- I'm currently paying $2,300 for a $500k house. I think his rental rates are way off.
- In a free market, rental rates are supposed to adjust to make it such that an individual is indifferent between renting and buying. If it was that much more expensive to own than to rent, the landlord would never rent the house out!
>- In a free market, rental rates are supposed to adjust to make it such that an individual is indifferent between renting and buying.
I don't quite agree with that. If you're renting out, the apartment owner must pay for the risk of you destroying the apartment. If you instead buy the apartment you don't need to pay for the risk, assuming that you don't yourself destroy it.
A free market doesn't optimize for money. It optimizes for the production of what people are willing to pay for. They don't care if they can be better off financially for renting. What they want is home ownership.
- I'm currently paying $2,300 for a $500k house. I think his rental rates are way off.
- In a free market, rental rates are supposed to adjust to make it such that an individual is indifferent between renting and buying. If it was that much more expensive to own than to rent, the landlord would never rent the house out!