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Comment by rainyMammoth | Hacker News Reader

That's a weird comment. Plenty of people are rich by your definition (could easily buy a house) but don't do it because it makes no sense financially. Most good investors are better off renting and getting higher returns in the stock market. Renting also allows you to move very quickly and you don't spend your time fixing things (i let my landlord handle it all)

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You can't get the same leverage nearly as safely or as easily in the stock market, which is why so many people start to play landlord with second, third, etc, properties that they finance.

What changed in the last year is that people want a lot more space which is pulling them out of the "expensive apartment" market and into the "house" market, while also being less concerned about commute distance. So the expensive apartments fall in demand while the houses go through the roof, without effecting the lower end of the rental market at all.

Even with the leverage, it is in most cases still not a good investment. There are a lot of calculator out there that shows you the break even point between renting and buying.

You forget all the horrible fees that come with owning a place (HOA, maintenance, property taxes, 6% lost to agents at every transaction)

For me, those calculators tell me I'm better off buying if I'm gonna stay for at least 5-7 years. Which is... not a terribly long amount of time, honestly. If I'd made the buying decision 5 years ago, I would've actually been much better off by then, because my rent went up way more than predicted. So of course there's a lot of uncertainty there. Maybe purchase prices will crash soon. Or maybe we hit a new normal and individual homes or spacious townhomes never come back down in price, due to shifts in demand.

My rent means that there are tens of thousands of dollars a year that I'll never be able to invest in anything. So even if I had a better investment option than taking a 5x (or more!) leverage multiplier on a downpayment, it would still have to overcome a pretty big disadvantage right there to come out ahead in the long run.

Buying is a near perfectly good investment (sadly). Selling is almost the only way to lose money in real estate.

I did this math recently for a real estate investment. We're in a pretty hot market, but not growing at anywhere near the pace of Atlanta or Austin. Suffice it to say that if the property appreciates at merely the inflation rate, it will have the same return as a typical index fund, with a better tax disposition.

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