You commonly end up paying someone a lot of money who then turns around and gets underpaid subcontractors, of dubious employment eligibility status, to do the actual work.
If you’re going through the trouble of owning a home, it makes sense to do as much work yourself as you can.
That pays for a lot of contractor time.
Even if you have to take a line of credit against your house above your current loan amount, your equity is based on it's current value, and that's still a static price in the end.
That rent increases every single year, percentage based so it compounds, is asinine and literally only serves to make some holding company's line go up infinitely.
As long as the US has 30 year fixed rate loans, it will never be better to rent.
Plus, as a renter, I took the option of renting in a cheaper (unattractive) building with no amenities in an otherwise expensive neighborhood in a very expensive city, to be close to work.
If I wanted to buy a condo in the same neighborhood as I live in now, roughly the same layout, I’m looking at a monthly mortgage payment plus condo fees at least 75% more than my _total_ cost to rent where I am now, including utilities.
Is owning a home the financially responsible thing to do, generally? Yes. But owning a home is more money and more work than most people wondering about the decision realize, even if in the end you come out on top when you look at your bottom line.
And yet properties around you will have gone up by some average amount. When your landlord does raise your rent (or when you move out, as the pro-landlords keep telling us people love to do), the rent you will pay at the new place will have kept pace with the average raise.
- prevailing interest rates
- predicted future interest rates
- mortgage cost
- predicted house price appreciation
- predicted rent increase
- risk tolerance
- opportunity cost on passing on other investment options (e.g. stock market)
- liquidity
- how much you value your time
- how much you value the option of being able to up-and-go whenever you want
- property taxes
- property sales taxes
- and others
Seeing someone declare, with confidence, that one option is better than the other is a clear indication they've done close to no thinking about this decision.
If there's a scenario where long-term renting is cheaper than buying, then you're lucky because you've got a landlord that did not adequately calculate what rent should be.
The cost of ‘what if the roof caved in tomorrow’ or ‘what if the furnace blew up’ should be built into the rent.
Also, you're ignoring all the other factors I mentioned.
It's not unrelated - if the costs go up, they won't operate at a loss. They might sell to somebody who can buy it outright - but then many won't and just raise the rent. And then others can claim "muh market rates" to match them.
There's a shortage of housing in most places with jobs, so they have a large queue of people willing to pay through the nose. What are they going to do - live under a bridge? They will cut out most other expenses before they give up on housing.
Only two of those points weren't bullshit: the ability to up and move in the next year or the concern that you may be about to lose your job in the next few months. Anything else makes buying cheaper in the long run.
The market will bear a lot more than it should because the market doesn't have any other choice. As far as I'm concerned, people who buy real estate for the sole purpose of renting it out are financial vampires, sucking every last cent from their tenants, finding every justification for raising rents. You gotta be a cartoonish villain to raise rents just because your tenant got a new higher-paying job.
The absolute worst part of it all is how so many landlords have this savior complex, thinking they're providing a service that's good for the community. No no no. Landlords provide housing the same way scalpers provide concert tickets.
the only things that make sense is if you're planning to move in the next ten years and "risk tolerance", which is an issue if you expect to lose your job in the next few months.
or you can budget such that you could still pay off your mortgage on minimum wage - it won't be a big expensive house, but it'll be yours.