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Comment by ChuckMcM | Hacker News Reader

This is probably a contentious topic, but housing security is a useful thing. Owning a residence, and perhaps more saliently owning it without debt, provides a certain level of housing security that is quite precious when you are older. The other benefit of owning property is that you can use it to generate income when you're not using it. While being a landlord is a pain, if you're willing to give up some of the return you can negotiate that out to a third party and that provides a bit of income security.

Sometimes having one less thing to worry about can be the difference between taking a risk that changes your life in a positive way and not taking it.

The bottom line for me is that I've never heard anyone say "I wish I had more things to worry about."

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I own a house. I can't wait to sell it. For me, the house is one more thing to worry about. On the other hand, my apartment lease gives me no worries.

If I was rich, I might like to own a house, but only for the freedom of doing whatever I want with it.

I cannot understand why leasing (or renting) can be considered superior to owning your own place. Sure it does prevent you from just moving on a whim - something i don't think people should be doing anyhow - but the money paid as rent is like throwing it into the sea!

Rarely true if you account for a decent return on investment on the difference between a mortgage payment and rent for an identical place.

I never find this answer convincing. Firstly, most renters are unlikely to invest the difference - we are a nation of spenders. Secondly, that rent will creep up, whereas my mortgage payment stays the same - eventually that difference will disappear, or even open up in the other direction. Thirdly, I'll have paid off my mortgage in another 12 years or so, at which point I can invest my entire payment every month whilst rent still needs to be paid. Over the time period I intend to stay in my house, I am confident I'll make out like a bandit compared to if I'd rented it.

Didn't we just learn that "investing" in real estate isn't always the best idea, either? Buying a house to live in on credit is part spending, part leveraged speculation.

Meh, I don't consider my house an investment (in that I don't expect it to generate a return), it's somewhere to live. Most people understand that a car is a terrible 'investment', but if you intend to drive the same one for a decade you're better off buying it than leasing it. Same thing, but different scale.

> the money paid as rent is like throwing it into the sea!

The same can be said of mortgage interest. The fair comparison to the renter with no savings is the homeowner owing the full value of the house to the bank, and the fair comparison to a mortgage-less homeowner is a renter with investments and savings equal to the price of the house they're in.

Better arguments for your position might be

1. Mortgage rates are lower than rental prices in many places,

2. Paying off a mortgage is "enforced savings". People leasing property mostly spend the difference instead of investing it.

3. Some kind of projection of house and rental prices rising more quickly than the market.

> Mortgage rates are lower than rental prices in many places,

its unlikely that mortgage payments are lower than rent - otherwise, it'd be better to pay the mortgage than renting! You would buy a place, and rent out a room or two, and have the rent income plus your own money to pay the mortgage.

I m not against renting - but i just don't want people to think that a mortgage is some baggage that they are better off not having, and instead just pay rent. I want people to make the smartest choices, so that the only way rent rises is because costs to build houses rise, not because the landlord got greedy. To me, rent is like a tax on being alive.

Rent and interest are both taxes on not being rich. I don't really see any reason one is intrinsically better than the other, but rent entails a lot less risk.

>its unlikely that mortgage payments are lower than rent - otherwise, it'd be better to pay the mortgage than renting! You would buy a place, and rent out a room or two, and have the rent income plus your own money to pay the mortgage.

I have friends doing just that. All it takes is the initial deposit capital (which many people don't have, or take years to save up) and credit rating.

>its unlikely that mortgage payments are lower than rent - otherwise, it'd be better to pay the mortgage than renting!

In some places, they are, and it is. However, I would be incredibly surprised if there is anywhere where the mortgage payments on a 100% LTV mortgage are lower than rent; and this is one of the reasons why many settled people don't own their own home. They can't (yet) afford a sufficient deposit to make the repayments affordable.

In my city (a) renting is with very, very few exceptions uniformly explicitly forbidden by home owner association agreements (bans that are now backed by recent state supreme court victories, the only places you can rent are in the small regions of the city that predate the explosive subdivision-based growth that started in the 70's--presumably driven by white flight, but I don't know for certain), (b) renting is made very unpalatable by a number of policies made by the city itself and (c) homestead property tax exemptions for homeowners that make owning very, very expensive if they don't live in their house themselves.

There are various times where dislocations in the market make this more true than others. For example over the last 3 years due to the high foreclosure rate in Las Vegas Nevada you could buy a property for $125,000, leverage it at a 4% rate, an immediately rent it out for $1500 a month making it cash flow positive from the day you bought it. However, that situation was created by the mortgage crisis where these same houses had $300,000 mortgages with $2500 mortgage payments. Having watched prices in the bay area fluctuate I've seen the markets on both sides (renting was cheaper than buying and buying was cheaper than renting) at various times.

> 1. Mortgage rates are lower than rental prices in many places

When this is true, this actually is a very convincing argument. Not only that, but you can effectively arbitrage yourself into a lot of wealth this way. You buy a house and move into it for awhile, but then you buy a new house, move into the new house, and rent out the old house. (You get better mortgage terms that way.) Rinse and repeat whenever you can afford to do so and you eventually end up with a large portfolio of profitable properties.

Of course, it's arbitrage--if enough people do it, it stops working. You can keep it going with more money, if you can make larger down payments, since at that point you're turning a one time lump sum into an ongoing cash flow. But eventually you have to have more money to make money, so not even this might be workable.

The idea that people shouldn't be "moving on a whim" probably isn't much consolation to people in economically depressed areas who can't move to where the jobs are because they're stuck to their house.

In any case, if you buy a house at age 30, and you get the standard 30 year mortgage, you'll effectively be paying rent to the bank until you're 60 anyway. You would be very fortunate to own a home outright for most of your life. Some people never do.

This is not true in every case, it's magical thinking.

You can make a rational calculation of what works out better using local rental rates vs property prices (sometimes one of them is grossly out of proportion to the other), applying a liquidity and mobility premium and your expectations of what the rental and property markets will do long term.

You rent your clothes, your food, your transport, everything. You pay some money and when it's done, you have nothing to show for it. What's so special about rent that you consider that wasted money, but not the money spent on clothes, food, transport, and everything else that has a short effect or wears out?

When I was backpacking through San Francisco I met a white-haired septugenarian in the hostel. He had a house in Connecticut that he rented out - and he'd spent the last 15 years of his life constantly travelling about the place on the proceeds. It wasn't opulence, but it was travel and he loved it.

I'm not against investing in real estate, but you have to be honest with yourself that that's what you're doing, and that it's not a risk-free investment, especially when you leverage it with debt.

The problem is that everyone casts it as an argument between renting and owning property fee simple. Actually, it's either an argument between renting housing and renting money, or it's an argument between having six to seven figures invested in residential real estate and having six to seven figures invested in anything else. Either way, it's not clear cut.

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