Quote:
Originally Posted by Johnny199r
Assume someone owns a house with a value of $500k and they sell the house, how much does it cost them in transaction costs to move?
What if they've bought and sold two houses? How much did they fork over in realtor fees, lawyer fees, mortgage discharge fees etc each time? Why does no one ever talk about that when they sell a house? It's a huge amount of money that disappears into thin air.
If I rent a house and the house needs a new furnace or roof, should I be kicking myself that I don't get to fork over the $5-10k rather than telling the landlord and having them do it?
I rented a house that suddenly had substantial water damage in the basement. It came out of nowhere. My landlord spent a lot of money and time fixing that mess. Glad it wasn't me.
Property taxes are also a fun thing to pay. Those don't usually go down long term, do they?
There are also different rental situations. Renting a house is different than renting in a brand new, upscale, professionially managed apartment building. Landlord is never going to sell your place there. I live in such a building. I never hear my neighbours, but growing up in my families' SFH, the neighbours behind me had kids from hell that screamed at the top of their lungs all summer long, ruining life for us. No one mentions about how you can't have terrible neighbours if you own a house?
"Increased moving costs"? Hard to know how to respond to that. Renting a uhaul and buying pizza and beer for some friends or relatives doesn't cost very much.
Outside of getting lucky by buying at the right time in parts of of Vancouver and Toronto, investing in index ETFs on questrade once a year with excess money after rent is paid makes renters come out waaaaaaaay ahead of buyers from a financial standpoint. The U.S stock market has an annual return of about 10-11% over the last century. Buy a U.S market etf. That's all it takes. No skill required. Has anyone's house in Calgary increased in value annually by 10% every year they've owned it?
Again, it's not all about the financial standpoint, it can't be, otherwise no one would buy a house after doing the math of renting+investing vs buying.
On the flip side, owning provides a level of stability that sometimes can't be found renting. It also allows people to have more control over their property to make changes and presents the possibility of capital appreciation if the value of the home rises. For many, it provides peace of mind to rent their house from the bank for 30 years before they own it.
The rent vs own arguement is way more nuanced. Each side usually tends to leave out the arguments that are detrimental to their position. It always depends on ones own comfort levels and priorities in life. I think buying is crazy, but that doesn't mean I'm right.
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It really comes down to this. "Rent" from the bank as you called it or rent from a landlord.
$1800 rent is equivalent to about 400K mortgage. So when you get that mortgage, you pay that "rent" for 25 years. At the end you have a place to live for free. Or you sell it and move in with the kids as payback :-)
Either way, you have an asset.
By renting you sign up to pay that same amount a month (probably more) for all of your adult life. Is that 50 years, 55, 60? A lot more than 25.
You said you'd be scared to have a mortgage till retirement. Isn't having a rent payment in retirement a scary alternative?