Hacker News Reader

Comment by rendx | Hacker News Reader

> Some people choose to rent instead of buying because they don't want to deal with property upkeep (which is undoubtedly a bad deal, but one that some choose to make regardless.)

Is it? My understanding is that strictly return-wise, index funds are distinctly better than property value in most countries, especially if you factor in all the maintenance cost and risks. Some countries have pretty good tenant protection, which is another big factor in practice.

Separately: Personally, I've really enjoyed and benefitted from not having to deal with the complexities of ownership, and it is well worth it in my own time/money/hassle/annoyance calculation. My own time is the single most valuable asset I have; one could say: it is ultimately the only real asset I have. Everything else merely translates to that.

View on HN

The rent vs own argument is a detailed and deep one, and anyone who comes down 100% on "one answer" (even things like "house hacking") is likely missing something.

Index funds are almost always better than house appreciation over long periods of time; if you discount leverage - because it's "normal" to be leveraged 80% on a house, but you can't margin your index funds that high, and the government doesn't protect you from gambler's ruin on margin.

Owning usually tends to win out the longer you want (or have) to remain in the same location and same house, renting tends to win if you move relatively often (location or changing home type/size, etc) or if you're in a rental inversion (which much of the coasts are in).

At the extremes nobody suggests you should buy a house instead of renting a hotel room or AirBNB in a city you're visiting.

And it's not strictly a financial decision; it's also a personal one and people may choose the "financially non-optimal" because of other reasons.

This really depends 100% on how good your landlord is, over and above the tenancy protection you mention.

> index funds are distinctly better than property value in most countries

It's much easier to borrow £200k to buy a house than to buy stocks, and then you don't have to pay CGT on it. Housing is the only asset the general public can leverage gains on.

Land is not an investment (at least, not without explicitly improving the land). Buildings depreciate. If land (or the buildings on the land) are returning anything close to an index investment, an economy is seriously sick.

Edit: yes, you can rent the property out—but, societally, that's just shunting the problem down the road.

Reply on news.ycombinator.com