re: CNBC: Renting can make you wealthier than owning a home

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Go read any thread on here about home repairs and you'll see one homeowner after another say that owning a home is just a series of expensive repairs over and over again

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That's an exaggeration

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owning a home is just a series of expensive repairs over and over again

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That's an exaggeration

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Meh, over 30 years there are very few parts of most homes that don’t need to be repaired and most need to be replaced.

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$250,000 loan. $82 K in an interest over 15 years, $180 K in interest over 30 years and that’s at 4%.

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This is so short sighted. The equity you gain by paying principle at the same time is way more than the interest. At 30 years the interest paid out may be 180k but you also will have $250k in equity that you own. And you deducted the interest every year on your tax return.

Let’s compare that to a renting example on same house. Rent is always a little more than what a monthly mortgage payment would be. This mortgage payment was $1,194 per mo. The rent would be at least $1300 per mo so let’s use that. If you rented this house at $1300 per mo after the same 30 year period of time you would have paid $468,000 in rent. Gone forever.

30 year Recap:

Own the home = lost $180k in mortgage deductible interest and your equity builds to $250k. You also own the house and no longer have to make payments to live there ever again.

Rent the home = lost $468k never to be seen again and you have to keep paying monthly rent to live there forever! Also the rent definitely went up over 30 years so the numbers are far worse than this in reality. The mortgage payment would not change over 30 years.

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And have flexibility to be bumble in changing employment, changing economies, changing family structure etc…

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Generally, yes. But just because you rent, it doesn’t mean you have complete flexibility all the time. What happens if you sign on for a 12 month lease, then 3-4 months later you get an out of state job offer or want to move into your significant other’s house? If the landlord won’t let you break the lease early, you’re kind of screwed and either have to delay your move or pay out the rest of the lease term. At least if you own, you can either sell the house and cash out that equity or you can rent it to someone else

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I have not been a renter in over 25 years. I am a bit tired of replacing roofs, plumbing, HVACs, well pumps, siding, decks, flooring, water heaters, etc. I am tired of yard work. I’m not sure how much I will have “made” after selling the home I’m in and a lot of it will depend if I put a value on all the time I’ve spent maintaining this house (it is at least a few hours every single week). Every time I get done with the yard work, renting an apartment seems more reasonable.

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I've been a renter for 2 years now after 10 years as a homeowner. Renting started as a necessity after a city move, but now it has become a choice for me. I don't have to lift a finger for maintenance or yardwork, and I've found that I have been happier with the smaller space.

Again, its just a life choice.

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That’s true, the obsession with home ownership is driven by banks. Renting is fine and the right option for a lot of people. Banks like to say you’re “throwing money away” on rent but that’s not true either. I own a home now but never felt like I was wasting money when I rented, we were able to rent a big house in a nice area where we could never afford to buy.

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Joke post

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CNBC: Renting can make you wealthier than owning a home

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Charlotte here trying to buy a house. Inventory has gotten a bit better this week, so we shall see.

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This is the problem with you and most of America staying poor and never building wealth. Instant gratification. Instead of keeping some of that payment you could afford as equity or future appreciation in home value upon sale, you gave it all away to a landlord just to live in something nicer in the short run. In the long run people who do this will retire later and later and never be wealthy.

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There's some truth to this obviously but the polarization of public schools and the crazy inflation of private schools changes the analysis for people with kids. Sometimes the hard choice is rent in the best public school district in the state (even if that means an apartment or duplex) versus buying in a neighborhood where your kids will be tossed into a jungle where learning is impossible and being a crime victim is a likelihood. What's the ROI for your kid getting a top tier education and better socialization? There's a reason that rich people send their kids to elite boarding schools or swanky local prep schools.