Comment by milesvp | Hacker News Reader

Comment by milesvp | Hacker News Reader

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This only works in some magical tax depreciation scheme. In reality, monthly mortgage costs in an area are going to be market driven as are rental prices for the exact same property, and while the two axis aren't completely orthogonal they are somewhat independent. My experience is that in any given year in most regions rent income will not cover house payments/taxes/upkeep without tying up absurd amounts of down payment. I finally bought the house I was renting and my mortgage alone is more than I was paying in rent. Only reason I did it was that it was a long term hedge on the 10% rent increases in my region that I'd been seeing and expecting for another few years at least. I'll let you know if it was a smart play in 30 years...

But not totally independent. Renting almost has to be more expensive than buying.

In a first approximation, if rent is much less than owning + expenses, the property owner will have to sell or go bankrupt, which will reduce property values. If rent is much greater, then property owners have an incentive to increase the rental market, lowering rents and raising property values. At a theoretical level, owning carries more uncertainty than renting.

Of course, weird circumstances can upset things: a decrease in acceptable uncertainty can cause rents to go up faster than the market can otherwise adjust, for example.

My past experience says that renting costs more than owning, but bit by much.

But I don't know what you think an inordinate down payment is.

Well in 30 years you'll at least own it. Would suck to be renting in your late 60's and paying for that on retirement income.

But you can invest the difference in something more liquid and diversified and use that income to forever pay your rent.

That's true, but most of the time it's just as expensive to rent than buy. You are paying the mortgage of your landlord, along with their salary.

Not really true, especially with multi unit housing. The mortgage is split between tenants. Rentals are generally also not responsible for fixing things like broken pipes or furnace repairs either.

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