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This logic assumes that 35% of Americans WANT to rent their home. Which seems odd to me, if only for financial reasons - why would you pay 1400$ for a 1 bedroom

This logic assumes that 35% of Americans WANT to rent their home. Which seems odd to me, if only for financial reasons - why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it?

triceratops 6mo ago
If you invent a scenario where the mortgage is half the rent then buying is a no-brainer. Does that reflect reality?
- TimorousBestie 6mo ago
  Maybe not half, but it’s pretty common around here (generic midwestern city) for renting to be more expensive than a comparable mortgage. Many landlords seem to expect to pay their mortgage and property taxes and maintenance with the rental income, and still net a profit, if r/landlord is to be believed.
  - triceratops 6mo ago
    The profit is compensation for the risk. The mortgage and property taxes and maintenance are due no matter what - can't find a tenant, tenant doesn't pay, tenant flushes paper towels down the toilets every day etc etc. If there was no profit there would be no landlords. Some might say that's great. But it would be a world with less flexibility, with fewer choices. Don't like your job and want to move? Split up with your partner and need someplace to live? Moved to a new city and don't know where you want to put down roots yet? At college for 4 years? Don't want to deal with house maintenance? "F** you, buy a house anyway". That's what we'd have if there was no rental housing.
    - TimorousBestie 6mo ago
      Okay, so why were you asking if renting can be more expensive than buying? You seem to already know that it can be.
      - triceratops 6mo ago
        I said they were inventing fantasy scenarios. The actual numbers might be more like rent $1400 vs mortgage $1000. After property taxes, insurance, and maintenance there might be $50 left. A handsome 3.5% profit, rising to maybe 6-7% if you include principal paydown. This is hardly a money-printing machine. It's a steady return for taking on some risk.
        TimorousBestie 6mo ago
        Ah, I see, you wanted to split hairs on the numbers. Fair enough.
        triceratops 6mo ago
        It isn't splitting hairs. The numbers actually matter.
        TimorousBestie 6mo ago
        It’s at risk of becoming a fractal of splitting hairs. Substituting your numbers in for theirs doesn’t change much. It’s still more expensive to rent. Kind of an unhelpful tangent to the discussion, really.
        triceratops 6mo ago
        > Substituting your numbers in for theirs doesn’t change much You can buy a boat for $10 or rent one for $9. Assuming you really want a boat, would you buy or rent? Do my numbers reflect reality? Do they have a bearing on the choice you make?
        Dylan16807 6mo ago
        It changes a TON whether you pay 2x for renting or whether you pay 1.05x. Renting has annoyances but it also has flexibility. A flat "more expensive" is staring at one tree and missing the whole forest of tradeoffs. Way more people would choose to spend $50/month for that flexibility versus $700/month.
  - chii 6mo ago
    > renting to be more expensive than a comparable mortgage. that doesn't sound plausible. May be for a select few properties that are in some unique circumstance (e.g., the seller of the property would sell underpriced because they needed quick sale). And often, in arguments like these, the rent is the rent, but the mortgage is purely the interest on the loan, and doesn't count the maintenance cost, and doesn't count the deposit required (which has a cost, ala the cost of capital). If you added up all these costs, it exceeds rent.
    - Ekaros 6mo ago
      I fundamentally agree on statement that rents are more expensive than mortgages. As capital is involved and landlords want premium on capital. Still, things can go either way. And well renting is lot more flexible and less risky. So there is really nothing wrong with that option existing. And many times it is the better pick of the two.
      - triceratops 6mo ago
        > And well renting is lot more flexible and less risky Sure if you don't count the cost of risk for the tenant (of needing to move due to job loss, unexpected maintenance bills) then renting is more expensive.
  - hunterpayne 6mo ago
    You do know that the posters on r/landlord are often selling services to landlords and thus have a financial incentive to make being a landlord seem attractive. Its a pretty safe assumption that reality isn't that rosy.
maest 6mo ago
The numbers you are using are not common at all.
KPGv2 6mo ago
> why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it Because the down payment you put into your purchased home could've been put into the stock market and grown faster than property values (this is historically true). Because you don't want the headache of home maintenance. Because in the 21st century, job stability doesn't exist so it's a big risk to buy a home fifteen minutes from your current job that might be an hour from your new job after you get fired so a CEO can get more golden parachutes. Because you might have to change cities a year from now. My wife and I rented for a long time because it was better than owning for us.
- frontfor 6mo ago
  Agreed. It’s a classic fallacy to compare rent vs mortgage on a numbers to numbers basis. It’s classic example of not accounting for the total cost of ownership.

triceratops 6mo ago

If you invent a scenario where the mortgage is half the rent then buying is a no-brainer. Does that reflect reality?

TimorousBestie 6mo ago
Maybe not half, but it’s pretty common around here (generic midwestern city) for renting to be more expensive than a comparable mortgage. Many landlords seem to expect to pay their mortgage and property taxes and maintenance with the rental income, and still net a profit, if r/landlord is to be believed.
- triceratops 6mo ago
  The profit is compensation for the risk. The mortgage and property taxes and maintenance are due no matter what - can't find a tenant, tenant doesn't pay, tenant flushes paper towels down the toilets every day etc etc. If there was no profit there would be no landlords. Some might say that's great. But it would be a world with less flexibility, with fewer choices. Don't like your job and want to move? Split up with your partner and need someplace to live? Moved to a new city and don't know where you want to put down roots yet? At college for 4 years? Don't want to deal with house maintenance? "F** you, buy a house anyway". That's what we'd have if there was no rental housing.
  - TimorousBestie 6mo ago
    Okay, so why were you asking if renting can be more expensive than buying? You seem to already know that it can be.
    - triceratops 6mo ago
      I said they were inventing fantasy scenarios. The actual numbers might be more like rent $1400 vs mortgage $1000. After property taxes, insurance, and maintenance there might be $50 left. A handsome 3.5% profit, rising to maybe 6-7% if you include principal paydown. This is hardly a money-printing machine. It's a steady return for taking on some risk.
      - TimorousBestie 6mo ago
        Ah, I see, you wanted to split hairs on the numbers. Fair enough.
        triceratops 6mo ago
        It isn't splitting hairs. The numbers actually matter.
        TimorousBestie 6mo ago
        It’s at risk of becoming a fractal of splitting hairs. Substituting your numbers in for theirs doesn’t change much. It’s still more expensive to rent. Kind of an unhelpful tangent to the discussion, really.
        triceratops 6mo ago
        > Substituting your numbers in for theirs doesn’t change much You can buy a boat for $10 or rent one for $9. Assuming you really want a boat, would you buy or rent? Do my numbers reflect reality? Do they have a bearing on the choice you make?
        Dylan16807 6mo ago
        It changes a TON whether you pay 2x for renting or whether you pay 1.05x. Renting has annoyances but it also has flexibility. A flat "more expensive" is staring at one tree and missing the whole forest of tradeoffs. Way more people would choose to spend $50/month for that flexibility versus $700/month.
- chii 6mo ago
  > renting to be more expensive than a comparable mortgage. that doesn't sound plausible. May be for a select few properties that are in some unique circumstance (e.g., the seller of the property would sell underpriced because they needed quick sale). And often, in arguments like these, the rent is the rent, but the mortgage is purely the interest on the loan, and doesn't count the maintenance cost, and doesn't count the deposit required (which has a cost, ala the cost of capital). If you added up all these costs, it exceeds rent.
  - Ekaros 6mo ago
    I fundamentally agree on statement that rents are more expensive than mortgages. As capital is involved and landlords want premium on capital. Still, things can go either way. And well renting is lot more flexible and less risky. So there is really nothing wrong with that option existing. And many times it is the better pick of the two.
    - triceratops 6mo ago
      > And well renting is lot more flexible and less risky Sure if you don't count the cost of risk for the tenant (of needing to move due to job loss, unexpected maintenance bills) then renting is more expensive.
- hunterpayne 6mo ago
  You do know that the posters on r/landlord are often selling services to landlords and thus have a financial incentive to make being a landlord seem attractive. Its a pretty safe assumption that reality isn't that rosy.

maest 6mo ago

The numbers you are using are not common at all.

KPGv2 6mo ago

> why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it Because the down payment you put into your purchased home could've been put into the stock market and grown faster than property values (this is historically true). Because you don't want the headache of home maintenance. Because in the 21st century, job stability doesn't exist so it's a big risk to buy a home fifteen minutes from your current job that might be an hour from your new job after you get fired so a CEO can get more golden parachutes. Because you might have to change cities a year from now. My wife and I rented for a long time because it was better than owning for us.

frontfor 6mo ago
Agreed. It’s a classic fallacy to compare rent vs mortgage on a numbers to numbers basis. It’s classic example of not accounting for the total cost of ownership.