Zo simpel is het niet. Je kunt de betaalde huur niet vergelijken met de hypotheeklasten. In dit goede boek wordt dat alles uitgelegd: https://www.amazon.com/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Sowieso kun je waarschijnlijk in de huidige markt veel meer huis krijgen voor 1500 aan huur, dan voor 1500 aan hypotheek laat staan totale lasten…
I owned a house. OWNED it (i.e., no mortgage). Regular maintenance was a lot of work, and unexpected surprises (roof, appliances, furnaces etc.) costly. I sold, and my cost to rent is now less than my average monthly maintenance cost (including property taxes, utilities, insurance etc), AND the ROI from the proceeds of the sale more than cover my rent. Been doing it for about 7 years, plan on doing it the rest of my life. The Wealthy Renter is a great resource that really opened my eyes and saw what a waste of money owning and tying up all my capital was.
Awesome I wish you the best.
In the meantime I highly recommend you check out this book. The Wealthy Renter This book has helped me speed up my FIRE journey. It’s from a Canadian perspective but can totally be applied to the USA (I’m assuming you live in the USA)
There’s nothing wrong with buying a place you can afford. You might be surprised how much money you could save renting in the long term. Cheers!
There's pros and cons of each.
Personally I think the biggest factor is actually not a financial one, but rather what type of lifestyle you want.
Renting offers more flexibility, less headache of dealing with potentially costly issues, money not tied up in real estate.
Owning offers the free of having your own place to do what you want (though somewhat limited if you live in strata), equity, some degree of ensuring your cost of living doesn't go up as much (like rent), etc.
I'm more of a pro owning guy, like most of PFC, but there are arguments to be made on both sides. Many do choose to be lifelong renters by choice. See this book: https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Read the wealthy renter: https://www.amazon.ca/dp/145973646X/ref=cm_sw_r_other_apa_i_dAEIFbJQ7TR6T
Before you make any housing move. Its an easy quick read. Really enjoyed it and learnt a lot. It might just change your mind about owning instead of renting. Goodluck!
There are a few reasons for me:
My dad is also encouraging me to focus on saving, and not bother looking for a place, so it's great that I have family support for what I am doing. He's got me to read a couple of books on the topic, and I'd really recommend The Wealthy Renter for more reading on saving money at a good rate while renting. It certainly requires more diligence, as a home you buy is a forced savings plan, as by paying your mortgage you're building equity, but it discusses that it isn't the only way to go about it.
We all need a place to live, so we are all "consuming" shelter, regardless of whether we rent or buy. Generally people buy houses that are more luxurious than they would otherwise rent - i.e. there's a tendency to "over-consume." And the opportunity cost of buying is that equity or cash used up in the deposit could instead have been used to invest in something, such as your proposed business.
Other than capital gains tax benefits (for a primary place of residence) and non-financial benefits (being able to renovate and not having to deal with a landlord), owning your own home is effectively no different to renting. You just happen to be "renting from the bank." Many people are now "rent-vesting", renting a less expensive place for themselves and buying a separate property as an investment.
I highly recommend reading the following book discussing the pros and cons of renting vs buying: https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X While it was written in the Canadian context, the principles apply anywhere.
I highly recommend reading The Wealthy Renter: https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Re: "paying rent for nothing" - You're always paying some form of 'rent'. To be super simplistic "Rent" is payment made for the use of something.
If I'm renting a house, the math is pretty obvious... my rent is whatever rent I pay, plus any utilities or insurance. My principle form of rent is the literal rent and is paid to the landlord. There's no investment I get from it, it's just money I pay to use the space.
If I'm buying a house, the math is less obvious. My rent is a combination of the financing interest, utilities, taxes, and maintenance+condo fees. Usually for schmucks like us the principle form of rent is financing interest (and condo fees) and is paid to the bank (and condo corp). There is also an investment I get from it - the mortgage principal payment, and any gain/loss in the value of the home.
If I own a house with no mortgage, I'm still paying rent. In this case, I'm paying the same utilities/taxes/maintenance fees as in #2, and I have another primary rent cost: opportunity cost. So for example, if my house is worth $300K, instead of having that $300,000 in an investment account making a conservative 5% annual compound return, I have it tied up in an asset (the house). The math is complicated and assumption laden, but in this scenario the simplest calculation of my opportunity cost rent is ($300,000 x 5% return / 12 months = $1250 per month). The investment I get from this is any gain/loss in value of my asset (aka house).
Sorry if that seems a bit pedantic, but I think it's an important linguistic distinction because we're always told (usually from our parents' generation) "don't pay someone else's mortgage with your rent". But the reality is that we always pay rent no matter what. What actually matters is being smart about the numbers and understanding your own assumptions and risk tolerance/comfort levels. I find most people who own really don't know their actual full cost of ownership or their 'rent' cost, but think it's worthwhile information to figure out and think about.
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X is a good book and in the Canadian market. I'm not going to buy anything on these prices, it's much cheaper and less risky to rent. Even having the money.
Hey don't feel scared - you are way ahead of a ton of people. I would rationalize a couple things and make a life plan/budget?
1) why do you want a house? You should read the wealthy renter. Its this great book written by a Canadian real estate economist who breaks down the market in each city and also explains the pro's and cons of renting vs buying. And the Canadian mentality. https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
2) Do the yearly breakdown for your financial goals. Like given where you are now at what point do you want to buy a house or have a certain amount invested? And understand that due to rise of cost of living and also housing prices that it may be difficult to buy a home especially on a single salary. So know that some of this, is out of your control. Like for example, a double income, no kids couple are obviously at an advantage but maybe you want kids and a house.
3) know that you are going to change, and your financial goals are going to change. Maybe in now you really want a house, but in 3 years your really want to travel or in 5 years its more important for you to live closer to family?
Just make sure you got that Emergency Fund, kill high interest debt, and follow the instructions of the about section of this subreddit first and the rationalize/plan your worries.
Easy. Lots of supply on rental market pushes rent prices down.
Limited demand on housing market pushes price to buy up.
If you don’t see capital appreciation on a house, makes no sense to buy it. Then you are borrowing money to buy a depreciating asset. Like financing a car.
It seems many people in this sub are financially illiterate and have not done any reading about personal finance and investing.
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
>no one advises to rent for life
Alex Avery
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
Read the Wealthy Renter by Alex Avery.
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X
> a reit doesnt give you a place to live. thats why property is better than owning a reit.
Depending on where you are located in Canada, the math may not work out as cleanly as you think it may. A book that you may want to check out (haven't read it myself):
Interview with the author on TVO:
> Meanwhile, nobody seems to be in a big hurry to come up with a solution. Politicians campaign on affordable housing platforms, but Generation Squeeze makes it clear that the foundation of those pledges is more than a little unsteady.
With home ownership out of reach for many families, I think we need to push for more rental buildings, with apartments large enough for families, and with affordable rents. (The disadvantage of renting a condo is that there's not much security - the landlord can always decide to live there instead of renting it out. So purpose-built rentals are better.)
I think there's a number of programs at all levels of government that are already pushing in this direction. At the federal level, for example, there's a Rental Construction Financing program that provides low-cost 10-year loans for rental projects that include 20% affordable units (no more than 30% of median household income in the neighbourhood); the Conrad project on East 18th is using this funding. It's $13.75 billion, so it's a pretty substantial program. The City of Vancouver is offering developers incentives to build rentals instead of condos. I haven't looked into provincial programs, but I expect BC has similar programs.
We should also try to preserve older rentals, like the low-rises near Metrotown that keep getting redeveloped - older rentals will have lower rents than new buildings.
What about home ownership?
As an investment, real estate actually has a lot of disadvantages. It's not scalable: with most investments, you can buy as much or as little as you want, but not with housing. There's no easy way to buy a fraction of a house. That means you need to take on a lot of debt, which is risky - especially when everyone else already has high debt levels, so prices aren't likely to be bid higher.
But when prices have been going up sharply, I think investors forget all that. They expect that prices will keep going up, and they pile into the market. Robert Shiller calls it a natural Ponzi scheme.
Maybe if prices keep going sideways for a while, investor expectations will correct themselves, and prices will deflate. I wouldn't count on it happening soon, though. At current price levels, I think renting and investing may be a smarter financial decision than owning.
I'd way rather be rent rich than house poor. Seems like some people don't understand this so this is worth it:
https://www.amazon.ca/Wealthy-Renter-Choose-Housing-That/dp/145973646X