Renting vs Buying a Home: What NOBODY Is Telling You

"renting a million dollar house appreciates $30,000 a year on average no way could you rent a million doll house for that little come on dude"

"housing affordability is near its lowest level ever in history and the average income needed to afford the median priced home is now $114,000 a year"

"let's take the example of buying a $400,000 home because at 10% down you would be out of pocket $40,000 you would then be receiving a loan for $360,000 which at a 7% interest rate brings your monthly payments to $2,400 a month if you pay PMI by the way that be an extra $150 a month on the low end From there you're going to have property taxes in an average of 1.15% a year or $383 a month insurance is probably going to cost you about $200 a month and if we assume you spend about 1% of the property's value each and every year in repairs and maintenance that's an additional $330 a month this brings your total out-of-pocket cost to own the average home here in the United States at $3,463 a month with $40,000 down"

"in a location like Nashville that means you could buy a place like this or this or this or you could just rent the similar home for $2,100 a month which is $1,500 a month less without tying up $40,000 as a down payment and without locking yourself into a property that costs you 5 to 6% to sell"

"option two is that you could rent a house for $2,100 a month invest $40,000 in the market and continue saving and investing $1,500 a month from the money that you're saving by renting at that point assuming you'd be able to generate a 7% return in the stock market over 15 years that savings will have amounted to over $600,000 in cash which would likely be enough to buy a home outright in cash when you're done renting"

"on the other hand if you purchased a property during that time even though you're paying down the mortgage your mortgage balance after 15 years is still 256 ,000 on an original $360,000 loan meaning over 15 years your savings is only $104,000"

"across the United States it was found that less than 50% of all landlords raised rents by more than 3% with the other half raising rents by less or even nothing"

"from 1987 to 2009 during a time when inflation averaged 2.9% suggesting that home prices actually only increased half a percent a year when adjusted for inflation"

"housing values have gone up 250% since 1990 the S&P 500 has gone up 28 18% during that same period with dividends reinvested so if you have to choose between a lumpsum purchase in a house or the S&P 500 as an investment the stock market is a clear winner"

"the price you pay is the price you pay that's it there's no hidden cost of Maintenance Rising property tax values higher Insurance costs or repairs it's just a fixed cost every single month"

"renting is now cheaper than buying in all major 50 US cities"

"after 13 years of making mortgage payments your mortgage balance would be reduced to $276,000 at 1% net appreciation a year which takes into account Rising property tax values and higher Insurance costs that means the home would eventually be worth $450,000 this means after 6% commissions and closing costs you're left with $423,000 of which $276,000 is the mortgage leaving you with $147,000 left over as profit however since you're required to continue making those average mortgage payments of $2,400 a month plus property taxes Plus Insurance over 13 years that equates to $465,000 leaving you with a net cost of $318,000 or $2,000 $38 a month on average to say you own the house"

"unless you plan to keep your home for at least 10 to 15 years at today's prices renting is the cheaper option"

"long term over the next 20 to 30 years buying is still the better option even though the future of the housing market in the short term is fairly uncertain over the long term housing has proven to be a fairly resilient investment"

"let's say you're looking to buy a $550,000 house that would cost you $2,500 a month to rent if you plan to stay there for 13 years with a 7.25% mortgage a 10% down payment 3% home appreciation 5% rent growth 8% investment returns and a 3% inflation rate renting ends up saving you $159,000 over that time frame"

"in this circumstance buying doesn't even begin to break even until year 29 and it isn't until year 37 do you see any substantial savings on the other hand if interest rates were 3.5% buying starts to save you a substantial amount of money as early as 8 years"

"in the past I'll admit buying made a lot of sense inventory was plentiful interest rates were low and it was really easy to find a good deal but today with such a massive disparity between buying and renting I struggle to find anything that makes any Financial sense to purchase unless you're looking for a primary residence that you intend to keep for a very long time"