I can easily afford a home, but I have no interest in buying one.
I'd rather take all the extra money I save by renting and invest it in other assets. I also value my time and I don't want to have to do all the chores and upkeep a house needs. Sure I could pay someone to do all those things I suppose, but then it makes renting even that much cheaper.
Owning a house used to be a goal of almost everyone? But I wonder if like me younger generations don't even have an interest in buying a house and maybe that also affects the homeowner rate.
You could hire your landlord to do all the chores and upkeep for your house. I'm sure he would do it for cheaper than your rent. How many times has he been around this year to fix things for you?
My landlord is excellent IMO. They always fix any issues I have usually by the next day. I can't say I have had a ton of issues though.
But I mean stuff like mowing the lawn, shoveling the snow, cleaning out the gutters, and various other repairs and such that happen over time. That is what I mean by I value my time, and those things can take a considerable amount of time.
Also my rent is only ~$1000 per month for a 2-bedroom. It would cost me like 3x that for a basic house in mortgage plus property tax plus utilities plus maintenance etc. Sure a house is much larger space, but I don't really need all that space... And I don't find any smaller homes really. Property taxes alone would be like 1/3 to 1/2 my rent...
Sure, but is it worth $1000 per month to have the lawn mowed and snow shoveled? Repairs and improvements are not a service he does for the renter, it is something that he does to keep or increase the value of his real estate investment.
Your $1000 per month rent can only be compared with the interest part of a mortgage you'd get for the exact same housing you are paying rent for. If the rent is less than the interest would be, then yes, you are better off renting. You also have to be able to invest any money that would have gone to a mortgage to make more than the price of your rent in profit every month, because that is your loss each month on rent. It is achievable if you're shrewd and can stay cold headed. Compounding effects help you, but you're also vulnerable to rent hikes. If you stay for more than a few years with the same landlord, they will catch on to that you have a stable situation and are saving/investing, and they won't be able to sleep at night thinking about all that juicy income that you're saving and investing, that could belong to them.
I've shoveled snow and cleaned gutters, even put on a new coat of paint a few times. It is not worth paying somebody $1000 per month for that. That's a salary for somebody working 50% of full time just taking care of maintenance on the unit you're renting. You're also comparing renting a smaller place vs buying a bigger house. That's also part of the problem. Landlords have hogged all of the apartments and smaller housing in order to extract the lifeblood of young workers, when such units would also be available for sale and not rent in a healthy environment.
"Your $1000 per month rent can only be compared with the interest part of a mortgage you'd get for the exact same housing you are paying rent for. If the rent is less than the interest would be, then yes, you are better off renting."
Why just the mortgage interest? Why not the property taxes, the utilities, the repair costs, the time to perform the upkeep and maintenance (which for me has a monetary value).
I have been renting where I am at for 14 years now and there have been no crazy rent hikes.
It was ~800/mo 14 years ago and has climbed slowly to ~1000/mo currently.
I have looked many times at buying a home in my area, but there is nothing in a similar area, and a nice house that I would actually want to own for less than about 2000/mo for a mortgage (probably more like 2500/mo now). That doesn't even count property taxes which would be like another 500/mo.
Then, if I value my time, I would need to pay someone to do the mowing and shoveling and other maintenance beyond that...
It's way more expensive than renting.
With renting I'm paying about $12,000 a year and that's it. That includes water and heat too and me not having to spend any time or money on upkeep or maintenance.
With all the money I save, I do multi-family real-estate investing and development. That generates me a passive income plus huge deductions from asset and property depreciation. And when the property is improved and sold after several years nets a large gain which I move into a new property thus not having to pay taxes on that transaction either. The return on this is far greater than the average rate of a home appreciation minus mortgage interest.
I'd rather take all the extra money I save by renting and invest it in other assets. I also value my time and I don't want to have to do all the chores and upkeep a house needs. Sure I could pay someone to do all those things I suppose, but then it makes renting even that much cheaper.
Owning a house used to be a goal of almost everyone? But I wonder if like me younger generations don't even have an interest in buying a house and maybe that also affects the homeowner rate.