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The various tax deductions or tax expenditures for homeowners probably shouldn't be stacked up against renting, because efficient market effects "should" pass on similar savings or losses from the landlord to the renter.

But what about how local quirks affect financial decisions? There may be tax surprises, like the way you are incentivised away from McMansions in Texas. The lack of state income tax means a punitive property tax, which I believe is compounded by a "robin hood" kicker for well off counties. So buy a shack in Texas, or rent a victorian house in California, or ?? in New York...

I understand what you are saying and they are good points but I still disagree. I still say renting, theorirectically will make you wealthier than owning. Rent can be the same monthly cost as a mortgage payment, but owners pay more property, more maintenance costs, more insurance etc. I just spent $114 on Tyvek and 2 x 4s today to build a wall. How many renters are gonna build a wall in their living space with their own money?

I just took delivery of $4600 in appliances yesterday. I have to pay a licensed gas mechanic $450 to hook up 2 of the gas appliances. What renter bears these costs? When I was a renter I pushed buttons on appliances without regard to costs except for soap. Some renters have to go to Laundromats sure, but they still have stoves and furnaces and whatnot at home they didn't buy nor install on their own time or pay somebody to install.

I forgot to add the cost of $88 dollars to the sheetrock for my wall. That's 88 dollars less for my retirement or other savings fund.

The cost of maintaining a home did not go down 47%. Does the cost of a electrician or a plumber for example do down 47% this year?

Yes A mortgage payment MAY be lower than a rent cheque these days but home ownership is much more than making a minimum mortgage payment

Suppose it were really true that renting is more profitable in the long run than owning. Then, as people become better educated and more aware of financial matters, one might expect that more and more people, and eventually everybody, will choose to rent. That raises the question as to who then would own the houses and apartments that are rented to all those wise people. Ignorant people who don't know the facts and choose to be landlords? The city? Corporations?

I wonder how many landlords, aware of the costs and the balance sheet, own their own homes and how many rent from some other landlord.

You are looking at this bottom-up, but to be true it must also make sense top-down. Where are the savings to renters coming from? Either the landlord is losing money or his expenses are somehow lower.

Landlords should have some modest savings in maintenance if there are enough units to not fix things piecemeal. Maybe they are taxed much differently or have different mortgage rates?

I think the biggest factor may be how they account for the perceived rise in resale value of the units vs the same by homeowners. Homes become expensive when there is real estate inflation that turns down payments into juicy leveraged investments. One would think this would ultimately apply the same to landlords and homeowners (with different lags) but I'm sure various policies mix it up. I don't think it's fair for you to complain that homeowners "have" to spend a lot of money on upgrades - that, unlike maintenance, is optional.

You are comparing apples and oranges. The cost of building the wall is the same in a residence you own as in a residence you rent. The fact that you may not be allowed to or may not choose to build the wall in the rental unit is irrelevant. What you are saying is no different than saying that you can rent a 1500 square foot residence for less than you can own a 10,000 square foot residence.

And in one case you have the appliances you want and in the other you have the appliances the landlord provides. Again, apples and oranges. To assert that renting is less expensive than owning you need to compare two residences that are physically identical.

It is certainly possible that renting might be more economical than owning in the right set of circumstances but to make that assertion based on two different residences is inaccurate.

Our house is down about 16% off the high. Which shows the market isn't homogeneous.

For rent vs buy, there are too many variable to have one conclusion.

There was mention of the ration of house price to rent, which varies by area and over time. If the ratio swings between two extremes, is there not one extreme that lean towards renting and the other, buying?

Doesn't the ratio itself get impacted by interest rates?

I live in a house that isn't available for rent. My town has an excellent school system and very few rental units. There are those who can look at it as having a 12 year span where they don't pay for private school and have their house paid for during that time with the savings. This is yet another variable that's not so simple. One neighbor has no kids, but pays their tax. The other had three. Their cost analysis would be very different.

I have snipped my previous message due to the mods dislike for excessive quoting. I factor all that in when I do comparisons. In my particular case, mortgage costs (the "fixed" portion) is about 1.5x the others (insurance, taxes, some utilities, maintenance and upkeep). The AGGREGATE right now is less than a equivalent house (when you can find one) in the area rents for. I've lived there 11 years, so longevity flipped the equation in my favor. That doesn't even factor in the return of the some of the money that's been paid when I sell.

Without doing a year-by-by comparison of what was paid versus what could have cost for rent, and the investment returns for any delta, plus the equity return on sale, etc. etc. I just don't see how any conclusion can be made. It will vary so much by area, by housing prices, investment returns, any number of factors, that the objective numbers are hard to evaluate for the past, let alone make a prediction for the future.

That just covers the tangibles. The intangibles are even harder. How do you put a price on stability? Larger homes generally aren't typical investment properties. If you want an apartment or small house, then you might be rent somewhere long-term. "Better" houses tend to be short-term situations. If, like me, you hate to move, that's not good.

What about being able to redecorate or deciding to add a deck if you want? To some people that's important.

You don't think the renters pay? I think you're wrong. They won't get a lump-sum bill bill, but it'll come from the renters eventually. Besides, renters aren't getting those kind of appliances usually. I wouldn't even spend that much for my house. I'm still using the stove that came with the house. I spent about $1000 on a refrigerator 11 years ago, and bought a used washer/dryer at the same time, $375 for the set.

All of that is factored into my evaluation. I have an approximate monthly maintenance and upkeep amount I use in figuring things. Some years not much happens. Another year something breaks and you fix it. Landlords are doing the same thing. They amortize costs of property upkeep and update when figuring rents, understanding that rentals are also a competive situation.

Brian

There's a contrarian article in Fortune about the DISADVANTAGES of home ownership and the NEGATIVE inpact on the economy.

How about giving us a brief synopsis?

Determining if a person is providing sound financial advice is not always easy to do and can be very time consuming. In order to make a recommendation, I've checked out several leading personal finance experts by listening extensively to their radio or television programs and reading some of their books over a period of months or several years.