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[Sigmapolis]

Common sense here, I'm talking about renting vs owning the exact same property. If you are renting it, you will have a landlord that does own it, and guess what! He owns it as an investment and therefore charges an amount in order to profit beyond paying the mortgage, taxes, upkeep etc. And, the real value is not in your monthly savings of owning (which you will have!). The real value is the equity gained over time - which appreciates over the life of a 30 year mortgage. Plus, in years 30-50, there is no mortgage payment for the owner, yet the renter is still paying rent each month.

You are assuming one either rents or owns the same property.

That does not have to be the case.

Most of my savings from renting have come from renting smaller than I would buy when, if I buy, I have to buy for future "peak demand" for floor space.

My needs while single in my 20s and now married without children, but with some on the horizon in the next 3-5 years, are very different than each other. My space location needs when you (do not need much, do not care about the school systems) when young are very different than when middle-aged (need a lot of space and good schools), so you have to overbuy early in the cycle of your ownership of the property, costing you a lot of potential capital.

If I bought at 25, and unless I want to have a ton of transaction costs in moving that are not there when you are simply renting, then I would need to "over-buy" on capacity (likely for a single-family unit instead of for an apartment like I have been doing) and eventually grow into it, which then becomes your life situation later down the line when you are ready.

We have to talk about this in three-dimensions.

History says property has about a real return of 1%...

https://www.cbsnews.com/news/history-says-home-real-estate-is-a-bad-investment/

...and that is before the upkeep and sweat equity that goes into it.

I think those two can very easily make that return 0% or less.

If you rent small, take what you save it get a reasonable return from equity markets, that compound interest is going to work out real nice for you.

 

[robkuhl588]

You are assuming one either rents or owns the same property.

That does not have to be the case.

Most of my savings from renting have come from renting smaller than I would buy when, if I buy, I have to buy for future "peak demand" for floor space.

My needs while single in my 20s and now married without children, but with some on the horizon in the next 3-5 years, are very different than each other. My space location needs when you (do not need much, do not care about the school systems) when young are very different than when middle-aged (need a lot of space and good schools), so you have to overbuy early in the cycle of your ownership of the property, costing you a lot of potential capital.

If I bought at 25, and unless I want to have a ton of transaction costs in moving that are not there when you are simply renting, then I would need to "over-buy" on capacity (likely for a single-family unit instead of for an apartment like I have been doing) and eventually grow into it, which then becomes your life situation later down the line when you are ready.

We have to talk about this in three-dimensions.

History says property has about a real return of 1%...

https://www.cbsnews.com/news/history-says-home-real-estate-is-a-bad-investment/

...and that is before the upkeep and sweat equity that goes into it.

I think those two can very easily make that return 0% or less.

If you rent small, take what you save it get a reasonable return from equity markets, that compound interest is going to work out real nice for you.

Your initial argument was that the real return on a house is less than 1% and therefore having a mortgage isn't beneficial to one's net worth. My point is that doesn't take in to account the value of owning a house over renting it. You are right that one could possibly save by renting something smaller than they might buy. You could save even more by simply living in dumpster if you found it suitable. I appreciate the time you took in responding but you failed to prove your original point and merely changed the discussion into a new debate which I have no desire entering into. GO CYCLONES!

 

[Tailg8er]

If you rent small, take what you save it get a reasonable return from equity markets, that compound interest is going to work out real nice for you.

I've known about 6 people in my life who have rented smaller than they needed/wanted, and MAYBE 1 if them who invested the 'savings' into equity markets. Not saying it's not possible, but I feel you're comparing the best possible renting scenario to a close to worst possible owning scenario.

More likely, imo, someone rents something close to what they'd pay for a mortgage.

 

[Sigmapolis]

I've known about 6 people in my life who have rented smaller than they needed/wanted, and MAYBE 1 if them who invested the 'savings' into equity markets. Not saying it's not possible, but I feel you're comparing the best possible renting scenario to a close to worst possible owning scenario.

More likely, imo, someone rents something close to what they'd pay for a mortgage.

Fair point. I just know what I did.

Considering how the market for equities did relative to housing in the 2011-2012 through current range, I am pretty sure I am pretty far ahead.