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this post was submitted on 09 Dec 2023
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Where on earth is renting cheaper than a mortgage?
As opposed to paying even the same in rent, where you get NONE of it back?
Lol, what planet do they live on?
On that 800k house, it takes a little over 30 years to get 2 million out of it if the house appreciates at 2% per year. Housing in many places has appreciated much faster than that (much faster than the market or any other single thing, including cryptocurrency)
And this is why we have a housing shortage. Because it's in the financial interests of owners to restrict the building of housing.
In high CoL places, rent is routinely much lower than a mortgage— not to even mention the incredible down payment that you have to get the loan in the first place.
As an example, a one bedroom apartment in SF would cost you around $1,000,000 to buy. If you somehow have $200k to get a mortgage, your monthly payment is about $6k. To rent that same apartment, you’d only (lol, only) pay ~$3000-4500.
On top of this, the cost of owning is higher than just your mortgage payment. Your lender will most likely require homeowners insurance which can easily run a few thousand dollars per year (compared to a couple hundred for renters insurance). You also have to pay for the big repairs yourself when as a renter if the heat breaks that’s the landlord’s problem.
This is me. I live in LA, near Hollywood. I pay 3k/month in rent for a 1200sq ft 2br apartment that's close to everything.
A condo similar to my apartment (it was a condo conversion of a building similar to mine) in my neighborhood sold for almost a million this past year. That's about 6k/month all in w/ taxes and whatnot, not including maintenance costs.
Why the fuck would I pay double to own the same thing, and lose all my flexibility, when I take that 3k difference every month and invest it. Which builds wealth too. Sure, my investments may not be as inflation protected as a home, but they're a lot more fucking liquid. And I can move in 30 days no unsold house hanging over my head.
In Australia and most developed cities in Asia rent is cheaper than a mortgage.
This is not correct for Australia.
I'm looking at places in Melbourne at the moment. A 1-bedroom place is around $450 a week or $1800 a month roughly.
You can easily get a cheaper mortgage than that for a 1 bedroom place. Potentially even get a 2 bedroom unit for same as you'd pay in rent.
Do mortgages function the same in those Asian cities?
I mean you could compare the 'monthly payment' on Jenose in Korea but it's not the real number. It's not comparable.
https://en.m.wikipedia.org/wiki/Jeonse