Is it better to buy or rent?
nytimes.com
Is it better to buy or rent?
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Re: Is it better to buy or rent?
#2I've always wanted a model like this to point people to. I don't have a dog in the buy/rent column, but I feel like most of these decisions are made without a regard for many pertinent considerations. The main one that bugs me is how long you will likely stay in a place. Completely disregarding market effects, if you're not going to hold onto it long then it's probably not going to work out.
Re: Is it better to buy or rent?
#316 hours ago: https://news.ycombinator.com/item?id=9741374
20 hours ago: https://news.ycombinator.com/item?id=9739544
393 days ago: https://news.ycombinator.com/item?id=7783201
1775 days ago: https://news.ycombinator.com/item?id=1586757
1884 days ago: https://news.ycombinator.com/item?id=1283190
Re: Is it better to buy or rent?
#416 hours ago: https://news.ycombinator.com/item?id=9741374 20 hours ago: https://news.ycombinator.com/item?id=9739544 393 days ago: https://news.ycombinator.com/item?id=7783201 1775 days ago: https://news.ycombinator.com/item?id=1586757 1884 days ago: https://news.ycombinator.com/item?id=1283190
Important comment from an earlier thread: don't ignore the human factor. Buying instead of renting forces you to live more frugal, which is a reason why people who buy are often better off financially when they retire.
Re: Is it better to buy or rent?
#516 hours ago: https://news.ycombinator.com/item?id=9741374 20 hours ago: https://news.ycombinator.com/item?id=9739544 393 days ago: https://news.ycombinator.com/item?id=7783201 1775 days ago: https://news.ycombinator.com/item?id=1586757 1884 days ago: https://news.ycombinator.com/item?id=1283190
Important comment from an earlier thread: don't ignore the human factor. Buying instead of renting forces you to live more frugal, which is a reason why people who buy are often better off financially when they retire.
> Buying instead of renting forces you to live more frugal
As a home owner, I'm going to ask someone to elucidate on this sentiment.
Re: Is it better to buy or rent?
#6It's good to get people thinking about all the things included in the calculator. Most people are totally clueless when it comes to the real cost/value of owning. They only see what someone bought a property for and what it sold for some time later.
A home you live in is almost always a net cost. It's not really an investment so much as its a cost avoidance (vs renting). Buying more house than you need "because this is an investment" is almost always a bad idea if you live in the home and thus are the one footing the bigger tax bill, interest, maintenance, utilities, improvements...
Re: Is it better to buy or rent?
#7It's good to get people thinking about all the things included in the calculator. Most people are totally clueless when it comes to the real cost/value of owning. They only see what someone bought a property for and what it sold for some time later. A home you live in is almost always a net cost. It's not really an investment so much as its a cost avoidance (vs renting). Buying more house than you need "because this…
> A home you live in is almost always a net cost.
Plus it "prevents" you from moving somewhere else. Or let's say, it increases the friction of moving somewhere else. Most home owners stay at the same place for the rest of their lives.
Re: Is it better to buy or rent?
#8Earlier quoted context omitted.
Important comment from an earlier thread: don't ignore the human factor. Buying instead of renting forces you to live more frugal, which is a reason why people who buy are often better off financially when they retire.
> Buying instead of renting forces you to live more frugal As a home owner, I'm going to ask someone to elucidate on this sentiment.
The idea is that you are contractually constrained to invest into a long-term asset (the house) on a monthly basis. In principle people who rent are paying less each month and should on average do just as well if they invest that money elsewhere, but in practice they tend to spent the extra money. Once they reach retirement, they have fewer assets.
Re: Is it better to buy or rent?
#9Does this take into account the risk of a housing market crash? For me, the biggest reason for renting rather than buying is to avoid putting all my bags in one basket; I wouldn't buy $500k worth of shares of one company, so spending $500k on a single house seems similarly risky.
Re: Is it better to buy or rent?
#10Earlier quoted context omitted.
Important comment from an earlier thread: don't ignore the human factor. Buying instead of renting forces you to live more frugal, which is a reason why people who buy are often better off financially when they retire.
> Buying instead of renting forces you to live more frugal As a home owner, I'm going to ask someone to elucidate on this sentiment.
Here is my take....
1. People think they can afford to buy a place at $X
2. People find a place at $X+Y and say "it'll be tough, but I love this place"
3. People find out actually owning a house costs $X+$Y+$Z and they can barely make their house payments and supporting costs
4. Eventually (after enough mortgage payments) your principal payments become large enough to take on the form of "forced savings"
I think this might work for some, but there are plenty of examples where people lose their homes because they underestimated the costs. Someone get sicks and goes on LT disability at 60% of their salary and end up missing mortgage payments.