I have a very detailed spreadsheet where I modeled everything, maintenance expenses, taxes, fees and the opportunity cost of all those maintenance expenses going up over time as opposed to invest them in the market. I couldn’t find any online calculator that was as thorough as mine, as they all suffered from some variation of what you are describing.
In almost every single test I’ve done, buying becomes way cheaper than renting and investing the difference after 5-10 years. Pretty much the only case where renting gets ahead is basically if the house appreciates less than the rate of inflation (again, painting broad strokes here, please do not interpret me too literally), or if one wants to move too frequently (my case).
This is not because housing is some magic investment, but because fixed cheap leverage is. If I could get a 30 year fixed-rate cheap non-callable loan to invest in market indexes, it would be a similar situation, but margin is an incredibly riskier different instrument.
I didn’t say buying wasn’t cheaper in the long run. I said it’s not as cheap as people think, and it’s not as fixed as people think. There are people on this thread claiming that owning a home guarantees fixed costs for 30 years. That’s outright false, and naive.
In almost every single test I’ve done, buying becomes way cheaper than renting and investing the difference after 5-10 years. Pretty much the only case where renting gets ahead is basically if the house appreciates less than the rate of inflation (again, painting broad strokes here, please do not interpret me too literally), or if one wants to move too frequently (my case).
This is not because housing is some magic investment, but because fixed cheap leverage is. If I could get a 30 year fixed-rate cheap non-callable loan to invest in market indexes, it would be a similar situation, but margin is an incredibly riskier different instrument.