Boglehead perspective on buying vs renting. What am I missing?
Resume IA
L'auteur du post cherche à comprendre pourquoi acheter une maison n'est pas considéré comme un moyen de préserver son argent, même si les paiements hypothécaires sont inférieurs aux loyers locaux
Conseil cle
Il est important de considérer les coûts totaux de propriété, y compris les frais de transaction, les impôts et les frais de maintenance, avant de décider d'acheter ou de louer
I have discovered this philosophy not long ago, and am very eager to learn. There is one question in particular, that I cannot grasp. I suspect that it appears regularly on the sub in one form or the other. But I could not find something that covers my thoughts on the subject precisely. I would greatly appreciate if you could help me understand why is buying a house does not "save" some part of your money, as in you'd be still getting some of it back upon selling the house, right? I understand why real estate is considered a poor **investment**: low or uncertain real returns, high transaction costs, taxes, maintenance, opportunity cost versus index funds, etc. I’m not trying to argue that property is a good investment. What I’m struggling to fully understand is the logic of why it’s still discouraged even as a way to preserve money, given that housing expenses are unavoidable anyway. I know the common argument "mortgage = rent" is very flawed. But suppose the mortgage payment is *lower* than local rent, and the difference (plus expected maintenance and other ownership costs) is fully accounted for. In other words, the total monthly cost of ownership is roughly comparable to renting, after being conservative about all hidden and ongoing expenses. And suppose the money being saved for the down payment was invested in index funds, i.e. was working for you up until the moment of the purchase. So what I struggle with is the following. With renting, all housing payments are gone forever. While with ownership, even if the property does not outperform inflation and even if I sell before paying off the mortgage, I can still recover \*some\* portion of the money upon sale. Yes, there are large transaction costs on both purchase and sale, but I am still getting some of my money back, no? Intuintively it seems like ownership allows partial capital recovery, whereas renting allows none. Would it still be considered inferior even as a way to not completely “burn” housing expen
“I don't think very many bogleheads actually say it is bad for you to own a house. I don't think ANY would say so if mortgage + maintenance are lower than rent. There are reasons real estate for your primary residence often is a big wealth builder: namely it is often the only investment people make in ordinary life which is leveraged. Leverage works both ways, though, if the property price goes down. Buyer beware is all. Yes you'll get some people on the internet arguing about absolutely anything. Don't let that dissuade you from making your own decision. I would never want to go back to rented housing after living in my own home - even if it were financially more responsible to rent (in my case it sure worked out that renting was worse than buying by a long shot, but hypothetically) it would not be possible to "rent" the freedom and quality of residence I have at any price in my market. My advice would be: go ahead and buy if you can do so comfortably, are not acting on some speculat”