Comment by fweespeech | Hacker News Reader

Comment by fweespeech | Hacker News Reader

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> Most people would find a way for that surplus to turn into lattes, vacations, new cars, and large TVs rather than into shares of VTSAX, so for them, homeownership is a good idea, not because it's a better investment than equities, but because it's a better savings vehicle than nothing.

This is often not true.

I know its a popular belief with alot of millennial but anyone who has looked at a rent buy calculator quickly realizes for many areas (not the bay area / inflated housing markets beyond what the fundamentals support) buying still makes more sense than renting.

For instance, I'm considering a $325k purchase in an area where the equivalent rent is $1700/month.

https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

Even with correcting the variables, the break even point is ~$1400/month if I sell in 5 years.

That is ~$3600/year in savings over 5 years or about the cost of replacing my car in the next 5 years.

There sure are many situations where buying trumps renting. The point in general is that buying is often overvalued and renting is undervalued.

One thing this calculator also cannot take into account is risk: if you lose your job, or get hit by an economic crisis like the one on 2008, you have an added catastrophe. But even discarding that, there are always situations where its better to buy.

> One thing this calculator also cannot take into account is risk: if you lose your job, or get hit by an economic crisis like the one on 2008, you have an added catastrophe. But even discarding that, there are always situations where its better to buy.

Of course. But if you invest your money you take the same risks also. There is a limit to how much risk you can really avoid long term.

I've lived in houses before, stuff tends to break over time....keep that in mind. As long as more than $3600 worth of stuff doesn't break within 5 years you are good. Probably depends partially on the age of the house.

1) Read the web page I linked to.

2) It includes maintenance in that calculation as well as investment returns and a number of other items.

3) Please stop wasting other people's time because you are lazy. Its quite rude.

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