Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The real cost of owning a home

ericturner.dev

Post reply on HN
Print view View original

291–300 of 901 posts

Re: The real cost of owning a home

#291

Post by tristor »

Buying is cheaper than renting in most of the country, it's only in coastal markets with exceptionally high home prices that this isn't true. There's a basic formula you can use called "price-to-rent" that helps you calculate this for your area. Where I currently live I was able to buy a house for $285k that would cost $2500/mo to rent in the current market, which is an extremely favorable price-to-rent ratio. If the ratio is not over 20, it's better to buy in your market.

While it may not be well known to many, there are mid-sized cities all across the middle of the country where you can buy houses as cheaply as $150k in this year of our lord 2026, but rent generally will be no less than $1000/mo. Private equity and software like RealPage have had a nationwide impact of driving up rental costs, but this hasn't necessarily caused housing prices to skyrocket in places in middle America where there aren't a lot of natural reasons to want to move there.

So sure, owning a home might cost more than renting on paper in California, but that's not true in a lot of parts of the country. Even then, the financial aspects aren't the only parts that matter.

> My 1983 home had been used as a rental for years, so much of the maintenance had been neglected.

The author is acknowledging a reality without acknowledging it, also. Rentals are not well cared for. Most landlords do not keep up with repairs, maintenance, and improvements, and you are going to get to deal with the poor quality of living situation as a renter as a consequence. You get to control this when you own your home, and while it is an expense, it's a fair expense you can manage yourself.

Re: The real cost of owning a home

#292

Post by SirMaster »

readthenotes1 wrote: post #91

My house is twice the size of my last apartment and my utility bill is half. apartments just generally don't have as good insulation or as efficient HVAC at least where I live. The person also discounts the impact of horrible neighbors, stomping and barking at all hours of the day. That can happen in houses but they are not right next to you

I mean my heat is included in my rent, it doesn't change no matter how much I use it. I pay 650/mo in rent including heat and water and I have it like 75F in the winter...

Re: The real cost of owning a home

#293

Post by jandrewrogers »

zeroonetwothree wrote: post #114
cosmic_cheese wrote: post #12

On the other hand, renting comes with hidden (and some not so hidden) costs too. The main one for me is the inherent precariousness that comes with renting. You don’t know how much longer you’re going to be able to stay in your apartment, whether that be due to rent hikes or the landlord deciding that they want to give the apartment to their nephew or any number of other things. The constant low level stress of knowi…

Why not just sign a longer term lease? Most landlords would love that.

It depends on the landlord and type of place. A long-term lease comes with additional considerations for the landlord, mostly in terms of a long-term lease often requiring slightly different legals and a loss of optionality.

While I've had landlords that were not prepared for a long-term lease, I've never had an issue getting one anywhere I've rented. I've also had this work against me i.e. rents actually decreased halfway through the contract.

Re: The real cost of owning a home

#294

Post by no_input »

Some of us get lucky and it is financially beneficial. I bought my house right before the housing market spiked so the value of my house almost tripled. It has since gone down a bit but it will be a boon if I ever sell. The rent at the apartment I was at was equal to my mortgage payment but now if I wanted to rent that apartment, it is 4x my mortgage. I also have an EXTREMELY low rate (2.5%) because of my credit.

I save almost 6 figures of money per year of owning versus renting just because of timing. I guess the moral is: get lucky or optimize your living situation for how you want to live instead of worrying about cost (unless it's huge)

Re: The real cost of owning a home

#295

Post by Leherenn »

hylaride wrote: post #187
horsawlarway wrote: post #36

> I bought this house new, and didn't live there very long End of story. That's the entire conversation right there. Note how much money he made on the house he lived in for a decent amount of time... (~330k, minus minor investments on repairs) Renting is better than buying if you're not going to live in the house for any real duration (real meaning 5+ years). Otherwise... at least in the US... the financials around…

> Otherwise... at least in the US... the financials around 30 year mortgages and a target inflation rate mean buying is going to work in your favor. Yeah, subsidized mortgages (via government insurance and mortgage interest deductibility) tilt the market towards home ownership in most of the USA. Most of the rest of the world doesn't intervene in its housing market as much and the ROI on owning vs renting can shift.…

> I think this recently changed, though

Yes, it will take effect in 2028. Although that's unfortunate, it was a good tax to equalise tax treatment of owners vs renters.

The Swiss market is also different in many ways: no capital gains taxes except on real estate, which really shifts the invest against house appreciation towards renting.

> Basically farmers and the upper quartile of income earners are the majority of owners.

I'm not certain the second part is very true. Of course, given how prices are you need to be rich to buy, but I think the bias is a lot more towards age than income: those that own are overwhelmingly those that bought a long time ago or inherited.

Finally, rent control results in some crazy price to rent ratios in the big cities: Zürich is around 35. But as usual with rent control, it's if you can find the right place.

Re: The real cost of owning a home

#296

Post by conorcleary »

craftkiller wrote: post #287

> the total settlement costs were about 3% of the value of the home > That's $12,777.92 to get the loan. This is something I don't quite understand when people talk about homes: they just bought a $425,930 home. If they're getting a 30-year mortgage with a 20% down payment they will pay a total of $902k at current mortgage rates. The closing costs are such a tiny fraction of what you're spending. You wouldn't go into…

Some of these numbers need federal limits/maximums on them, at least in some categories of 'home'.

Re: The real cost of owning a home

#297

Post by intrasight »

craftkiller wrote: post #287

> the total settlement costs were about 3% of the value of the home > That's $12,777.92 to get the loan. This is something I don't quite understand when people talk about homes: they just bought a $425,930 home. If they're getting a 30-year mortgage with a 20% down payment they will pay a total of $902k at current mortgage rates. The closing costs are such a tiny fraction of what you're spending. You wouldn't go into…

> Same thing with property taxes

Without high property taxes, more homes would appreciate in real terms.

Re: The real cost of owning a home

#298

Post by jstanley »

Paracompact wrote: post #280
sdellis wrote: post #210

Earlier quoted context omitted.

I don't think that's good advice. I, and most people I know who have invested in home ownership over the past 30-40 years, have done way better than we could ever have in the stock market or 401k. It's way more tangible for people than trusting some index fund with their savings, especially if they can maintain the home, improve it, and do repairs mostly themselves. And bonus... when you sell, you don't have to wait…

> I, and most people I know who have invested in home ownership over the past 30-40 years, have done way better than we could ever have in the stock market or 401k. https://www.macrotrends.net/3072/us-house-price-index (~3x in the past 30 years, about 3.7% return per year) https://www.macrotrends.net/2324/sp-500-historical-chart-dat... (~15x in the past 30 years, about 9.3% return per year) This is in line with conve…

You're missing that most people are able to buy houses on borrowed money, so their housing investment is effectively levered up 10x or more, at least at the beginning.

It's not a choice between $1m in housing appreciating at 3% and $1m in stocks appreciating at 9%. It's a choice between $1m in housing appreciating at 3% or $100k in stocks appreciating at 9%.

Re: The real cost of owning a home

#299

Post by IshKebab »

jedberg wrote: post #164

The benefit of owning a home is almost always psychological, not financial. If you take the money you'd use for a down payment and mortgage and invest it instead (after paying rent) you end up in about the same place. But the psychological benefits can be huge. You have much greater control over the place you spend most of your time. You can change it to your liking. You don't have to worry about rent increases or ow…

Well, not historically because for a lot of the last few decades, house prices have gone up dramatically more than average investments. But it does seem like that is coming to and end and of course you can't make decisions based on the future.

Even so, there's still a benefit to owning which is that you aren't paying the agency fees, elevated maintenance fees, and landlord profit, which are all non-zero.

Re: The real cost of owning a home

#300

Post by intrasight »

no_input wrote: post #294

Some of us get lucky and it is financially beneficial. I bought my house right before the housing market spiked so the value of my house almost tripled. It has since gone down a bit but it will be a boon if I ever sell. The rent at the apartment I was at was equal to my mortgage payment but now if I wanted to rent that apartment, it is 4x my mortgage. I also have an EXTREMELY low rate (2.5%) because of my credit. I s…

Many people can make gains or even huge gains while still having the average real appreciation be negligible.
Post reply on HN