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Comment by FirmwareBurner | Hacker News Reader

>you're better off just renting it and saving the difference

Saving significant amounts of money while renting it's a luxury many people don't have.

Owning your own property is also an insurance against old age poverty. You can pay current market rent with your salary, but you won't be able to with a state pension.

If you pay off your property by the time you retire, it's basically free rent after that. Meanwhile you're paying your landlord's mortgage and owning no asset at the end.

Your math works if you "win the lottery" and get some rent controlled apartment way below market rates, then it makes sense to keep renting and investing the difference somewhere else instead of owning.

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In other words, a mortgage is another way to save money for retirement. Anybody who can afford to save money can save it either by assuming a mortgage or renting instead of buying and putting the difference into a retirement fund.

Those who can't, can't.

>> Those who can't, can't.

That is a social problem so, because those who can build generational wealth with all that comes with it (health, education, financial stability). Those who can't, don't. And that is a serious problem, IMHO.

I think the main difference is that a lot of people simply don't have the discipline to really save money by themselves. If they're renting, the majority won't save the difference, they'll just spend whatever's in their bank account.

A mortgage is forced savings, and that makes all the difference in the world, for a lot of people. It's not as clear cut as "those who can't, can't". Plenty who can, won't, unless they're forced to by a mortgage or mandatory pension contributions.

> a lot of people simply don't have the discipline to really save money by themselves.

To the extent these people exist, they are the people who get burned by homeownership the quickest though.

> In other words, a mortgage is another way to save money for retirement.

Yes, but that's missing an important bit: It is saving for retirement using the money that otherwise would disappear into rent.

If you had the option to live for free somewhere vs. buy a house, it'd be clearly far better to live for free and invest all the money for retirement. But rarely anyone has that option. It is really between spending that money on rent (money is gone) or spending it on a mortgage (build equity).

That's a bit simplistic. Rent is 100% gone, but the interest payments of the mortage is also gone. Plus additional cost to buy is about 10% in Germany and you have oppertunity costs on the down payment.

If you pay off your property by the time you retire, it's basically free rent.

Until property tax in some states.

>Until property tax in some states.

In most EU countries, property taxes on apartments are laughably small compared to the benefits of full ownership.

Is it free rent?

Property taxes and maintenance of a large house in can cost as much as renting an apartment.

We're talking about apartments here. Most (European) people can't afford to buy houses. Only Brits and Americans seem to default to houses, but in Europe apartments are more popular.

Not in Germany. Unless your house is a castle or something, I hear those are a money sink.

A lot of old people can't afford the upkeep of a house though.

An apartment is not a house. Upkeep for an apartment is reasonable. You're paying for the upkeep if you rent anyway since it's included in the rent, except you're paying to upkeep something you don't own..

Fine, but they can still sell it for a lump sum and rent. Thus it truly is like retirement savings.

Further, a mortgage uses other people's money as leverage on an appreciating asset. Of course it's not always a great deal, but here in the states, inflation and low mortgage rates generally combine to make this a killer deal -- if you can actually get in the market at all that is.

> If you pay off your property by the time you retire, it's basically free rent after that.

property taxes, maintenance, ...

Those are always included in your rent anyway, even if it's not obvious to you. Landlords like to at least break even, otherwise there would be no point in renting it out.

Any kind of extra regulation or extra cost for landlords, will be reflected as an automatic rise in rents. If you try to artificially cap the rise in rents the result will be a shortage in rental units. I'm not a big fan of the "free market" for housing, but there's no free lunch for tenants.

OPs landlord seems to be the exception to that so. If we believe OPs maths.

Those things are cheaper than paying the equivalent of a mortgage payment plus those things.

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