Renting Vs. Buying

[yehuda S]

I've always thought that one of the big milestones and goals in life is to buy a home but after thinking about it I'm not sure if it always makes more sense than renting.

One obvious thing is that when you buy a home for $300k you will end up paying something  more like $450k after a 30 year mortgage is said and done.

Obviously there are lifestyle differences when you own your own place but does it always make financial sense?

[whYME]

Check out https://www.khanacademy.org/economics-finance-domain/core-finance/housing/renting-v-buying/v/renting-versus-buying-a-home

[Malachi]

Check out https://www.khanacademy.org/economics-finance-domain/core-finance/housing/renting-v-buying/v/renting-versus-buying-a-home

great video, thanks for posting.

[Super Speed]

I've always thought that one of the big milestones and goals in life is to buy a home but after thinking about it I'm not sure if it always makes more sense than renting.

One obvious thing is that when you buy a home for $300k you will end up paying something  more like $450k after a 30 year mortgage is said and done.

Obviously there are lifestyle differences when you own your own place but does it always make financial sense?

I always had my doubts as well. I personally feel for your kids self esteem and for your own personal 'menuchas hanefesh' its worth it. Another point is that I know someone who was renting for 30 years and just thrown out of their house as the owner wanted to sell it. To me that's enough of reason to buy.

[yehuda S]

I'm aware that there are many benefits of owning a home, stability primarily. However I'm wondering if instead of thinking 'home ownership is the best financial choice, and it also provides many benefits' maybe the thinking should be 'home ownership provides many benefits and you are going to pay a premium for those benefits'.

The difference is that when it's viewed as a luxury not a necessity, people who are struggling financially can make the choice to forego the benefits of ownership to decrease the strain on their budget.

[Menachem613]

I've always thought that one of the big milestones and goals in life is to buy a home but after thinking about it I'm not sure if it always makes more sense than renting.

One obvious thing is that when you buy a home for $300k you will end up paying something  more like $450k after a 30 year mortgage is said and done.

Obviously there are lifestyle differences when you own your own place but does it always make financial sense?

And how much will you pay over 30 years if you rent?

[Sport]

And how much will you pay over 30 years if you rent?

And you need to continue paying rent.
I think the real argument against buying is that you are tying up your down payment in the house. Although, some argue that your house can be viewed as an investment but you can probably get a much better return investing that money elsewhere.

[yehuda S]

great video, thanks for posting.

+1

One point:  He is comparing renting vs. buying equivalent houses. However for a young family starting out, it may make MUCH more sense to live in a small apartment for as long as possible and save like crazy. Then in a few years you may be able to put down the majority of the cost of the house if not all of it. Then you get the best of both worlds.

[skyguy918]

+1

One point:  He is comparing renting vs. buying equivalent houses. However for a young family starting out, it may make MUCH more sense to live in a small apartment for as long as possible and save like crazy. Then in a few years you may be able to put down the majority of the cost of the house if not all of it. Then you get the best of both worlds.

This is not true. Many financial experts will tell you that you're better off carrying a mortgage than just buying the house. Between the tax advantages and the low rates on mortgages, you can easily invest the money you would otherwise be putting in the house and come out on top/

[popcorn1508]

Also take into account rent goes up every year or so when you buy a house your monthly payment will be pretty much the same every month

[Name Changed]

This is not true. Many financial experts will tell you that you're better off carrying a mortgage than just buying the house. Between the tax advantages and the low rates on mortgages, you can easily invest the money you would otherwise be putting in the house and come out on top/

+1

Bad investment to pay more than the minimum mun needed for a down payment. Unless you wouldn't invest your money in any way...

[ari2955]

One obvious thing is that when you buy a home for $300k you will end up paying something  more like $450k after a 30 year mortgage is said and done.

1) You didn't deduct inflation (the benefit of which you don't have with renting)
2) What about the increase in home value?

[mercaz1]

Also owning a home is sometimes the only yerusha some ppl leave their kids

[Sport]

2) What about the increase in home value?

Also owning a home is sometimes the only yerusha some ppl leave their kids

True, but wouldn't your money get a better return invested elsewhere?

[skyguy918]

  True, but wouldn't your money get a better return invested elsewhere?

Depends where/when you're talking about 

[yehuda S]

Also owning a home is sometimes the only yerusha some ppl leave their kids

That video demonstrates that you could save the same amount of money by renting.

[CS1]

Also owning a home is sometimes the only yerusha some ppl leave their kids

+1
Also, if you need a quick $50K and you know that you can get it back within a year,
you can use your home's equity for that.

[smee123]

Also take into account rent goes up every year or so when you buy a house your monthly payment will be pretty much the same every month

+100
Salary's go up with inflation but your mortgage stays the same= a smaller % of your income.

[esther gee]

+100
Salary's go up with inflation but your mortgage stays the same= a smaller % of your income.

Salaries have not been going up with inflation in years

[Ergel]

Salaries have not been going up with inflation in years

Proof?
Chart here doesn't really seem to say that
http://en.m.wikipedia.org/wiki/Real_wage