Once again I saw the “but if I buy a house I get something back. If I rent I get nothing back. Even a small return is better than zero…” trope about renting vs. buying. This time I answered it slightly differently, and maybe this explanation will stick:<\/p>\n
You have to look at the whole picture.<\/p>\n
Give me $10. I will buy you a bag of chips and give you $2 back. Hey, a small return and a bag of chips, that’s good, right? But if you can just buy the bag of chips for $5 you’re better off — you can hold on to $5 out of your $10, rather than just $2. There’s no “return” in the second case, but you put out less to begin with. In both cases you get delicious chips.<\/p>\n
So it is with housing. The key thing to appreciate is that all discussions of “building equity” and what-not are distractions<\/em>: at the end of the day, living somewhere is going to cost you money<\/em>. This is where the details matter: how much money for each option? If the total cost of owning (interest\/opportunity cost, transaction costs, upkeep, insurance, property taxes) is more than the total cost of renting (rent, tenant’s insurance) for the same place and you invest the difference, you’ll do better renting. <\/p>\n","protected":false},"excerpt":{"rendered":" Once again I saw the “but if I buy a house I get something back. If I rent I get nothing back. Even a small return is better than zero…” trope about renting vs. buying. This time I answered it slightly differently, and maybe this explanation will stick: You have to look at the whole […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/1271"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1271"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/1271\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}