you have a home, that's a much riskier situation than if you're renting. Because, if you cant find a job in time or in a very small location radius, you must sell. The mobility of renting lowers the risk associated with extraordinary life events which requires relocation.

If you live in a non-rent-stabilized apartment in a market where annual rent increases are the norm, then by renting you condemn yourself to permanent downward mobility unless your income increases by more than your rent every year.

8-10% annual rent increases are not unusual at all in NYC/LA/SF - maybe you can get a 10% raise every year, but I'd wager even most HN posters can't.

For this reason alone, it makes sense to grind to homeownership as quickly as possible if you live in a top tier market. Those locations also de-risk homeownership a bit since they have the largest job markets and highest real estate demand.

If you live anywhere else in the US then I agree, renting starts to look a lot more attractive.

Re: My thoughts on renting versus buying

#285

Post by lycopodiopsida »

nicbou wrote: post #249
moooo99 wrote: post #49

First of all, I fundamentally disagree on the notion that buying a home should be considered an investment (I would go as far as to argue that this attitude is part of the reason the real estate markets are so broken in many places of the world). I don't want to be rich and I don't need to be - I just want a place where my kids some day can grow up, where I can enjoy the sun in the garden and invite family and friend…

Buying in Germany seems widely considered as a bad idea, both for renting and for living in. It's more of a lifestyle decision, if it really makes you happy.

> Buying in Germany seems widely considered as a bad idea

This is nonsense. If anything, it is too convenient, because you pay taxes on gains from everything, but you don’t pay them if you sell your property after 10 years or if you use it yourself for the last 2 years. If you have the money, buy, wait 10 years and cash out - you will not find a better deal in a tax-heavy country such as germany. And, as everywhere, your rent will increase, but your mortgage will decrease over years. Now, guess who will likely be better off in 20 years…

Re: My thoughts on renting versus buying

#286

Post by projectazorian »

__turbobrew__ wrote: post #83
david-gpu wrote: post #75

Earlier quoted context omitted.

As an approximation, condo fees make explicit a number of recurring costs that are only implicit when you own. E.g. heating/cooling, maintenance, landscaping, accumulating an emergency fund, etc. Thus, if a condo is half-renting, so is buying a house.

My condo owning friend got a special assessment of $40k to replace the siding. There are A LOT of costs which are not explicit when owning a condo.

Any good realtor will look into the maintenance history of the building and let you know if a special assessment is likely soon, and any good condo board will be transparent with you about this as well.

Re: My thoughts on renting versus buying

#287

Post by projectazorian »

jjav wrote: post #261
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…

> If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. This is so often missed by those who compare rent today vs. mortgage today. Of course the mortgage will be higher. Today . Look into the future. Rent will only ever go up. Mortgage will only ever go down, both in absolute terms (due to opportunistic refinancing), and due to inflation, and proportionally due to your earnings inc…

> Mortgage will only ever go down, both in absolute terms (due to opportunistic refinancing)

If you bought a home during ZIRP, this doesn't apply. Even now, you're looking at cutting your rate by what, 2-3% max? And if rates drop by that much, the economy is probably bad. Hope you're still employed.

> and due to inflation, and proportionally due to your earnings increasing over your career. These three factors will erode a mortgage into nothing.

You must live in California and benefit from Prop 13, congrats. In the rest of the country property tax makes up a significant part of housing cost that only gets larger as your mortgage decreases. Property tax also increases over time in proportion to housing cost inflation and the local government's fiscal policy. Any improvements to your home increase your assessment as well. (Not sure if you have noticed but the quality of governance in the US is...not great, and many markets can expect double digit percentage increases in property tax over the next decade.)

Now you might say "yeah but this applies if you rent as well." Not as significantly for a few reasons:

- Smaller landlords will often eat the tax increase given the cost and risk inherent in switching tenants. Any rent increase incurs the risk of needing to find a new tenant.

- Larger landlords have access to sophisticated tax advice that you won't have as an individual homeowner. They also probably have a real estate law firm on retainer to contest changes in assessed value.

- When your locality jacks up property tax by 20% because they can't fund gold-plated public employee pensions for boomers, if you rent it's a lot easier to just move.

Re: My thoughts on renting versus buying

#288

Post by carlosjobim »

const_cast wrote: post #279
carlosjobim wrote: post #270

Earlier quoted context omitted.

Paying rent is the same as paying 100% interest. You lose everything you have paid, it counts towards nothing for you. Paying a mortgage, you pay part amortization and part interest. Even if only 10% of your monthly payment is amortization each month, it's better than paying rent. > If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the…

The main difference is that you can invest the difference in renting vs owning, and you might come out on top in the long run. It depends on the housing market, the stock market, and where you are.

How do you invest a negative amount of money into an asset? Because the difference between renting and owning is always a net loss, a negative value each month.

Re: My thoughts on renting versus buying

#289

Post by rurp »

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…

Yep, owning gives you a lot more control over your living situation. I do think the financial case is really overrated, especially if you get hit with some expensive repairs, but that's not what I like about owning a house. A lot of people, including myself, have had some really nasty scrambles when a lease didn't get renewed like they were expecting and suddenly had to move in a hurry. That can really suck, especially if it happens at a bad time like with a new kid or sick relative.

Owning also lets you invest in your space a lot more, and I'm not really talking about fancy remodels that cost tens of thousands. More like smaller projects like adding a nice catio, buying workout equipment that fits your space, or setting up a nice home office in a dedicated room. My partner and I held off on all sorts of purchases and projects like that while we were renting because each would have been a huge hassle to move, and might not have fit in the next place we lived. The costs are manageable for a long term improvement, but I wouldn't want to toss one out in a year. Now that we own a house we have have gone ahead with a lot of those additions and they make our living situation much more pleasant.

Re: My thoughts on renting versus buying

#290

Post by cloverich »

jvanderbot wrote: post #52

When my computer was getting too loud, I took a drill, made a hole to the closet, and moved it in there and ran the cables through the hole. When I didn't like mowing the hill behind my house, I had a retaining wall put in. Also preserving the elevated deck. When I found i didn't like the elevated deck, I build a new ground level one with my father in law. I'm not sure I like entering into the kitchen so I'll probabl…

The key is to make that decision based on your preferences, and not simply by going with the generic advice to buy a home from a purely financial perspective. Many people do this (take the generic advice). Many people in this comments section by their own declaration (explicit or implicit) haven't done the math. It's really kind of shocking, at least to me it was. I was stressed we could not afford a home in our area, then I did the math and realized by renting, I'd come out _very_ far head. For me it's not about wealth but financial independence and stability. At our current earnings and rent, if we continue renting, and I were to lose my job, I could cover our expenses in our area _for years_ (even if our rent increases 50%). If we buy, I'd need to sell within 6-12 months and if the home had dropped in value (like, at all), I'd be potentially underwater. So the bit that sounds more stable (buy the home) can easily be less so, and in practice _is_ less so for many people.

While I would absolutely love to purchase a home (for your reasons), the reality is I have more stability for my family (particularly my kids / school) by renting for at least the next 5 years, but very likely throughout their school.

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