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My thoughts on renting versus buying

milesbarr.me

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Re: My thoughts on renting versus buying

#301

Post by const_cast »

carlosjobim wrote: post #300
const_cast wrote: post #299

Earlier quoted context omitted.

For most places in the US rent is lower than a mortgage. Primarily because: - multi-unit buildings are significantly more efficient in cost per-unit. The cost of a 1500 sqft apt and 1500 sqft home is not the same, the home is going to cost a few times more. Because it's on its own lot, with its own land, and it's on the ground, and it gets its only municipalities (gas, water, steam, electricity), and then it also has…

You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.

Right, I'm just telling you that's that's simply not true.

And, if you really want to compare apples to apples, you have to compare properties in the same area. Its easy to make housing look cheap when you compare upper Manhattan to New Jersey.

Suddenly that 4,000 dollar apartment looks pretty competitive when the alternative is 5 million mortgage + 3000 a month HOA.

Re: My thoughts on renting versus buying

#303

Post by Aeolun »

I-M-S wrote: post #205
Aeolun wrote: post #178

Earlier quoted context omitted.

I don’t know. The effect of many families with young children all going and buying a house at roughly the same time is absolutely a thing. My street was filled with children when I was young (newly built neighborhood), and the same thing is true again now that I’ve bought a house. The street is filled with parents and children at roughly the same place in life. It’s nice when the only thing you need to do to find pla…

I'm confused... How do young families coordinate where and when to buy a house with their cohort?

I think it’s more that that cohort is very likely to be looking at houses at the same time, and value the same kinds of things, so naturally they end up in the same place.

Our place is ‘far’ (10m walk, this is Tokyo) from the nearest supermarket, a bit small, but it’s also connected to a tiny street that allows kids to play safely, 20s walk to the kindergarden, 5m walk to elementary school, and there’s parks around everywhere. Apparently those are things that a lot of young parents value ;)

Re: My thoughts on renting versus buying

#304

Post by foxglacier »

carlosjobim wrote: post #300
const_cast wrote: post #299

Earlier quoted context omitted.

For most places in the US rent is lower than a mortgage. Primarily because: - multi-unit buildings are significantly more efficient in cost per-unit. The cost of a 1500 sqft apt and 1500 sqft home is not the same, the home is going to cost a few times more. Because it's on its own lot, with its own land, and it's on the ground, and it gets its only municipalities (gas, water, steam, electricity), and then it also has…

You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.

https://homes.co.nz/address/auckland/mangere-east/16-fleming...

Estimated rent: $600/week Estimated mortgage repayment: $1000/week

If you get a 30 year mortgage, more than $600 of that will be interest near the start.

I didn't cherry pick this. I just clicked randomly on a big city until I found one with both estimates available.

Re: My thoughts on renting versus buying

#305

Post by carlosjobim »

foxglacier wrote: post #304
carlosjobim wrote: post #300

Earlier quoted context omitted.

You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.

https://homes.co.nz/address/auckland/mangere-east/16-fleming... Estimated rent: $600/week Estimated mortgage repayment: $1000/week If you get a 30 year mortgage, more than $600 of that will be interest near the start. I didn't cherry pick this. I just clicked randomly on a big city until I found one with both estimates available.

That's an estimate from a third party with nothing to say on the matter. Now show me a real offer, where the rent is less than the mortgage for the same unit.

Re: My thoughts on renting versus buying

#306

Post by carlosjobim »

const_cast wrote: post #301
carlosjobim wrote: post #300

Earlier quoted context omitted.

You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.

Right, I'm just telling you that's that's simply not true. And, if you really want to compare apples to apples, you have to compare properties in the same area. Its easy to make housing look cheap when you compare upper Manhattan to New Jersey. Suddenly that 4,000 dollar apartment looks pretty competitive when the alternative is 5 million mortgage + 3000 a month HOA.

How do I get my point through? You can not compare houses to apartments. You can not compare between different regions. You have to compare the exact same unit, the exact same property. Why are you trying to shuffle the cards? Rent is always higher than a mortgage for the same unit.

Re: My thoughts on renting versus buying

#307

Post by const_cast »

carlosjobim wrote: post #306
const_cast wrote: post #301

Earlier quoted context omitted.

Right, I'm just telling you that's that's simply not true. And, if you really want to compare apples to apples, you have to compare properties in the same area. Its easy to make housing look cheap when you compare upper Manhattan to New Jersey. Suddenly that 4,000 dollar apartment looks pretty competitive when the alternative is 5 million mortgage + 3000 a month HOA.

How do I get my point through? You can not compare houses to apartments. You can not compare between different regions. You have to compare the exact same unit, the exact same property. Why are you trying to shuffle the cards? Rent is always higher than a mortgage for the same unit.

You can't get anything through because you're simply incorrect.

No, housing is not always cheaper, feel free to do some research. Its highly dependent on your city.

If you truly think buying is cheaper in Manhattan then I don't know what to tell you. You're just wrong, period.

What's happening here is youre comparing suboptimal housing to THE ABSOLUTE most expensive apartments you can find.

My parents do the same thing. "Oh housing is so much cheaper, imagine renting in Dallas!"

But... We're an hour and a half outside of the city.

The reason the housing is cheap is because nobody wants it.

Re: My thoughts on renting versus buying

#308

Post by blackjack_ »

carlosjobim wrote: post #300
const_cast wrote: post #299

Earlier quoted context omitted.

For most places in the US rent is lower than a mortgage. Primarily because: - multi-unit buildings are significantly more efficient in cost per-unit. The cost of a 1500 sqft apt and 1500 sqft home is not the same, the home is going to cost a few times more. Because it's on its own lot, with its own land, and it's on the ground, and it gets its only municipalities (gas, water, steam, electricity), and then it also has…

You are totally comparing apples to oranges. Rent is never lower than a mortgage, not in any single place in the US or in the world. For the same unit. What is the rent for a 1500 sqft apartment compared to the mortgage for a 1500 sqft apartment? The rent is always higher. What is the rent for a 1500 sqft house compared to the mortgage for a 1500 sqft house? The rent is always higher.

This is not true, because of timing, and mortgages with lower interest rates versus the current interest rate.

If I bought a house in the year 2000 for 200k, and still own it now, I might rent it out for $1200 per month (after refinancing in 2020 for a 2.8% loan on 50k or whatever is left on the mortgage), and still make a gross profit.

If the house were to be sold and purchased now in 2025, it may be valued at $600k or more. The mortgage on this house with 20% down would be like 3500 or 4000 per month after taxes and insurance.

So there is a huge plausible gap between renting and owning a property.

If you are arguing versus some potential mortgage in the past… sure. But you don’t get the mortgage of the past value, you get the mortgage of the current value with the current interest rates.

Re: My thoughts on renting versus buying

#309

Post by rob_c »

dbish wrote: post #273
rob_c wrote: post #272

Earlier quoted context omitted.

not in the UK. Which is why I asked. I can name 4 cities easily where you're paying mortgage+extra driven by the "buy-to-let" craze over here. I'll assume you mean the UK is a phenomena in that case.

I think the difference for the UK is it’s HCOL but low pay, so people there can’t afford the mortgage down payment as much, which is not normal for say American HCOL cities.

> the UK is it’s HCOL but low pay

_sigh_ don't remind me...

Re: My thoughts on renting versus buying

#310

Post by rob_c »

Panzer04 wrote: post #222
shoo wrote: post #174

Earlier quoted context omitted.

Interesting. Down here in Australia our economy has been doing OK, we've had a great run of dodging recessions, but due to house prices appreciating so much since the 90s, there's similar problems with house down payments being far out of reach of many people. Recently, our government is making a change to allow first homebuyers to purchase properties with only a 5% deposit. Historically the Australian government set…

There's some pretty poor economists out there, and don't underestimate ethe ability of journalists to find someone conforming to their biases. I think giving the government an interest in keeping house prices high is an awful idea and we should get over this obsession with homeownership.

Problem in the UK is the economy is held up by the housing market, foreign students and pandering to the boomers who hold most of the liquid assets. Maybe the fourth leg on the stool is the London economy but that's more generational and systematic wealth than consumer or liquid assets.
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