| ▲ | zeroq a day ago |
| Counterpoint: buying is always better, people just can't afford it. Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. But after you pay your mortgage you still have an asset in your hand. You can pass it on to your children or you can sell it when you're old, downsize (or even rent) and get some cash for your retirement.
If you rent you're left with nothing. Then why is not everyone buying? Because few people can afford the 20% downpayement needed for mortgage. In reality it's even more because you have to furnish and/or renovate the place. Renting has it's charm for youngsters, but once you get older and you start acummulating things the lack of stability and the danger of your landlord having a change of heart and breaking the contract (either because he decided to sell it or give it to a child) becomes a pain in the ass. Even having a pet is troublesome and many property owners will refuse to rent if you have a dog or a cat. |
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| ▲ | wavemode a day ago | parent | next [-] |
| > If you rent you're left with nothing. Well, no. You're left with the cash you would've spent buying a house. Whether that's financially better or worse, depends entirely on the mortgage interest, taxes, and maintenance costs of the house, as well as the money you could have earned investing the cash elsewhere, compared to the rent you would have spent over the same time period. |
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| ▲ | whymarrh a day ago | parent | next [-] | | You’re right, the math is slightly more complicated than rent v. mortgage payment. Ben Felix, a popular financial YouTuber, made many a video about the math: https://youtube.com/watch?v=j4H9LL7A-nQ
https://youtube.com/watch?v=lBG-g1CKfgs | |
| ▲ | estimator7292 a day ago | parent | prev | next [-] | | When renting a 1br costs as much as my mortgage on a 3br, I don't think that really tracks. | | |
| ▲ | klipt a day ago | parent | next [-] | | Depends where you live though. In the SF Bay Area, buying requires a monthly payment several times larger than the rent for an equivalent place. | | |
| ▲ | crooked-v a day ago | parent [-] | | The Bay Area market is a bizarre one because of how Prop 13 and extremely thorough renter protections lead to perverse incentives for everyone. | | |
| ▲ | HaZeust a day ago | parent [-] | | Denver is like it too, what's your prescription there? |
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| ▲ | phil21 a day ago | parent | prev | next [-] | | Sure, but this is not universal. I could have bought 15 years before I did. But because rent was less than half a mortgage (not even including maintenance), I was able to put that extra money into the market and save enough for more than a down payment on a forever home vs starter home when I was ready. It’s certainly not like for like, but it would have been a poor financial decision to buy vs rent. Where I live now this math is more or less inverted. Makes more sense to buy vs rent. In the end your primary residence is a lifestyle decision, not a financial one. It’s not an investment in the traditional sense. It’s speculation at best. | |
| ▲ | sothatsit a day ago | parent | prev | next [-] | | "If I set up a scenario largely in favour of buying, then buying makes more sense" I have never seen a 1br costing anywhere near as much to rent as a 3br costs to buy. In what markets is this even remotely close to accurate? Or are you just ignoring the cost of ownership entirely? | |
| ▲ | refurb a day ago | parent | prev [-] | | But a mortage isn't the only cost of owning. Property taxes, maintenance, possibly utilities. |
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| ▲ | zeroq a day ago | parent | prev | next [-] | | that's true only if you were homeless | |
| ▲ | carlosjobim a day ago | parent | prev | next [-] | | What? That cash goes to the landlord. | | |
| ▲ | foxglacier a day ago | parent [-] | | In the same way the interest payments on a mortgage go the the bank. And the interest is often the majority of the payments people make on a mortgage. If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose. | | |
| ▲ | carlosjobim 20 hours ago | parent | next [-] | | Paying rent is the same as paying 100% interest. You lose everything you have paid, it counts towards nothing for you. Paying a mortgage, you pay part amortization and part interest. Even if only 10% of your monthly payment is amortization each month, it's better than paying rent. > If you're renting, in a market where rents are about the same or lower than mortgage interest, then you keep the leftover cash that the buyer put into their house and you can put into whatever investment you choose. Such a market doesn't exist anywhere on this planet. Rent is always higher than mortgage + interest. | | |
| ▲ | const_cast 17 hours ago | parent [-] | | The main difference is that you can invest the difference in renting vs owning, and you might come out on top in the long run. It depends on the housing market, the stock market, and where you are. | | |
| ▲ | carlosjobim 15 hours ago | parent [-] | | How do you invest a negative amount of money into an asset? Because the difference between renting and owning is always a net loss, a negative value each month. | | |
| ▲ | const_cast 13 hours ago | parent [-] | | No, it's not, not always is my point. We don't count the asset of having the home because we're comparing that part to the stock market investment. Made up numbers: consider: Mortgage: 2,000
Home price: 200,000
Difference from rent: -500 Rent: 1,500
Home price: 0
Difference from mortgage: +500 If (500/month invested over 30 years) > (200,000 appreciated home price over 30 years) then you came out on top by renting. It might be or it might not be. Also, the type of asset matters. Stock might be a more flexible asset than real estate, in which case you should probably rent depending on your location. | | |
| ▲ | carlosjobim 12 hours ago | parent [-] | | What I'm trying to say is that there is nowhere on the planet where the rent is less than the mortgage. So your situation is impossible, it simply does not happen. If it happened for 10% or 20% of properties, then I agree with your considerations. But it happens for less than 0% of properties. | | |
| ▲ | const_cast 11 hours ago | parent [-] | | 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 its own road requirements. Basically with, say, a 12 story block you can get hundreds of units for the same amount amount of land (and associate cost) as a few homes. And then you can spread the cost of municipalities, too. Even with just a duplex or dingbat you're looking at the same land costs and the equivalent accomodations as a few homes. But it doesn't scale linearly, meaning a duplex != the cost of 2 homes. Also large landlords (corps) can spread the cost of price across all their units. Meaning, like Walmart, some are loss leaders for competitive reasons and some make more money than they need to. Interestingly, the cost per unit continues to go down until about 12 stories. Then it goes back up, because of building requirements. Which is why commie blocks were historically 8 to 12 stories tall, it's the cheapest way to build housing. | | |
| ▲ | carlosjobim 10 hours ago | parent [-] | | 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. | | |
| ▲ | const_cast 8 hours ago | parent | next [-] | | 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. | |
| ▲ | foxglacier 3 hours ago | parent | prev [-] | | 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. |
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| ▲ | bluefirebrand a day ago | parent | prev [-] | | > In the same way the interest payments on a mortgage go the the bank Yeah, but at least you own something at the end of it > And the interest is often the majority of the payments people make on a mortgage Only if you're stupid and only ever pay the bare minimum. Of course many people unfortunately are |
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| ▲ | cramsession a day ago | parent | prev [-] | | Rents are pretty much always going to be higher than a mortgage for the equivalent housing. It's why people are landlords. He dances around that in the article by saying that people buy "nicer" places than they rent, but that doesn't have to be true. | | |
| ▲ | wavemode a day ago | parent | next [-] | | No, this really is not always the case when controlling for location. (That is, if you're comparing apartments in the middle of the city to houses in the outskirts, you're obviously comparing apples and oranges.) | | |
| ▲ | cramsession a day ago | parent [-] | | If you compare equally sized places, rent is pretty much always higher. At least it has been in every city/town I’ve ever lived in. Renting is not cheap, you’re paying a premium to the landlord. | | |
| ▲ | phil21 a day ago | parent [-] | | Not all landlords min/max for peak financial outcome. My landlord for 15 years raised rent exactly once when property taxes had a large jump one year, and was already under market when I started the first lease. His mortgage was long paid off and he optimized for least hassle vs max money. Worked out for both of us - I called him maybe once a year at most, and he had a decent passive income stream reliably come in without worrying about 2am phone calls because a $50 thermostat broke. He had a nicely appreciated property to sell in his eventual retirement. It was a 3BR place with a yard larger than I own now. Granted fit and finish is nowhere comparable, but I pay about 4x in mortgage and taxes than what I was paying him for about 1.5x the space. Such arrangements are increasingly more rare as everything becomes a finance game, but they can still be sought out and developed. | | |
| ▲ | bluefirebrand a day ago | parent [-] | | > Not all landlords min/max for peak financial outcome An enormous number if rentals are owned by private equity not by individuals, so rental markets are pretty dominated by landlords min/maxing for peak financial outcome |
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| ▲ | Esophagus4 a day ago | parent | prev | next [-] | | But a mortgage isn’t the cost of owning a house. Rent payments are the cost of renting. If you want to compare the costs of renting and buying, you need to compare renting=(rent payments + renter’s insurance) vs. owning=(mortgage payments + property taxes + insurance + maintenance and repairs + equity appreciation / depreciation) | | |
| ▲ | cramsession a day ago | parent [-] | | Landlords bake those costs into the rent price. | | |
| ▲ | Esophagus4 a day ago | parent [-] | | Too hand waivey and doesn’t tell the whole story - even with the carry costs “baked in”, renting is generally cheaper in the short run because those costs are lower anyway. > Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros in 2025, with the cost difference between the two growing in all but 12 of those metros since last year, according to Bankrate’s Rent vs. Buy Study. > Over the last year, the study found average mortgage payments (including principal, interest, homeowners insurance and property taxes) increased while average rents either declined or remained stable in nearly all the metros we analyzed. > Housing experts said the fact that it’s cheaper to rent in all 50 metros in 2025 is a broader reflection of rental and housing market conditions across the country. [1] https://www.bankrate.com/real-estate/rent-vs-buy-affordabili... | | |
| ▲ | cramsession a day ago | parent | next [-] | | That compares average mortgage and average rent, but the average house you buy is going to be much bigger (and include a yard) than the average rental. They’d need to compare equal properties to have a meaningful study. | | |
| ▲ | const_cast 17 hours ago | parent [-] | | The average home is also going to be in a very suboptimal location. If you compare homes and apartments in the same location, the gap grows even wider. Yes, $4,000 a month in Manhattan is expensive. But $4,000 might be JUST the HOA cost for buying in the same area. Never mind the 10 million dollar mortgage. (Spoiler: fake numbers, actually do the math for your city) |
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| ▲ | carlosjobim a day ago | parent | prev [-] | | > Average rents are cheaper than average mortgage payments The average mortgage is for a family, the average rent is for a broke young worker or student living in a much smaller and worse accommodation. Renting is always more expensive than a mortgage for the same housing unit, because the landlord needs to make a profit from his tenants. Cooking the numbers won't change reality. The truth beats all the lies, no matter how many lies. | | |
| ▲ | Esophagus4 a day ago | parent [-] | | The median renter is 42 years old. Even a basic Google search would have saved you needing to post that comment. [1]https://www.zillow.com/research/renters-housing-trends-repor... | | |
| ▲ | necovek a day ago | parent | next [-] | | > The median age of a renter is 42 years old and about half (46%) of renters are under the age of 40; only 10% of renters are in their seventies or older, and 15% are in their sixties. In other words, the age distribution of renters trends younger than the overall US population. Which tells us exactly what the GP brought up: renters are younger than buyers. | |
| ▲ | carlosjobim a day ago | parent | prev [-] | | Age doesn't matter. The median renter has smaller and worse housing than the median mortgage payer. For the same accommodation, renting is always more expensive than owning. |
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| ▲ | jandrewrogers a day ago | parent | prev | next [-] | | The carrying cost of a landlord is completely different than the carrying cost of a buyer with a mortgage. A landlord can charge a profitable rent on a property that doesn't even pay the mortgage interest if you were to buy it. This is a common case. I recently sold a house with a mortgage where my carrying costs were far below that of any buyer of the house, meaning I could break-even renting at a rate that would leave a new buyer losing thousands of dollars per month. You'd be an idiot to not rent in that market but there is no shortage of buyers. | | |
| ▲ | cramsession a day ago | parent [-] | | Landlords charge market rate. It has little to do with their costs. The | | |
| ▲ | jandrewrogers a day ago | parent [-] | | Of course. But as several people have pointed out, the market rate can be far below the equivalent purchase cost and landlords can still make a profit in those markets. There are many markets where the rental rates are far below mortgage costs for long periods of time. |
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| ▲ | tomjakubowski a day ago | parent | prev [-] | | Rent only has to exceed the property's operating costs -- things like mortgage interest, property tax, paying a manager, insurance, repairs and maintenance -- for the landlord to come out ahead. Paying off the principal is a capital expense. | | |
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| ▲ | abxyz a day ago | parent | prev | next [-] |
| Renting is expensive because people can’t buy, driving up prices. If buying were cheap because of increased supply, rent would be cheap too, and much more appealing for the practical benefits. The problem is housing supply, not buying or renting being expensive, that’s a consequence. |
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| ▲ | ghaff a day ago | parent | prev | next [-] |
| >Counterpoint: buying is always better, people just can't afford it. >Renting has it's charm for youngsters You're sort of contradicting yourself. So long as you think you're sort of settled in an area, buying is probably better. But, if it's your first job out of school, even if you have a nice bunch of money you could put towards a down payment, it's not clear that buying is a great idea except maybe if you're in an area with lots of jobs for your chosen profession. Once I bought, somewhat belatedly, I was in an area that offered enough possibilities in my (broadly speaking) field even if a couple commutes were on the long side. |
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| ▲ | cramsession a day ago | parent | next [-] | | If you're young and you buy, you could get roommates and have them pay rent. That would definitely tilt the benefits heavily to buying. | | |
| ▲ | const_cast 17 hours ago | parent [-] | | Obviously the risk of this is significantly higher than just renting. If you have your first job and therefore little to no liquid cash, and then on top of that you require tenants to make your mortgage, you're in a pretty risky position. That means that if just about anything goes wrong you can be absolutely fucked. | | |
| ▲ | ghaff 13 hours ago | parent [-] | | You require a job and you require tenants or you're not going to be able to pay your mortgage. |
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| ▲ | zeroq a day ago | parent | prev [-] | | Not really. If it's viable for you then buy your first property as soon as possible and keep saving. When you want to move just buy another and rent the previous one. In most cases people will need to get a half decent job and save for a few years first but they can keep saving and have enough for another property in few years. And if you really have to move - then you can still sell that property. People are getting new cars every 2-3 years and it's not that different from swapping real estate. | | |
| ▲ | mauvehaus a day ago | parent | next [-] | | This presumes that the value of the property doesn't go down. I had more than one friend who bought before the 2008 financial crisis who was pretty stuck with their home. And who the hell has a second down payment for a home after a couple years of mortgage payments, upkeep, and fixing the "surprises" one finds after buying a home? | |
| ▲ | ghaff a day ago | parent | prev [-] | | >And if you really have to move - then you can still sell that property. People are getting new cars every 2-3 years and it's not that different from swapping real estate. Of course it is. I think the average American car age is 11 years or something like that. But, if I wanted to swap cars like that, I can go into a dealer and basically transact it in 30 minutes. Good luck doing that with a house. | | |
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| ▲ | xboxnolifes a day ago | parent | prev | next [-] |
| It's not just being able to afford it. It's also how easy can you sell it. Basically, how liquid is the house, and how many expenses are there on the transaction, impacts how much it's worth to buy. My thought experiment is basically: If I get a new job in a new city, is it smart buy a house right away? And if the answer is not always "yes", then obviously buying is not always the best option. |
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| ▲ | malshe a day ago | parent | prev | next [-] |
| > Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage. When you own, the mortgage payment is the floor on your monthly cash outlay. by contrast, when you rent, the rent is the ceiling on your monthly cash outlay. So even when they are identical, homeownership is way costlier because of all the other costs one "forgets" to consider while making this comparison. HOA dues, home insurance, property tax, maintenance, etc. add up to thousands of dollars each year. As a renter, you don't have to consider any of these beyond your rent. |
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| ▲ | zeroq a day ago | parent | next [-] | | As a renter I don't pay property tax, but I do pay maintancene, insurance, utility bills and whatever else can easily attached to the monthly bill. The rest is baked into the cost. | | |
| ▲ | malshe a day ago | parent [-] | | It is baked into the cost and you know it up front. That's the ceiling I am talking about. | | |
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| ▲ | IncreasePosts a day ago | parent | prev | next [-] | | Sure, but on the other hand, when you have a mortgage (generally fixed interest rate for 20+ years), your biggest expense is guaranteed to stay static. What will your rent be in 10 years? Who the heck knows? | |
| ▲ | bluefirebrand a day ago | parent | prev [-] | | > As a renter, you don't have to consider any of these beyond your rent. As a renter, all of these are baked into your rent :/ | | |
| ▲ | malshe a day ago | parent [-] | | Not ALL. Besides, apartment management operates on a different scale altogether. Individual homeowners will never be able to match that. |
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| ▲ | jandrewrogers a day ago | parent | prev | next [-] |
| Where you live doesn't generalize. Where I live, interest payments alone exceed the rental rate for the same property even if you could afford a 20% downpayment. Those interest payments are a total loss. No amount of contortions can make those numbers pencil out where ownership is beneficial to the buyer. As it happens I now rent but I recently sold my house because it didn't make sense even though my carrying costs were far lower than any new buyer. By the time you pay off a mortgage, a renter could afford to buy the same property for cash with money left over. |
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| ▲ | dbish a day ago | parent [-] | | In NYC, an already expensive place to rent, a mortgage for a similar spot that I rent would be around double the monthly payment plus the 20%+ down. |
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| ▲ | rob_c a day ago | parent | prev [-] |
| > Because few people can afford the 20% downpayement needed for mortgage. Current state of the British economy is the state is looking to allow 40yr 5% deposit mortgages.
We're not quite there yet but it's heading that way. Be very thankful if your country isn't that bad! |
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| ▲ | shoo a day ago | parent [-] | | 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 up the Housing Loans Insurance Corporation in '67, to provide insurance for banks against the risk of borrowers defaulting, to support home buyers. In 1997 the Howard government privatised the HLIC by selling it to GE, and we've had a private sector for mortgage insurance since, compulsory if borrowers are borrowing more than 80%. Now in 2025 the current Albanese government is rolling out a scheme where the government will act as a public mortgage insurer again to allow first home buyers to buy with only a 5% deposit. I'm not quite sure what to think. I heard an economist interviewed who reckoned this was a great idea to make it easier for young people to get into the property market, arguing that Aussie homeowners historically hardly ever default on mortgages. But naively it seems like this is yet another change that is going to push up house prices even further by increasing demand, without doing something to increase supply. I also wonder if systemic mortgage default risk appears like it is lower than it actually is because Australia has been lucky enough to escape a major recession for so long. | | |
| ▲ | Panzer04 a day ago | parent [-] | | 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. | | |
| ▲ | shoo a day ago | parent [-] | | problem is, politically it is feasible for government to support policy that superficially appears to help home buyers, but also props up housing prices. like all these "give the first home buyers more money / access to loans / reduced stamp duty" policies a government with an actual serious policy to increase housing supply, which should cause housing prices to fall, might have a lot of trouble getting elected or staying elected (only 1/3 of australian households rent, but that'll increase over time due to wealth inequality) |
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