Buy vs Rent House - Which Is Best?

Is it better to buy or rent your house? The buy vs rent house decision is made more difficult because most of us think that renting is throwing away money. But if you buy a house you're throwing away interest payments on the mortgage and maintenance costs for the house plus the huge costs of purchasing and selling. We look at different ways of comparing the option to buy or rent.
We also provide a spreadsheet so you can play with the assumptions for yourself.
pensioncraft.com/buy-or-rent/
** Correction ** Thanks for those who pointed out we aren't subtracting the cost of share purchases in the rent net value comparison. The spreadsheet is now updated to reflect this. The breakeven for the mortgage rate is now 4.5% rather than 3%. However, the conclusion is the same, which is that the benefit of buying is not so clear-cut as you might think. Also, mortgage rates of more than 4% are likely over the next 25 years.
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[@Pensioncraft]

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[@jackiechan8840]

Thanks for another excellent video Ramin. One point I would like to make. Paying the mortgage non negotiable. Whereas investing is not. Many people would not invest as much or as regularly as they would with their mortgage. The fear of home repossession definitely focuses the mind!

[@Pensioncraft]

Hi Jackie Chan that's a good point. It would take a lot of discipline to invest a constant amount regularly. Thanks, Ramin

[@awealthstory205]

This is actually an excellent point. I think a big part of the calculation comes down to the discipline of the individual.

[@raoun04]

This is MBA class quality content - fantastic video - thanks a lot !

[@Joelio8701]

Really great video again. I think it would be helpful to factor in the benefit/security of having a fully paid home after the mortgage period and what the forecasted returns for the additional capital that could now instead be invested whilst a renter continues to rent and has a lower % of income to invest. It is also important to factor in the utility of the purchased property vs the rented accom over the period. As a renter in central London living in shared accom, it feels like living in student accom still, whilst paying £800 a month (and that’s cheap for the area).

[@TheNimbleNomad]

What a fantastic video! I have been trying to build my own excel for ages to do this calculation but my excel skills have never been that good! Amazing work Ramin!

[@Pensioncraft]

Glad it was helpful!

[@pistopit7142]

This was realy great analisis. What I would add to this comparison (along with deposit, buying associated fees, maintenace costs) is also unrecoverable costs associated with selling property.

[@mutton_man]

Ramin has that in there at 13:58 estate agents fees.

[@fuckoff3366]

Financially there's a lot of comparisons to be made but at the end of the day if you pay off your house you own a brick-and-mortar place to live. Equities won't keep you warm and dry, and money is just a social construct. Also, think about whether you want to be getting evicted from your rental at age 60...

[@HarukiYamamoto]

Like he said, renting or buying *depends* on the prevailing market conditions. He doesn't say rent forever.

[@fvlok]

You can’t live in a stock portfolio. Just check the current market! My house is paid for, and I sleep sound. The only costs i have is the property taxes, and that equates to 2.1% of my Nett salary on a monthly basis. I will take that any day over rent, or being forced to move because the lease ended. What a headache. Of course there is some maintenance to be done every few years, like painting, but I am a DIY guy so material only. Negligible honestly. Love my paid for house!

[@JayJay-fi6vv]

Love your work mate. Will be buying your course to support the channel. Jay Aussie.

[@gladysomar7551]

Great Video! I really enjoyed how thorough it was and how clearly you explained everything. However I think you overlooked one very important aspect...after the 25years of mortgage repayment the buyer doesn’t have a housing cost (rent or mortgage repayments) whereas the renter continues to pay rent!

[@Pensioncraft]

Hi Gladys that's true, but the owner of investments has a source of income and capital growth and no maintenance payments. Thanks, Ramin.

[@nachannachle2706]

@@Pensioncraft "[...] but the owner of investments has a source of income and capital growth and no maintenance payments." That is true, provided the said person makes the effort to look after his/her portfolio on a regular basis. Landladies/landlords are often compelled to fix their houses if a problem arises: this can't be overlooked otherwise their immediate safety is at risk. However, the stockmarket investor can easily forget about his/her portfolio and become ill-prepared when recessions occur. Also, there is a lot more intellectual effort and breadth involved in keeping up-to-date with stockmarkets investments, meanwhile a home owner can just watch a 15mins DIY youtube video or/and get his/her friend(s) to do the repairs. Opportunity costs come in multiple forms, well beyond disposable income, ROI and time.

[@cooper8t]

There also other niche ways to live too, off grid, canal boats, house shares, maybe employer housing benefits in some industries? Other considerations if buying a home are a lodger to counter the negative effects of a home with mortgage. This video does assume that people who rent will invest the difference. In reality, probably not what happens, but if you were to, the figures are extremely interesting and proves that the market is fairly efficient. Especially if you got a good value, cheap or basic rental. Honestly though, the information within this relatively short video (as it's impossible to cover everything, even in an hour) is excellent! Thanks Ramin!

[@Pensioncraft]

Hi Daniel, thank you! It took a while so I'm glad it was helpful. That's a good point about avoiding high house costs with alternatives like living off-grid etc. Ramin.

[@raoun04]

Hi Ramin, it would be really interesting to see how the help to buy scheme can be baked into the excel sheet that you built. That would allow us to compare rent vs help to buy. Thanks !

[@parkwaydriven92]

Another great video. This is something I have debated many times, with everyone saying that I’m throwing my money away renting! There are of course so many things that could swing this... For instance if you rent out one of your rooms or eventually let the property out so it’s just paying for itself I imagine then a property might become much more attractive as an investment? Ultimately the difference in that 25 year comparison was very close at least!

[@caseybanana8114]

Mr Brightside did you forget the massive stock portfolio renters have after the 25 years?

[@planum412]

Such a fantastic video; well researched and brilliantly put together!

[@Pensioncraft]

So glad that you enjoyed it Planum

[@coxbright]

This was a fantastic watch and so well explained!

[@x2x3456]

Great video as usual! I would also like to add a few points: - just to be fair, I'm not sure you factored in the cost of investing (i.e OCF, acquisition / disposal costs etc). I think this would balance out the figures a bit more - another great point about investing in the markets is the flexibility you get. You can't sell 10% of your house, but you can of your portfolio! The same thing goes for liquidity. - finally I find it strange that people would buy one big asset and not diversify. People should consider both buying and investing!

[@Pensioncraft]

Hi Nathanial those are great points. I've assumed that all the costs are factored into the return, but the spreadsheet could easily be changed to add those. Thanks, Ramin.

[@eezy251able]

If you're someone who has cash and doesn't want to settle down into one giving place then RENT and invest your cash. If you're someone who does t plan on moving a lot and is more or less going to live in the same house more than say 7/10 years then is makes sense to BUY. It all depends on YOUR situation and life choices.

[@aliasgharkhoyee8911]

That and what the mortgage interest rates are at the time.

[@eezy251able]

@@aliasgharkhoyee8911 Yes definitely. However buying a house with low interest rates and then suddenly they rise can hit you extremely hard!

[@traydar5]

Great analysis and thought provoking.

[@anthonyrybicki1000]

Unfortunately you can only build up a solid credit rating by owning property which will then allow you to borrow more and accumulate more assets! The UK financial system promotes home ownership over other forms of investment.Renting is a second rate experience here with greedy landlords and multiple charges for accessing rentals of which there is an insufficient number of quality homes in the major population centres. Psychologically it's better to have the choice to decorate or improve your own home too.

[@simplydividends]

Another factor to take into account upon the summary figures of rent v buy is the liquidity. Your example shows a small advantage to rent, but that advantage would increase some more as to access the money tied into a property, fees would be involved selling. As opposed to investments in an ISA which would be totally fee free. This rent v buy debate is a fascinating one and has a lot more to it than what one may have first thought. Another interesting topic is taking out a short term mortgage v long term mortgage and investing the rest. I think it worked out that as long as stocks returned about 3.5-4% per year, a long term mortgage worked out financially better. But that of course assumed a fixed interest rate. Personally my opinion is to offload any household debt as fast as possible, a Dave Ramsey approach I guess. But she calculations certainly give food for thought!

[@IncomeBoost42]

Great video. I love your thorough analysis!

[@Pensioncraft]

Hi Income Boost, I'm really pleased you liked it and thank you for taking the time to comment. Ramin

[@HamiltonRb]

There are certainly intangibles as well that favour home ownership, such as private garage, garden, ability to renovate as you wish and ability to entertain much easier, depending on whether you are renting a home or apt. I would also point out that home ownership is forced savings, whether you pay the mortgage yourself or someone you rent it to does it for you, which is far less chance of happening in the stock market. You have to pay your mortgage in good times or bad, and people are reluctant to buy & sell on a whim, where as people panic sell in the stock markets, there for locking in losses.

[@herculeholmes504]

I agree. For some people who are happy to travel light it doesn't matter much, but you're seriously limited on what you are allowed to do without the permission of the landlord in a rented property, and you don't get your money back on any improvements you make. The landlord might object if you're in the habit of using your backyard as a workshop or you want to turn that second bedroom into a workstation.

[@robjmstephen]

Thanks for the video, Ramin. Really clear. Quick question, would an interest only mortgage (rather than a repayment mortgage) make any different to the fundamentals of this analysis and ultimately impact the spreadsheet? Thanks in advance!

[@leesmith9299]

Great video and I've often had this discussion with people. The mental block for people seems to be they won't take stock market risk but they are happy to take house price risk so to them it's the verses cash comparison that counts. Illogical but it's what I've found. Also I have one query with regards to the assumptions made: You use average house price vs average rental amount. Could it be that the average owned home is more valuable than the average rented home? So like for like might be a higher rent than compared here.

[@aesopshair6690]

Surely a fundamental consideration is that a large number of private rental properties in the UK are yielding a profit to the landlord, if they didn't they would sell. ergo there will almost always be a premium to renting a property compared to buying over any extended period of time. I would also question the magnitude of the maintenance figure - this may be correct for some properties, but £100k is a considerable amount, even over 25 years; and presumably a landlord would also incur a similar maintenance fee, which any tenant can attest is not usually borne entirely by the landlord! One final point is that property investment in the UK is somewhat of an obsession within some demographics and politically it would be frowned upon to upset the apple cart, hence 'help to buy' and other reliefs and incentives that have continued to inflate the market over the past few decades. Like the video though, great analysis! 👍😃

[@charliejames9440]

Landlords have interest only mortgages, so not quite a fundamental comparison at all.

[@dunk8157]

Great viseo. I think this is quite accurate, but probably does depend on some variables like how good a deal you get on the rent. Costs of maintance, interest and fees are pretty high. Thatcher put the idea into the public that everyone should own a house and I do think that people don't really work out the costs. After all they are being sold a huge loan so it's in the banks interests to keep this notion going.

[@jbullionaire2749]

Interesting. Although I think the type of people who generally think renting is throwing money away, will also be less likely to invest and look into things in the detail that you have. They would therefore likely stay in cash if they were forced to rent, rather than utilising the money to its full potential. This would be the worst of both worlds.

[@johnnyocvinylrecords1079]

Sad but very likely scenario in our consumer society

[@user-cp2hr5mb3s]

One thing to note is average rent price may not allow you to live in the same quality of house as an average mortgaged house. I cant find the numbers online but the example in this assumed that the landlord is earning a 3.7% yield if renting a £300,000 house. £926 a month rent where i live in the south east will get you a house worth about £220,000. Other points to think about: Do landlords not buy cheaper properties on average i.e. more flats and cheaper accommodation that people who cant afford a house will rent. Does the average rent include houses of multiple occupancy where you rent a room and share the rest of the house?

[@Jordan_Warrington]

This was great, I would like to see how the value differs if after the 25 years you held the property and invested the morgadge payments. That being said I would also like to see what happens if you moved a few times and sold the property before the morgadge had ended as alot of people don't stay in one place

[@C4sp3r123]

Excellent video and explanation. The only things I would add is that there is often a large value to knowing your house is yours and you can't be removed from it and you can do what you want with it. To others that can also be a cost though. Also I don't think you included any costs associated with renting over the 25 years in terms of changing rentals. You are likely to have the expense of moving more times renting than if you own a home. The argument for renting would obviously be much bigger if those stock market returns were higher by even one or 2% but I think you were very fair in saying 6.0%. Overall an excellent video well explained and should be watched by any person who utters the phrase 'rent money is dead money'!

[@TDubya811]

Yes, you make some good points. However on the other hand the average UK family moves home something like 7 times during their lives. That is going to be very expensive in stamp duty, legal fees, estate agent fees etc which dont apply if you rent. Many people have to move for work. It all depends on house prices, mortgage interest rates and fees, vs rental costs, plus if you are likely to need to move or if your property market is booming or busting when you buy and sell.

[@C4sp3r123]

@@TDubya811 Yes, the costs of moving home are likely to be more (much more I would think) expensive if you own the home. To some people, for example many in the F.I.R.E. section of society, would see home ownership as a huge constraint on their freedom, to others they like to have the feeling of security of home ownership. Overall I thought it was a very well done video which was well balanced and gives an excellent starting point for people to adapt the points raised to their personal circumstances and outlook on home ownership and lifestyle. Many renters don't consider a lot of the points raised in this video when thinking the rent is dead money the main ones being mortgage interest and maintenance costs.

[@Pensioncraft]

Hi C4sp3r thank you! The psychological aspects are important as you say. And I didn't fact in moving costs for renting or buying and again that's a good point about moving more often if you rent. In other countries long-term multiple-year rental is common but no so much here in the UK at the moment which is a pity. Thanks, Ramin.

[@TDubya811]

@@C4sp3r123 Yes, for renting to have any chance of long term financial advantage it is important that people invest the deposit and savings in renting vs repayments (if they exist). I get the feeling that most renters don't invest or invest in risky venture and get burned so may actually be better off with the forced savings plan of house. FIRE people are different, they know what they want and what they are doing to get it. Several friends bought new homes from developers for top dollar and spent a lot on furniture as well, with a local property slump they hit negative equity and some also lost their jobs so sold at a massive loss others didn't want to sell so ended up working away during the week. They are the opposite of FIRE whatever that is...

[@C4sp3r123]

@@TDubya811 I think you are very much correct that the vast majority of rents do not look to invest the deposit. I hadn't thought of home ownership as a forced savings plan before.

[@adamabbas1487]

This video applies more to people who don't plan to live in the accommodation they buy. But then again it doesn't factor in the rent you could make as a landlord. Another variable to include when it comes to inflation is that without wage indcreases, the amount a landlord can get away with charging decreases or at the least barely increases.

[@connormcewan2666]

From a straight numbers point of view over 25 years then yeah what you're saying makes financial sense, however, after the 25 year period that mortgage payment drops to zero, you have a paid off asset and more free cashflow while after the 25 year mark for renting you will continue to have to rent. So while having that money saved might be a big plus, the cashflow implications can have a serious impact on retirement, it's another additional cost. It also doesn't take into account having a shorter term mortgage. Having said that, I enjoyed the video!

[@PassiveIncomeTom]

*Owning real estate is good. Owning real estate investments is even better* !👍

[@Pensioncraft]

Hi Passive Income Tom that's a good point, there's a big difference between owning to live in the property and buy-to-let. For this video I'm focussing on buying a property to live in. Thanks, Ramin.

[@AR-jm5vy]

Good video and food for thought! However, what was not discussed was the effect of inflation on your mortgage debt. A concept of inflation induced debt destruction. I assume this is one of the ways central banks will reduce the debt they owe from the massive fiscal policy measure. If interest rates are lower than the rate of inflation, then the real rate will reduce the debt you owe to the bank over the 25 year period which will leverage the appreciation on your return on investment. Keep up with the good videos. Thanks

[@mat86100]

well this video has aged well! Really nice. I've seen a few other videos which compare unrecoverable costs, but this is the first video I've seen that factored in capital gains. You'd think the leverage of the loan would be the deciding factor (2% on 600k is a lot more than 8% on 30k) but it doesn't always work out that way. And if you move and sell before 25y, expect those costs to go up significantly. On the other hand, you can get a good deal on a house. Unlike a stock. You can find houses that need to be sold quickly, or houses that are in better shape than they look, and you can make reasonable bets on which neighbourhoods have a decent chance of beating the national average price increase. There is probably a smart calculation to be made that incorporates a ratio between the buying price and rental price per square metre, to give a good measure of buy vs rent for different cities at different interest rates, but I'm not smart enough to do it.

[@TheSpanishGuitarHub]

In London there is no way you can rent a 300k house for £926, it is more like £1300-1400. So it makes much more sense to buy to be honest. Rent is very expensive here.

[@ruigomes8652]

I rent a 200K in london for 850 per month.

[@manatee1999]

I think you a missing the point. Most neighborhoods do not keep there value if you rent you can move on. Look what happened in 2008 how can a house be valued at one piece then be 50% devalue the next day? I think it is a scam. Just look at history.

[@TheSpanishGuitarHub]

@@manatee1999 Now those houses are prices up again very high. Buying is always better then renting, or in London for sure. I am just waiting for the next financial crisis and will step on the property ladder.

[@TheSpanishGuitarHub]

@@ruigomes8652 You are lucky, my flat worth about 225k and we rent it 1100

[@oling2812]

That's completely incorrect. A quick Google shows that the average rental yield in London is 3.7% - if you take (926*12)/300000 = 3.7% absolutely bang on. Sure, there will be properties with higher and lower rental yields but as an average that figure is exactly right for London in the current market. So, it actually makes a lot more sense to rent than to buy in London currently as property prices are so inflated. In other large cities in the UK with much higher rental yields, the opposite might be true.

[@manckid7795]

Thanks Ramin. I’m about to close on a £250k house after selling my current house at £115k and the total fees for the transaction are £9,100.00! This is clearly unrecoverable along with other things like home insurance and life insurance on the new house. That same £9,100 invested in equities would return a very pretty penny after 25 years!😩 There’s no correct answer to buying/renting but to me in my opinion, I think the best strategy is to buy your own place AND invest in the equity markets via both an ISA and SIPP. I also think a small investment in a GIA could be useful too as you can take advantage of the dividend allowance later on. The problem with renting is, that after the 25 year period, you’re still paying rent and in 25 years time, rents are going to be colossal. Not an ideal scenario when you’re wanting to retire. Just my opinion of course, it would be neat to hear other people’s opinions to mine above. 😊

[@Simon-jj2pu]

Fascinating, it would be interesting to crunch the numbers when you choose to downsize in retirement. ie sell and then rent and invest the proceeds in stocks using some (or all of the dividends) to pay rent. And maybe then become back into the property market

[@deepsudeep]

This is so relevant in 2023 when interest rates have gone up along with the maintenance costs!

[@johnny-S]

A very thorough video and well analysed - as always on this channel. However it only looks at pure numbers - and doesn't take into account the emotional points of owning vs. renting: If I rent then the landlord can evict me at any time, the price of the rent will almost always go up, and I am at the mercy of the landlord for any improvements I want to make to the property. If I buy my property - I can choose make over-payments on the mortgage and thus reduce the monthly payments and even pay it off early, the cost of the payments goes down over time instead of up, and I am in control of what I do to improve the property. Indeed, if I chose to - I can even rent my house out whilst I am away and use that rental income to pay for another rented property until I decide to return home! Most importantly though - for a family man, "And Englishman's home is his castle"...but not if he rents it! Great video though - keep them coming.

[@eezy251able]

A lanlord cannot evict you at any time. The rich will always more or less say "rent where you live, and buy what you rent". The house you buy and live in will never pay you and provide that cash flow! Think smart....

[@johnny-S]

@@eezy251able I own my house. I could rent it out and take an income from it, but then I still need somewhere to live! So I choose to rent it to myself for nothing, and then use the money that I would have had to pay out in rent to invest in other assets... Seems smart enough to me.

[@eezy251able]

Of course. But it depends on the asset/equity within the property you're living in? How many investments could you buy if you were to sell your property? Not the mention the appreciation you can achieve over time?

[@janewhitzend688]

Excellent points. Some other considerations in the UK from my friends that rent are....most rentals need a deposit, frequently not returned sadly. Also it's become common practice for management companies to charge renters an annual fee to inspect the property they are renting. A lot of the maintenance work ( if you are lucky to get it done) is done on the cheap and these properties are sub standard compared to owned one, often in poorer location s unless you are well off. My friends who rent pay more per month on their poorly located, badly maintained homes, than we do in our comfortable house in the country side. This is the situation in one of the cheapest to live areas in the UK. I accept your figures and it was an awesome presentation but I would hands down prefer my situation and go the pay your mortgage off asap and have investments too. Another fab video thank you.

[@FergusMcCarroll]

I've never had a problem having my deposit returned, but either way it is typically only 1.5 month's rent... Rental fees were overhauled last year and agency fees are no longer chargeable to tenants. Your friends need to find better landlords, or hold them to account.

[@janewhitzend688]

FergusMcCarroll sadly 1.5 months rent is a great deal to many people , especially those on lower incomes who get the worst kind of landlords. Whilst I agree with you, it’s not always that easy for some to fight or find the cash to do so. Especially those who maybe disabled and unable to work or have any spare cash to fight such battles. I think we can both agree that it’s a grey area for certain members of the community. I still think this is an excellent video for those of us with the financial means to choose , but I wanted to point out that not everyone is this fortunate for some balance. I also know not all landlords are unfair etc.

[@PhillipHomer]

@@janewhitzend688 sadly those people wouldn't ever be in a position to buy either though, surely?

[@andredeoliveira4125]

Thank you, great analyses :)

[@Pensioncraft]

Thanks Andre De Oliveira, my pleasure. Ramin

[@jenny01317]

Brilliant content. subscribed!

[@Pensioncraft]

Thanks @KY JeLLY I really appreciate that! Ramin

[@hichdoedi]

Great video! My mother doesn't believe you though ;-)

[@Pensioncraft]

Glad you enjoyed it.

[@StephenDuncombetv]

This is an age old question. Not sure that 1% maintenace for the year is accurate, its a helpful yardstick but depending on the age of the property they could be considerable especially when we get into listed buildings that we have in the UK. They don't have that issue I guess in Canada. This is topic that I recently explored too.

[@rgrtnyjjc]

Another excellent video. It’s amazing how often that tired old canard “renting is dead money” is repeated in the U.K. and renters looked down upon as lower status “what they’re ... years old & they still rent!” In other countries such as Germany it is much more accepted. I’m not sure which throwaway phrase is worse the “rent is dead money” or “all investing in the stock market is no different to gambling”.

[@Pensioncraft]

Hi rgrtnyjjc, Thank you for taking the time to comment and I think you are correct that the UK is more home ownership focused than many other countries. Cheers Ramin

[@cnam1258]

It's not a tired old canard, it's true. Anyone telling you renting is better than buying is completely out to lunch.

[@rgrtnyjjc]

C Nam my point wasn’t about renting being better than buying or vice versa, they both have pros and cons. Onto dead money, this is a financial term which refers to money invested that isn’t providing a return (interest, dividends etc.). So it should be clear that rent is not dead money as there is a very tangible return on your money - it provides a roof over your head. Though renting isn’t investing into asset there’s a multitude of other options for investments and as this video and other comparison videos and articles show, the person renting whilst investing in the market tends to have an equal or higher net worth in the end. So my original point (though I may not have made it clearly) still stands: “rent is dead money” is a nonsensical phrase and simply not true.

[@cnam1258]

The entire premise of this video - which you also espouse - is that somehow buying and renting are ultimately equivalent in terms of advantages and disadvantages. Sure, riding a camel is better than driving a car in some unique situations. But the bottom line is that most people will buy a house via mortgage, and this is the same as buying stock on margin. The tremendous difference, however, is that your property value will never tank to zero, and even if your property value plummets, you still have a roof over your head. At the same time, as with margin trading, 100% of any capital gain goes straight into your pocket. I am here to dissuade others from heeding the worst advice I have ever received in my life, and that is this "hey, renting is also good" nonsense. It's nonsense.

[@fahadm2852]

Thanks a lot mate really helped a lot

[@Pensioncraft]

Hi Fahad, that's great! Ramin.

[@lanodramallama]

I guess this comparison was complicated enough without bringing mortgage overpayments into the equation. I had been wondering recently whether or not to make overpayments or invest with my disposable income. Would be interesting to hear your take on that little dilemma. It would all depend on the figures, of course, but an interesting conversation to be had there.

[@lanodramallama]

Mr Brightside Exactly, it’s specific to the circumstances of the individual. I calculated that although the interest rate on my mortgage was relatively low, it was on a debt of around five times the cash I had at hand. So I would have to earn a very healthy rate of interest indeed on any investment I made to warrant not overpaying. So that’s what I’m prioritising for now. I can’t remember the exact sums but I remember being quite sure I was doing the right thing - ha ha! You make some good points. Thanks for taking the time to write them down.

[@eezy251able]

NO. Dont pay your mortgage off early. It doesn't make any financial sense unless you have multiple properties, then it does!

[@eezy251able]

The house you live in will never pay you and provide you that CASH FLOW. paying of your residential mortgage here and there is a poor mans mindset. You'd be much better off investing that money and trying to make that money work for you. Houses are built for the banks.

[@lifestoryguy]

Yes, but the factors you add into the model change the outcome somewhat. if you buy a cheap house on an auction site for £35,000 which you can do in places like Glasgow or buy something cheaply through the right to buy scheme etc that would affect it. Or for example, if you decide to pay the mortgage off on your home early and then also invest the money saved from your mortgage into the stock market you can benefit from owning a home and catch up with the renter especially if you have a longer investing horizon too. Of course, there are also other factors to consider which are intangible. For example, if you rent a property the landlord could sell it and you'd have to move even if you don't want to and some people might prefer the certainty in terms of their kids schooling needs etc instead of having to move at the whim of a landlord and distrupt their kids lives or move away from friends and family. Also speaking as a homeowner of a small property which I've lived in for 22 years I can honestly say that including the cost of roof repairs, decorating and general maintainance I've not spent more than £10,000 on the repair and maintaince of my property over the last 22 years. Indeed, because i paid my mortgage off in 9 years and 2 months I saved myself the same amount in interest as I've spent in repairs and maintenance. Of course my property is very small, but it does go to show that if you are going to buy a house you should only buy the kind of house you need not the most you can afford and then pay it off early just as Warren Buffewt did with his house which I believe he still lives in to this day. Of course, the Ben Felix video is excellent and there is a valid point which people could apply to their decision on whether to rent or buy a home. For example, where I live in Glasgow the cheapest property you can rent is £350 per month that means a total rental cost of £4200 per year. Now considering it's possible to buy the same property you'd rent in Glasgow for around £40,000-£50,000 and end up with a mortage that's a lot less than the rent for the same property, I'd guess in this instance that buying a house would be worth it. Indeed, given you can also buy a three-bedroomed property in Glasgow for around £80,000 perhaps a bit less It would probably still be worth buying a home than renting. Where it might make sense to rent rather than buy a home is in places like London where it's practically impossible to get cheap properties like you can in cities like Glasgow. In short if you are going to buy a property over £100,000 then you should consider renting and investing in the stock market but if it's less than that perhaps owning a home would make sense especially if you commit to paying it off early to reduce the amount of interrest you pay.

[@nathanandsopa]

I think you'd be hard pressed to find a rental price of £926 on a £300000 house. In London, you couldn't find a 2 bedroom apartment for £926 a month.

[@Pensioncraft]

Hi Nathan & Sopa the comparison was between an average rent and an average house. The London market is completely different from the rest of the UK and, as you say, is extremely expensive. Thanks, Ramin.

[@aliasgharkhoyee8911]

London is extremely expensive in both respects (buying and renting), but just thinking relatively, its rents are in fact are low versus the rent-vs-buy ratio in the rest of the country. So in London it absolutely makes sense to buy if you can afford it, rather than renting (even though it's relatively cheaper to rent) - there are plenty of 300k houses but afaik no possibility of a 900 quid monthly rent on such houses.

[@mariancounsellor]

Depends where you live. I’m in Birmingham renting a 2 bed property for £725 and there’s plenty of decent properties for £575. London is expensive compared to most places in the UK

[@paulthorpe766]

With aversge of 34 yrs post mortgage (i.e. from average final yr payment made on a 25 Mortgage term) to your death the 'free' house usage in that period with a yield of circa 6-8% compound growth must make ownership way better or am I missing something. Surely Investment rtns won't get close?

[@educatetube]

There several problems to your assertion. 1) The rent may and most likely will go up as the mortgage rate goes up (since the landlord would want to make money in their investment). 2)There is a possibility of getting kicked out of your rental home if you cause some problems to the rented property. 3) It is not always guarantee you will be able live in the same place throughout your lifetime; you may be like a nomad (may be hard if you have a family). 4) Having a house give you borrowing power and others seem to trust you more if you decided to borrow money from private lenders for your startup company. 5) You can write off business expense if you use your house as a workplace. 6) You can alter your home the way you liked; the way you want to live. 7) You feel safe in your own home and less stress (psychological). As mentioned by others, the best option is to have a house and pay it off quickly and invest more once the house is paid up.

[@anniealexander9616]

I live in the U.S. The majority of people's wealth comes from their home. Renters just don't build the same wealth as tenants. Reasons for this might be that owners will typically continue to make their mortgage payments when money is tight but investors stop investing when money is tight. Also, homeowners usually do a certain amount of home maintaince themselves to keep cost down. Wise property owners have learned not to sell. Begin with a starter home. Pay it off and upgrade. Rent the starter home to good tenants who will pay for the initial cost of the home in a few years. Buy a few investment properties whenever you find deals too good to pass up. Buy a vacation home for retirement. Pass these homes down to the next generation. They don't pay a mortgage or rent. They pay taxes, insurance, and maintaince.

[@thomashenry8907]

How come the stamp duty and other buying costs do not affect the house price gain? I'm looking at your spreadsheet

[@Radnally]

In the US, the cap gains tax on selling your residence is free up $250k profit. After 24 months of ownership. Very hard to beat that.

[@Pensioncraft]

Hi Radnally that sounds great! In the UK if you sell the house you live in there's no capital gains tax to pay (Private Residence Relief www.gov.uk/tax-sell-home). Thanks, Ramin.

Fantastic analysis.

[@Pensioncraft]

Hi Luxus thank you! Ramin.

[@stlouisix3]

Amazing video!!

[@Pensioncraft]

Hi St Louis IX thank you! Ramin.

[@drmsgp]

Does applying in Lifetime ISA conflicts with investing in real estates?

[@InvestingEducation]

I prefer buyin that first home. Peace of mind and privacy is priceless

[@paulmolyneux9503]

What if a landfill site or prison popped up next to your first house?

@@paulmolyneux9503 that's like the lottery :) you might win... Renting makes sense for people who move a lot for their jobs like every few years. If you are likely to work at the same place or the same area and you are "ok" with the surroundings then owning your home makes sense especially after you paid off the mortgage and your monthly expenses are much lover you can afford to go part time or take a less stressful but low paying job. If you rent you need to make sure you have constant income. Imagine having your home paid off but you lose your job and can only find something which makes you enough for food ...at least you have a roof over your head, if you rent in the same situation you end up on the streets :(

[@paulmolyneux9503]

@ but most mortgages are at least 25 years, so it's not exactly round the corner for a first time buyer to be living a life free of mortgage payments.

[@InvestingEducation]

@@paulmolyneux9503 I would move and buy another place

[@paulmolyneux9503]

@@InvestingEducation whilst in negative equity? Because if you didn't want to live next to landfill site, then you can be sure that other people wouldn't want to either.

[@fade13567]

Although presented with clear facts I still don’t know if this is a clear one size fits all assessment. My house just outside of London is a 4 bed detached. It cost me £410k 3 years ago. It’s now worth £465k - £477 ( apparently) and if I wanted to rent an equivalent property I would pay in the region of £1750-£2250. My mortgage is £1340. I purchased a home in 2014 purely to rent out ( the information in the first paragraph is a second home but my first family home) This house is in a seaside island off of Kent not an amazing place but I believed it had potential. I paid £110k for a 3 bed terraced house - spent next to nothing getting it ready for rent. It’s now worth £177-£190k. In that time I have never had a break in tenancy. My mortgage was initially £525. It was rented for £700. My mortgage is now £413 and it rents for £750. ( I could get mortgage rental value of £850. But the tenants have been great) In the 5+years of owning the property I would say I’ve spent the better part of £2000 ( including initial preparation costs to get the house to rental quality ) The difference in rent is used as a “ passive income” that I overpay the mortgage on Kent seaside house with. I appreciate the above figures mean little to nothing to most people but to me that shows I am personally in a better place through buying. Well I believe I am!

[@Pensioncraft]

Hi fade13567 as you say I'm just trying to show that the comparison isn't as clear-cut as many people think. Your examples illustrate that. There are also psychological factors that are important i.e. people like the thought of owning their own place and the feeling of security that comes with it. Thanks, Ramin.

[@fatmanchew909]

Buying a home cost me an extra $13k a year in taxes plus insurance companies forcing ne to upgrade your pipes, electricity and HVAC (I changed the pipes and electrical but never used the HVAC) on older homes. Also having to travel months on end I ended up having to rent an apartment plus pay the mortgage. Also anyone who lives in an HOA might as well rent because you can't do as you please with your own home.

[@deanej1]

Yes, but rental costs are likely to be highly correlated with mortgage interest rates. (Also, the difference in your example of a few thousand, in today’s money may actually be quite small. Whereas, there are non-financial considerations: freedom of movement for renting; control over your own property for buyers/owners; etc.) The other factor that needs to be considered is human nature. If we don’t have to make a mortgage payment, we may easily choose other (less profitable) ways to spend our money. (I recently watched a fairly thought provoking lecture on saving delivered in the MIT OCW series - which made one realise that it is very difficult to account for human nature - I’ll post a link when I have checked my history.)

[@Lawtasaj]

Too many variables...just do what is right for you and don't stress about it

[@Kryp7nite]

There is something really confusing, because if I plot all the variables from the video in the spreadsheet, it gives me the Exact numbers from the video, but there are 2 more subtractions from the Rental Net Gain in the spreadsheet, that do not exist in the video. Initial Investment = -£35,000.00 and Additional Investments = -£121,475.07, which brings the Rental Net Gain from £112,655.96 to -£43,819.11. I do not understand at all why do we have to subtract these 2, when we are not doing that in the video???

[@calloutman]

A property costing £300k would have a higher rent than £926pcm currently in the UK.

[@GavinLawrence747]

Love this channel. Does anybody think that perhaps on a sort of primordial level (not sure if that's the correct term for the context..) that a man needs to have a bit of land to plant his flag on?

[@Pensioncraft]

Hi McCready 747 that's true, I like owning my own home. But another person made a comment on a previous video which I liked along the lines of "try not paying your taxes and then see who owns your home". And I've always owned with a mortgage so in a sense I'm just a few missed mortgage payments away from losing ownership. Despite that it does _feel_ like the house is mine. Thanks, Ramin.

[@johnnyocvinylrecords1079]

Grant cardone all the way baby!

[@lnewton3677]

Nicer sound quality than the current podcasts- would be good to redo this analysis given what we know now 😮

[@biffmister941]

Most investment advisors highlight the positives of inflation, but do not mention the negatives of inflation. In this case at 13:50 the gains are in fact impressive but you would be lucky if the 100,000 of 25 years in the future money could buy you the equivilant of 30,000 of stuff you could buy today, (the real value of the money magically shrunk)!. Here is an example from my personal experience. When I was a kid in 1970, Canadian 1965 pure silver dollars were actually in circulation at that time and were used to buy stuff, but they were kind of a novelty because they were big and heavy. Anyways in 1970 I could buy 10 chocolate bars with a silver dollar. Today in 2019 about 50 years later, one chocolate bar costs more than one canadian dollar. Now I still have a few of the silver dollars that I had when I was a kid. And in fact I could buy about 20 chocolate bars with a real silver dollar. The point is that regular paper money or money in the bank or the money that you made on your house or your investments shrinks pretty dramatically. Gold or silver at least has the potential to retain some value.

[@cybetica]

Hi, very good video series. However if I could critique one point. Your house prices are not comparable. You used the average rent, but not the average property value (

[@ArronLukeMusic]

Hi Ramin. I'm not sure if this is the right place for my question. Im looking to buy and want to get a LISA. Going to be saving for about 3 years and will be the full amount each year. Would you recommend a cash LISA or a stocks and share LISA? And any particular provider? I also wonder if anyone knows if the money you save in a stocks and shares Lisa could be completely lost if the investment doesn't perform? Thanks for any help!

[@Pensioncraft]

Hi Arron I don't make recommendations, I provide financial education. There are pros and cons for stocks and shares and cash LISAs. With a stocks and shares LISA you have the _potential_ for greater upside if your investments perform well, but there's a risk that markets will fall and you'll end up with less than you put in. A cash LISA has lower risk but also the return is going to have a very limited upside given the current low level of interest rates. MoneySavingExpert usually offers good comparisons of products including LISAs www.moneysavingexpert.com/savings/lifetime-isas/ Thanks, Ramin

[@kh-wg9bt]

I bought a 195k pound house. Used LISA for 2k bonus. Got 8k deposit contribution from the housing company. Used help to buy for 40k off capital which is interest free for 5 years. So I've got 60k off the capital off the house straight away! So my mortgage is 400 quid pcm! No one can tell me buying isn't the best option if the price is right.

[@stevo728822]

Historically, I think the answer depends upon where you live and how the property is built. Eventually all properties turn to rubble. A property in a potential war zone is at risk of being obliterated. Or a property in an earthquake zone may have a short lifespan. Or a property in a country on verge of revolution may see the title deed disolved. Many properties also suffer from suffer from suspect build quality. These are cases where renting would make more sense.

[@404TRUCKERTV]

Did you consider the imperfect market of real estate. the opportunity to negotiate very low pricing. most real estate investors never pay market prices for property. your average investor, usually pays 30 to 60% below market value which adds 100s of thousands of savings over renting. there are occasions a tenant can rent a place below market as well. if an investor or buyer negotiates a deal 60% below market and adds $10 or 15k of improvements and does the work himself, wouldn't he out save someone who rents long term.

[@deanboman]

Who does pay 3000 plus pounds in maintenance per year ?! Never heard of such thing here in the UK

[@biffmister941]

I have spent less than $20,000 Canadian in maintenance in 28 years owning my house since new. I can see it possible that an old house with issues it could cost a lot more than this, but I think 100,000 pounds in your example at 13:50 would be at the extreme high end. Your example spends about as much in one year that I spent in the last 8 years. 100,000 pounds is about 200,000 canadian dollars.

[@Pensioncraft]

Hi Biff Mister, the thing that increases the maintenance cost dramatically is inflation. Services such as plumbers and electricians and raw materials if you do it yourself will all rise in line with inflation which at 2% per year inflates the cost dramatically over 25 years. 1% is the estimate for maintenance that most people use but that includes large one-off costs like roof repair and boiler repair and smaller ongoing costs like insurance. Thanks, Ramin.

[@muffemod]

Sample size = 1. Thanks for your insight.

[@GenExDividendInvestor]

A significant of my net worth came from buying my houses at a great price, living in it for a few years, then turning around and selling it.. and rinse repeat. I was blown away when I did this the first time and made more profit than my annual salary, and I got to enjoy living in it. I guess thats why they say you make money in real estate when you buy, not when you sell...

[@rollojarvis6567]

This isn't a possible reality for people living in big global cities e.g., London, New York, HK

[@funkyguy99]

It's only possible in an environment where everyone is willing to borrow credit to own a house which drives up the value of your home but once people decide that houses are overvalued and not worth getting into huge debt then credit dries up and the market corrects itself to it fair value. Knowing when to get in and out is the key to increasing your wealth.

[@GenExDividendInvestor]

@@funkyguy99 Good point.. I offered less than realtors said the buyers would accept (and they accepted), and got lucky when I sold sometimes.

[@georgios9384]

I think that the video title is a little bit misleading... Buying a house it doesn't mean that you stay there for the rest of your life, it doesn't mean that you cannot generate passive income from your own house too. Moreover, renting a house it doesn't mean that you have to invest your money in stocks. That said you can be on rent and invest your money in real estate or elsewhere. From my point of view, the big difference between renting and buying a house is that owning a house can give you opportunities to generate passive income in the long term, which is very important. If one has a serious accident in his/her life, or any kind of income loss, or face a serious disease then having assets that cashflow might be the solution to all the above problems. Being on rent you actually pay someone's else passive income.

[@11Alisher]

I increase my net worth my buying my house and living it for couple of years, hopping sell at much higher price after doing some renovation and buy another cheap property and just repeat. Wonder if I can make a good profit out of this, or just rent it out and buy another property need to learn more about, need tune in into more videos of yours

[@Callum29D]

Your strategy only works as long as the government and the criminals running the building firms continue to restrict housing supply. You can't flip in a downward market.

[@ianbarrett4166]

Rent why do I want to own something after paying all that money over my lifetime. Plus I like paying other people’s mortgage I feel like I’m doing a good deed at the end of the day.

[@ben-graham]

A share house is even a cheaper alternate to renting (with the right people/house), and you can save & invest much more...

[@Pensioncraft]

Hi @Ben Graham, very true and thanks for your support. It's great to see you have joined our Patreon community as well as KZbin! Ramin

[@Vikas-pv3ie]

I feel the expense or rent is underestimated in this. For a 25 year horizon, the rent is likely to increase in line with house prices and also in line with increasing mortgages if interest rates go up. Also for a 25 year horizon, the person will need to keep renting bigger properties as his family expands. A more realistic rental expense may make buying a house a better choice then renting.

[@PhillipHomer]

Won't that person also have to keep buying bigger properties as his family expands? I suppose he can start downsizing when they flee the nest... although if my Mum is anything to go by, that probably wouldn't happen :)

[@Vikas-pv3ie]

@@PhillipHomer Yes, you are right that one may need to buy bigger properties. But at least they have a choice to make do with smaller house but a landlord may not allow a big family in a small house. The freedom and peace of mind that comes with having your own house is valuable. In general rents would not be very different from interest expense of an interest only mortgage. Overall I see no benefit in 'rent only' choice.

[@ianslater5550]

What about the situation where you buy a house for £300,000 on day 1? The spreadsheet doesn't work.

[@Pensioncraft]

Hi Ian, the spreadsheet assumes you're financing the house purchase with a mortgage. In the situation where you buy the house outright, it's a straight comparison of the house price increase rate minus the maintenance rate (3%-1%=2% in my example) versus the capital gain on shares (6%) minus the rent. So I suppose in the spreadsheet you could set the deposit to £300,000 which tilts the outcome to be hugely in favour of renting (house price net gain is £223k after 25 years vs £1.4 million minus rent of £360k = £1 million net gain for renting). Thanks, Ramin.

[@jaroslawmorawski4914]

This only makes sense if they both die after 25 years. Otherwise one person carries on paying ever increasing rent while the other lives mortgage free.

[@TheSpanishGuitarHub]

Exactly, if you buy your payment will finish at some point.

[@CoachPursuit]

Compound interest in equities will beat property value increases, especially after 25yrs. Plus.. I'd rather be living off the interest and/or dividends from my stock portfolio and renting wherever I want globally, than being tied into one house. Flexibility + liquid assets or no liquid assets but a paid off house. Tough decisions. Can't chip off some bricks to pay for luxuries!

[@THE-AIDEN-PROJECT]

You should narrate audio books on the side 👍 Do you rent Ramin?

[@Pensioncraft]

Hi essextreme I am for rent at just £80 per hour. A bargain! Thanks, Ramin.

[@ephphatha230]

Maybe a video about buying leasehold vs freehold?

[@Pensioncraft]

Thank you ephphatha230, I'll certainly consider it. Ramin

[@wadeswades2659]

excellent content

[@Pensioncraft]

Thank you Wades Wades, i'm pleased you liked it. Ramin

[@TheSolarAge]

If I buy house I can make it comfortable for my family. If you rent a house in UK you get dump sh...t hole for the £900 /month.

[@Pensioncraft]

Hi Piotr that depends where you are renting. In Northumberland you can rent a 4 bedroom detached house for between £800 and £900 per month e.g. www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=REGION%5E61333&maxPrice=900&minPrice=800&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords= If your job is somewhere reasonable in terms of rent it can make a massive difference. Thanks, Ramin.

[@Jaagorenow]

Hi, there is huge difference between property and shares in UK. Share can be bought with pre tax money when you invest through a pension. There is no way to buy and maintain your own house with pre tax money. So shares win hands down compared to house. Period.

[@forresttter]

Exactly Preetesh! It would be good to update the spreadsheet so you can choose your marginal rate of tax and opt to invest via a pension. If you're a higher rate tax payer that means every £1000 you invest instantly becomes £1666.66. I guess that doesn't take into account tax on the way out (vs investing via an ISA for instance), but still hard to see how investing in a house post-tax can compete with investing in a pension pre-tax.

[@forresttter]

Mr Brightside good point, would be interesting to build all these factors into the spreadsheet and see if it makes either option a clear winner

[@SoeaOu]

Does the arguments in this video stay the same if we take a 50 year period of buying vs renting? I mean what would the next 25 years look like if the video continued and not stopped at 25 year period?

[@Luke-kp1px]

it would look the same

[@stopato5772]

The key to property ownership is land - buy cheap land without debt close as possible to the city, and wait for 20 years.

[@789jmw]

I bought my first house at 24, and thankfully have lived for a lot longer than 25 years since then so we really need to extrapolate this beyond just the 25 years of mortgage payment. How about over 50 years while rents continue to rise when the mortgage is paid off and the house value continues to increase? and of course lets not forget being able to leave something of considerable cash value to children/grandchildren.

[@Pensioncraft]

Hi John, maintenance payments for a house will continue rising at the same pace as inflation and that liability will be with you as long as you own property. Your investments will continue growing and can be passed on to your heirs. Thanks, Ramin.

[@789jmw]

@@Pensioncraft Thanks for the quick reply, also love your videos, at work there are few of us who have quite large investments and your videos are among the most discussed points when we have our meetings.

[@hkaye1603]

What about putting a deposit down for a mortgage and then begin investing in a ISA on the side?

[@Pensioncraft]

Hi Harri you're right it's not such a simple either-or comparison as I've done here, but I wanted to simplify for the comparison. But, as you say, if you can afford it you can still invest if you have a mortgage, and this is what I did for many years. Maybe I'll be able to save money again in future if I get enough support on Patreon patreon.com/pensioncraft Thanks, Ramin.

[@hkaye1603]

PensionCraft And a brilliant comparison it is. I think I’ll do both if I can afford it, after I’ve saved for my deposit - Thanks.

[@Lucky13_537]

If you factor in TIME/EFFORT involved into the equation, there's only one winner: passively invested stocks.

[@emil2956]

Owning and maintaining a home is not passive investment like automated monthly savings into a total market index fund. Add into the calculations the value of human capital cost and estimated fees of repairs/renovations over the years. Not to mention the lack of diversification and risk that you take on just by owning a home.

[@robocop581]

You obviously do not own a house. The gains in my house far exceeds my stock portfolio because of leverage. Maintenance costs are minimal

[@emil2956]

@@robocop581 "The gains in my house exceeds my stock portfolio" is like saying the gains in my amazon stock over the last 10 years exceeds my index portfolio. You can also take leverage to your stock portfolio and increase returns even further. The average return of house vs rent + stocks even over long periods of time tends to tilt towards the renter. The data on this is pretty clear.

[@robocop581]

@@emil2956 You'll never know. I've done both, property is the quickest way to wealth. Again - Leverage.

[@robocop581]

@@emil2956 Hah Hah Hah. Stock Trading on 90% margin is the dumbest easiest way to lose all your money versus 10% downpayment and 90% mortgage.

[@emil2956]

@@robocop581 If you have followed the FIRE movement at all over the last decades, it's a pretty solid consensus that an ultra low-cost total market index tracking fund is the quickest way to achieve financial independence. You might find this article interesting: jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

[@scazz007]

Need to be earning around 54K per year to borrow 270K... Correct me If I’m wrong...

[@muffemod]

do it then

[@bartlomiejwrx4537]

Buying is always better. And you can alway sell propety and get money back, it will never happen with rent propety. Thank you

[@AbuSous2000PR]

5% rule... I agree

[@Pensioncraft]

Hi Abu al-Sous, Thanks for the comment. Ramin

[@TheUndulyNoted]

I'd rather just buy. What's money for if not safety and security. Renting means you're always in need of another paycheck. Once your mortgage is gone that becomes a lot less true

[@biffmister941]

Maybe I am missing something but at 13:50 should you not have the initial 35,000 investment in the bottom of the right hand column? This would leave you at 78,000 rental net gain. If this is true it would make a lot of your calculations after this also incorrect. It is easy to make a mistake crunching numbers like this, I could be wrong as well but the lost opportunity to invest and rent is a good point.

[@Pensioncraft]

Hi, Biff Mister, you're right and I've corrected the spreadsheet and put a note with the corrected breakeven in the description. Thanks, Ramin.

[@biffmister941]

@@Pensioncraft Thanks for the reply. Again maybe I am mistaken but your two columns seem to use different math, not apples to apples comparison. The left hand column should have 270,000 principle and 30,000 added to House price net gain. The total should be 408,000., for the same reason as your right hand column "That is money that's yours". If I am correct that you have made a math error I predict you will take this video down to redo it. My comments will then be lost forever. If so, I punish you by forcing you to watch one of my video's and make a comment on it. May I suggest this one- kzbin.info/www/bejne/pJvZd5enmtmbrMU

[@unselfme]

stamp duty would be much much higher

[@bogdann.2832]

Speaking like a true Econ, you assume 100% of renters will invest in the stock market; and not only that, they are sophisticated enough to achieve an optimal balance of risk/fees/returns - which you "modestly" value at returning 6% yearly. Absurd premise. Furthermore a flat 1% maintenance fee is unrealistically high. A boiler boiler will last 10-15 years, roof leaks??? How about people living in flats? And also you don't factor in a property which might have a spare bedroom, which can be rented out if necessary This video could confuses people more than actually help decide

[@HarukiYamamoto]

Bogdan Nacuta I think it confuses you because you did not understand what he actually said.

[@cnam1258]

The correct answer is simply to buy. No question about it.