Quote:
Originally Posted by Red
Nah, I am pretty sure that majority of people come out ahead by buying.
Formulas for rent/buy are great on paper.
And everyone is a great investor on a public message forum. Until we get to see those T5s it's all just talk LOL.
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I don’t think that is a rebuttal to what I am saying. I agree with you that most people are better of buying but the reason isn’t because buying is the better choice it’s that humanity is genetically terrible at deferred gratification.
No one is asking anyone to be a great investor. In fact attraction of trying to be a great investor is one of the reasons to buy a house. It forces you into an investment that you aren’t going to sell during a panic because say a brand new virus caused the market to drop 20%. If you don’t have the discipline to understand that portion of your investment is a 50yr time horizon then this strategy probably isn’t for you. A simple index fund is all you really need in this case. If you are counting on better than market returns then you probably should be buying a house.
But even before you discuss the investment disciple the bigger factor is the commitment to actually invest the savings in the first place. If you can’t do that regardless of what happens with the rest of your life then renting and investing might not be the strategy for you.
Those two hazards of renting are real and are what make owning a house one of the best investments a person can make. That doesn’t make the calculation wrong that done correctly the renter can come out ahead.
The final one is access to leverage, there are very few investments that a bank will give you 20-1 leverage on for a 3% fee.
I also bought for school stability without even considering the economic case. It doesn’t mean it doesn't exist.