Why Are You Throwing Your Money Away Renting?

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Show this to every idiot who has ever said that to you:

"The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest."

Comments

  1. Woody9:22 AM

    "'Real estate has to be priced like any other goods,' he said. "Home prices have to reflect the economic reality.'"

    If any market is inefficient, it's residential real estate. Has residential real estate ever been priced like "any other good?"

    I rented to years during a market upswing, and often heard that I was throwing my money away by renting. My reply was that I was getting something for my money: freedom. That my landlord didn't terminate my lease for a decade was lucky.

    I know from experience that apartment shopping in Manhattan is expensive, at least in terms of time and heartbreak. Moving has heavy direct expenses, and movers sure accelerate the depreciation of your furniture.

    So renting has outperformed owning for the past five years. I'm betting that in healthy markets (ie, places where people actually want to live, see http://pewsocialtrends.org/assets/pdf/Community-Satisfaction.pdf) owning will outperform over the next five.

    ReplyDelete
  2. Woody9:23 AM

    "'Real estate has to be priced like any other goods,' he said. "Home prices have to reflect the economic reality.'"

    If any market is inefficient, it's residential real estate. Has residential real estate ever been priced like "any other good?"

    I rented to years during a market upswing, and often heard that I was throwing my money away by renting. My reply was that I was getting something for my money: freedom. That my landlord didn't terminate my lease for a decade was lucky.

    I know from experience that apartment shopping in Manhattan is expensive, at least in terms of time and heartbreak. Moving has heavy direct expenses, and movers sure accelerate the depreciation of your furniture.

    So renting has outperformed owning for the past five years. I'm betting that in healthy markets (ie, places where people actually want to live, see http://pewsocialtrends.org/assets/pdf/Community-Satisfaction.pdf) owning will outperform over the next five.

    ReplyDelete
  3. Anonymous9:10 AM

    Here's an excellent analysis and tool for comparing renting and buying.

    http://pricedoutforever.com/more-rent-vs-purch.html

    ReplyDelete

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