Comment by astura | Hacker News Reader

Comment by astura | Hacker News Reader

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If we are using "anecdata" then I can say you'll never get your value out of your house - I personally know people who have sold their house for $5K, $20K, $30K, and $50K less than they bought them for. Hell, the entire city of Detroit, Flint, etc. has seen prices plummet so hard they are practically giving away houses and there is a huge arson problem - people are burning their houses for insurance money en mass.

In your "example", if you're very lucky and both buy and sell at the right time during a housing bubble then relocate to an area not experiencing a bubble, then maybe. (I believe you are severely underestimating the carrying costs of a typical house though, it's not just the big stuff.)

However, that's not even remotely close to the typical case. House prices rising fast enough to cover all those costs is indication of an unsustainable bubble.

https://inflationdata.com/articles/inflation-adjusted-prices...

>We can see that if you had bought a house at the peak in 1980 you would have lost purchasing power if you had sold in 1985 (not to mention transaction costs). And then for a little while around 1990 you would have been slightly ahead, but then through most of the 1990’s you would actually be losing money once again. So you’ve paid off half of your 30 year mortgage, you’ve paid taxes, insurance, maintenance, etc. and your house has not kept up with inflation!

You also have to keep in mind the economy of most towns and some cities is very, very volatile and depends heavily on 1-2 employers or industries. Those go away and there's economic collapse. When there's large economic collapse then buy buy home value.

(It's personal preference but I disagree with the idea of leaving family [besides spouse] any significant amount of money/assets when you die - most of my estate is going to charity upon my death)

I'm not sure what your point is. I claim that you get back more than 50% of your money more than 50% of the time. I believe the historical data nation wide agrees with that. When you rent, you get 0% of your money back. 0% is a worse return than x% where x > 0. 0% return is a lot worse than 50%. And there are plenty of people who get better than 100%, I'm not saying it's everyone, but it's a fact that it's common.

So which would you rather have? A 50k loss on your house after 10 or 20 years, or have spent 600k renting a place in San Francisco for 10 years and having 0 dollars back?

There are good reasons to rent, but the long term economic benefits are not one of them. There's just no comparison, and bringing up taxes and fees and repair costs and whether inflation matches, none of that makes a single bit of difference.

I think the point they were trying to make is that, even if you get a large portion of the sale price back, you don't generally end up with much more than if you had rented. Even if you make more than 50% of your money, as you claim is usually the case, this can be very comparable if not less than renting and investing the down payment in index funds.

If you can rent and invest, you can also buy and invest, right? The only way that renting is an investment advantage is the down payment, but you have to subtract your rent from your returns to see if it makes sense. In the example at the top of this thread, 6k/mo rent is 750k over 10 years. You have to have a very large down payment and very good returns consistently for 10 solid years to make that back.

"If you can rent and invest, you can also buy and invest"

Not necessarily, the less you put into the downpayment the more you pay in interest, the less the calculation makes sense.

I'm not disagreeing that there are many scenarios, likely including the 6k/mo example, that buying makes sense. What I take issue with, and I imagine other commenters did as well, is the idea that "When you rent, your money is gone. When you buy, you normally get most or all of it back later." This is far too simple, and there are many cases where the two are equivalent or renting comes out on top. It's easy to find such scenarios in the NYT calculator [0], even when you assume your house goes up in value.

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

I hear you, that's fair. Cheers!

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