murksiderock
Superstar
I was asking where in 757 you're at because you can rent homes in VB for less than you stated and they are in good neighborhoods, in great locations, and quality homes...
Renting and reinvesting the savings from renting, will outperform owning and building equity
- Thread starter Robbie3000
- Start date
I was asking where in 757 you're at because you can rent homes in VB for less than you stated and they are in good neighborhoods, in great locations, and quality homes...
WaveCapsByOscorp™
2021 Grammy Award Winner
It definitely depends on your personal situation. Like, if you’re making enough, it makes little sense not to invest in owning a home unless you’re investing in something else that’s making money back for you.
People should start looking at Single Family Homes as a living expense rather than an investment, IMO. It’s easier to compare the living expense of renting vs owning because your opinion is not tainted with the “investment” BS. IMO if you don’t have a tenant/tenants, it ain’t an investment.
Depends on where you are.
When thinking long-term, as most of us should be, buying simply makes more sense. The idea that one can invest the monthly savings of $100 - $300 by renting instead; and come out ahead is a big gamble. The image below is a summary of a comparing renting vs buying over 30 years. They assumed a house purchased for $260k would eventually be worth $1M after 30 years based on historical appreciation. Even cutting that in half, having an asset worth $500k after 30 years beats having no asset after 30 years. Keep in mind that both the renter and buyer will have incurred about the same costs over those 30 years, even after the perceived monthly "savings".
The cost of homeownership vs. renting | Mortgage Rates, Mortgage News and Strategy : The Mortgage Reports
Other valuable information:
This article is making a huge assumption about how much the house is going to appreciate. $260 to $1M in 30 years will not happen in most markets.
Meanwhile, 10% growth in the market is a very reasonable assumption.
This strategy has been paying off for me over the last few years. Instead of paying someone else 3.5% interest, I’ve been making 20%-30% off my reinvestments.
dora_da_destroyer
Master Baker
firstly, you’re looking at investing all wrong. Diversified investing means owning all different classes of assets - cash, stock/bonds, real estate and other appreciables. So great, you own stocks/funds, what else?
No doubt returns have been great the past 3-4 years, but a downturn can easily wipe that out, something you’re not accounting for, especially when stating things like 10% return is reasonable (this is not the average person’s return given most people are in the market due to their 401k and don’t know a thing about investing). A 3-4 year recession plus the 2-5 years it takes a portfolio to recover sets you back completely while you could have another asset class continuing to appreciate - as long as the recession isn’t caused by a housing collapse, yet even so, this is why I say buy multi family.
If you don’t have a family, or don’t have a big family, no need for a SFH as young person. Buy a duplex or triplex, when he market crashes and people lose their homes, they still need a place to live and you’ll have supply to offer.
the bossman
Superstar
I hate when people say this. Unless you staying in one of the units of your multiunit complex your home is not an investment.
WaveCapsByOscorp™
2021 Grammy Award Winner
Actually, in certain markets and based on what you do for a living, it is.
people Airbnb their homes because they have lifestyles and jobs that take them all over the planet for extended periods of time.
If you don’t think of your home as in an investment in that instance, I’d say you’re shortsighted...
Finances really is about juggling your money the best.
Understanding money is like a super power most dont master
Froggle? Is dat you?
Yes because at that point you’re a landlord with a short-term rental property. The point is that buying a single family home and living in it should not be seen as an investment, it’s a living expense. It doesn’t become an investment until you rent it out or sell it.
30 yr mortgages 
WaveCapsByOscorp™
2021 Grammy Award Winner
You’re contradicting yourself in your statement; you can’t agree with my point then backpedal and start talking about alternate points or reasons as to why or why not you’d buy a house.
it’s either my point is correct in assumption or you’re trying to make a different argument on a different case. I said from the beginning you can look at it as an investment if you have certain things going for yourself in life. That point stands.
if you don’t, then my thoughts don’t apply
makes me wonder why people even both quoting my responses if you didn’t bother to read everything I wrote...
Don’t be a condescending a$$hole dude.
Most of my investments are in my 401-K which is highly diversified.
Let’s also not act like recessions don’t wipe out home values as well.
Third, in the case of a downturn, I’ll just keep buying more for cheaper. I’ll regain my losses at some point.
Fat Fred Jones
Reticent
Are you ignoring the long term costs of renting? They are nearly identical to buying, but without the benefit of any equity. A buyer can invest the same amount of money a renter is investing. Even in my post, I cut the appreciation in half.
To make it clearer. A buyer saves $30k in payments over the course of 30 years. That's real money that can be invested, but they don't gain the (very conservative and well below historical) $500k in equity. Could be $1M. It will take a lot of luck to return that from $30k.
Edit: Actually the renter spends $30k more than the buyer over that time, but I'll leave the way it is above just in case the renter was somehow able to beat the average rent over that time period. Even still, the point stands.
Last edited: