• derf82@lemmy.worldEnglish
    533·
    1 year ago

    If renting doesn’t make sense at half of what it costs to pay the mortgage, how does the mortgage make sense

    Where on earth is renting cheaper than a mortgage?

    Let’s say it’s in Orange County where the house is $800 grand," Cardone said. "You’d have to sell the house for $2 million just to pay the interest bac

    As opposed to paying even the same in rent, where you get NONE of it back?

    assuming a 3% annual increase in rent

    Lol, what planet do they live on?

    • CancerMancer@sh.itjust.works
      9·
      1 year ago

      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)

      • yaaaaayPancakes@lemmy.world
        2·
        1 year ago

        And this is why we have a housing shortage. Because it’s in the financial interests of owners to restrict the building of housing.

    • automattable@lemmy.world
      91·
      1 year ago

      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.

      • yaaaaayPancakes@lemmy.world
        4·
        1 year ago

        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.

      • DingoBilly@lemmy.world
        3·
        1 year ago

        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.