On paper, owning a home is almost always more expensive than renting — about 14% more, on average, after factoring in expenses like insurance, taxes, and upkeep.
I’d be interested in seeing how they arrived at the 14% number.
When I bought my first home a couple of decades ago I moved out of my 1 bedroom apartment which I was paying a monthly rent of $700/month into a small starter home with a mortgage of $1000/month. 20 years later that exact same apartment rents for $1350/month. All of the years I lived there my house payment never rose higher than the $1000/month mortgage payment while the rent on the apartment apparently continued to increase year over year. Meanwhile I ended up selling the starter home for $110,000 than my purchase prices nearly 20 years ago.
So is their 14% number just calculated on the first month of each (renting vs buying)?
Once you factor in things it mentions like insurance, taxes, upkeep along with others like a down payment then it’s very easy to see where the 14% numbers comes from. Frankly, I’m surprised it’s only 14%. There’s a lot of additional and hidden costs with home ownership.
The difference is those “costs” are going towards buying equity that you then get to keep. Maintaining a house is expensive but it is an asset that maintains value. This article really doesn’t seem to understand that which shows a very basic misunderstanding of the wealth math that goes into home ownership.
Renting may be cheaper month to month but you’re literally pouring that money down a black hole never to be seen in your hands again.
Granted, building equity doesn’t matter when you’re already have no cash paycheck-to-paycheck for either.
I’d be interested in seeing how they arrived at the 14% number.
When I bought my first home a couple of decades ago I moved out of my 1 bedroom apartment which I was paying a monthly rent of $700/month into a small starter home with a mortgage of $1000/month. 20 years later that exact same apartment rents for $1350/month. All of the years I lived there my house payment never rose higher than the $1000/month mortgage payment while the rent on the apartment apparently continued to increase year over year. Meanwhile I ended up selling the starter home for $110,000 than my purchase prices nearly 20 years ago.
So is their 14% number just calculated on the first month of each (renting vs buying)?
Once you factor in things it mentions like insurance, taxes, upkeep along with others like a down payment then it’s very easy to see where the 14% numbers comes from. Frankly, I’m surprised it’s only 14%. There’s a lot of additional and hidden costs with home ownership.
The difference is those “costs” are going towards buying equity that you then get to keep. Maintaining a house is expensive but it is an asset that maintains value. This article really doesn’t seem to understand that which shows a very basic misunderstanding of the wealth math that goes into home ownership.
Renting may be cheaper month to month but you’re literally pouring that money down a black hole never to be seen in your hands again.
Granted, building equity doesn’t matter when you’re already have no cash paycheck-to-paycheck for either.
No, not all of them. Insurance, property tax, and maintenance do not go to equity.
Not to mention mortgage interest.