/biz/ - Business & Finance

>>19330358
>>19330384
landcucks cope by pretending to other people that they only pay the mortgage and ignore mortgage insurance, home insurance, utilities, property taxes, realtor costs, transfer taxes, maintenance, repairs, hoa/condo fees, etc.

Once you add it up it's far more expensive on a pure cash flow basis to own than to rent.
Take a $500,000 home and put 5% down like he's suggesting. Let's be generous and say his all in costs are only $2,500/mo. Say you take home $3500, putting $2500/mo into a house at 3% vs $1500 rent + $1000 into stocks at 7%, after 30 years stocks outperform the house.

That's why you max out your tax-free accounts with stocks first, then buy a home. In fact, there are credit and tax advantages in many countries to do this which make houses cheaper than if you go for the house right away.

In fact in my situation, where I'm taking home $3,300 and paying $1,100 in rent. Living off $550/mo is easy and comfy and I would be saving $1,650/mo.

Pic related: Start at 25k
A = Stocks $1000/mo @ 7% for 30 years
B = House with 5% down @ 3% for 30 years
C + D = Stocks $1650/mo @ 7% for first 10 years, then 5% down my stock portfolio on a house and no additional investment in stocks. C is house, D is leftover stocks.

As you can see, investing in stocks early in life is a far better decision than going right for real estate.