Renting vs Buying a Home: The Lie You’ve Been Told

[@MargaretWest-m8u]

The challenge is that whether you rent or own, there are unavoidable costs associated with maintaining a permanent residence-property taxes, insurance, and utilities like electricity, gas, and water. In places like California, where I currently live, the high cost of living has pushed many people to opt for alternatives. It’s not uncommon to see individuals living in tents to avoid property-related expenses, and the number of people I encounter who reside in their cars is truly surprising. It’s a sign of how extreme the situation has become.

[@HotManP-l5g]

The market continues to escalate daily. Home prices are exorbitant, and mortgage rates have surged beyond 7%. I often debate whether it's smarter to park my cash in the stock market and wait for a potential housing crash or bite the bullet and purchase a home now.

[@Toni__Michelle]

I understand your concerns. I'm 50 and planning to retire early, and the uncertainty of the financial future, especially around housing and investments, is concerning. I’m also considering my first stock market investment, but the volatility this year has been intimidating.

[@FrankJaaay]

That's impressive! I'd be happy to share more details. I understand the hesitation, especially when it feels like many firms offer similar services. However, finding a trustworthy advisor has been key to my success.

[@Toni__Michelle]

Rebecca Lynne Buie has consistently been my top recommendation. She’s widely recognized for her expertise in financial markets and has a strong track record. I highly recommend her.

[@DanöVee]

Thank you for showing interest. I’m glad you found her contact information. I hope your conversation goes well, and that you're able to end 2023 on a strong financial footing. Best of luck!

[@eddiemalvin]

When you run the rent vs. buy numbers, make sure you take into account your entire lifetime. Don't stop at 5 or 10 years, include the numbers after the mortgage is paid off but the rent will still be due.

[@rdw1968]

Property taxes are still due as an owner along with maintenance and potentially needed upgrades.

[@slumy8195]

@@rdw1968 shh... they think a paid off mortgage will mean zero payments happily ever after!

[@db7084]

@@slumy8195 Where I live, rent is $2K a month minimum. That's $24K a year, minimum. I own my house. My taxes and maintenance are nowhere near that a year.

[@jmtake85]

​@@db7084only if u brought your house 30 year ago

[@jmtake85]

800k house tax is like 11k per year and 2k insurance and at least 6k per year in maintenance

[@PublicFreakout]

Two gripes: 1) 7% is not a normal interest rate, the overwhelming majority of homeowners have under a 4%, this is a blip in time where interest rates are extremely high. 2) rents are raised constantly, 30-year fixed mortgages are the same through the life of the loan. After 10 years, your rent on that 5400/month property may be upwards of 8k. Your mortgage will remain fixed. Additionally, at 10 years you've likely built an extremely significant amount of equity in the home from both principle payments and appreciation in the real estate market.

[@SK-el6lc]

This guy gets it

[@agent.4206]

Your first point doesn't apply to buying a home now. Sure, most have under 4 percent now, but where as a first-time home buyer, am I getting under 4 percent now? The under 4 percent was a blimp in time where interest was extremely low and everyone refinced. You're the first person I have seen, say, the reverse. Please provide evidence if your going to claim getting this intrest rate is still possible or is bound to happen again soon. Second point depends on how long u stay in the house which is the whole point at looking at the numbers in the first place.

[@SK-el6lc]

​@@agent.4206The 30-year fixed mortgage rate is currently just below 6.5%, and we're at the start of a rate-cutting cycle. The effective federal funds rate is expected to decrease by 2.5-3% over the next two years. With core PCE inflation nearing the 2% target and the first rate cut anticipated in September, it's far more likely that mortgage rates will drop to 4% in the coming years rather than rise back to 7%. That on its own should be enough evidence. And I'm not even factoring in the unsustainability of US debt at high rates and the reversion of elevated MBS spreads yet.

[@PublicFreakout]

@@agent.4206 rates were sub-5 from 2011-mid 2022, 11 years is hardly a “blip”. Additionally, No one who got in at 7% will be paying that for the life of the loan, they maybe have another 18 months before they can refi into the mid-5s.

[@agent.4206]

@@PublicFreakout okay fair, but you're still making a prediction by assuming this is the blip of 7 percent currently. Since 1990-2006 ranged from 6 to 8 percent. With 2008-2021 being the lowest it has ever been.

[@micheal_mills]

This happened with the 2004 housing boom - home prices were greatly inflated, meaning people couldn't sell later because they owed more on the house than they could sell for. I know quite a few people who bought then, thinking they were making a good investment to sell later, but it's taken until the COVID housing boom for the prices to come back to those original amounts.

[@donna_martins]

To balance out your real estate holdings, I suggest investing in equities. If you're cautious, even the worst recessions can present fantastic buying opportunities. Additionally, volatility can produce fantastic short-term purchase and sell opportunities. This is not financial advise, but you should buy immediately away because money isn't king right now!

[@Robert_Seaman]

You're right. I was able to diversify my 450K portfolio across markets with the aid of an investment coach, and I was able to use high dividend yield stocks, ETFs, and bonds to generate a little over $830K in net profit.

[@Trevor_Morrow_LTD]

Would you mind providing details on the advisor who helped you? saving for a pension through a corporate program since the age of 18. I hit greater tax along the road, so I increased my company pension with a SIPP (tax benefits). I'm now 50 and would love to expand my finances more aggressively; there are a few automobiles I still want to drive and a few mega-vacations that I still want to take.

[@Robert_Seaman]

'Vivian Jean Wilhelm a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.

[@Trevor_Morrow_LTD]

Thank you for this tip , I must say, Julie appears to be quite knowledgeable. After coming across her web page, I went through her resume and I must say, it was quite impressive. I reached out and scheduled a call

[@trevortracy5237]

I love this because it makes sense. I ran the numbers and was surprised that the house I want to buy is $15,000 cheaper to buy than to rent the equivalent. I messed with all the numbers and it still came out cheaper to buy. Thank you for this resource and explaining. It probably makes the most sense for people who don't have kids and like to live in town.

[@ramitsethi]

Outstanding work running the numbers. Which city, out of curiosity?

[@Rachmanfan4life]

Trust me, you ran the numbers wrong

[@lucaskumara8701]

@@Rachmanfan4life why would he trust some random person xd

[@VainerToast]

@@ramitsethi Out of curiosity do you own your own home or do you rent?

[@RolopIsHere]

Yes, I am paying $1 per month per square feet a month now that I own my home, and when I rented I was playing almost $2.6 per month. For me makes sense to buy if you get good interest rate and good downpayment.

[@DonaldMark-ne7se]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.

[@Anselfits]

Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!

[@Nicole_Andys]

That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!

[@Crystal__sage-b7k]

I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?

[@Nicole_Andys]

Carol Vivian Constable is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

[@Crystal__sage-b7k]

Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance

[@hypersynesthesia]

My mortgage is dramatically cheaper than any rental situation would be for me, and for the first time I have my own space - a whole flat & garden, not a room. Even once I add in my bills, it’s cheaper than renting was for me, and certainly cheaper than it would be now (London rent is scary). Once I could afford the deposit - which is obviously the biggest barrier for so many people, and that needs addressing - it was an absolute no brainer for me and I feel very fortunate.

[@SantoryuKauboi]

Less for me as well. Bought my house in Maryland 15 miles from work. Since the housing market did what I did, my house value went up by around 50%. Went from 300K to 430-450K. My mortgage is only $2100/mo. To rent a place my size it would be roughly $2800/mo.

[@wolfstadt_]

your monthly payments might be cheaper but you are paying a huge amount over the long term in interest unless you put a large down payment or bought it outright

[@hypersynesthesia]

@@wolfstadt_ I put down a 45% deposit when I bought it 7 years ago. My monthly payment is £518, I also make an additional monthly £100 payment just to gently chip away further at it, particularly as I know the interest rate will increase in a couple of years. Will increase that as my income grows. Rent for a similarly sized flat here would be circa £1400-£1600.

[@ripp704]

​yes putting 45% mixed with WHEN you got your house made all the difference. I don't think it would play out as well if that was done currently.

[@wolfstadt_]

@@hypersynesthesia Ahh ok yeah that 45% was good then. Congrats homie im glad its working out and you got something to call your own. Looking forward to grabbing my first property at the end of the year

[@timmorales4331]

Great advice and video. One thing you overlook, however, is that a person rents for his/her immediate needs and buys a house based on what he/she thinks will be the needs in 20 years. This leads to an even greater disparity between the cost of renting vs. buying.

[@xo7454]

I have owned a 4-plax to rent out, a condo, a luxury condo, and an acreage. I have also built a log house. Gave up homeownership and started renting in 2014. Less headaches! :) I am a physician and with the healthcare crisis across the country, I can move if I don't enjoy my work anymore or if I have a better offer somewhere. I am in the process of moving for 2x salary increase. Not planning to buy a house anytime soon, but I save and invest my money, so when the market crash, I can buy if I know where I want to be in old age.

[@rdw1968]

@@xo7454 nice!

[@michaeldwyer977]

@@xo7454 if you are a physician and have no worry about ever being financially pinched in retirement then go ahead and rent. For most people who don’t make 200-500k a year….for someone making 50k a year….buying yourself a nice 1 br 1 ba condo will pay dividends when you are 65.

[@martincagle9226]

Not all doctors are smart

[@rdw1968]

@@martincagle9226 this one is.

[@kkhath]

@@martincagle9226 did you not read the part where they save and invest their money? Why does it matter how they get their wealth either through RE or other Investment $1 dollar is $1 dollar.

[@justlouist2676]

In Canada what a lot of people don’t often factor in is yearly property taxes. So you have to think about that as well which could be anywhere from $3,000/$7500+ a yr depending on the size of your home and where you live.

[@Mijah-ff8ib]

Same here in the US.

[@rich7447]

The scariest thing in Canada is that you can only lock your loan rate in for 5 years.

[@rpstgag]

What's your plan for when you're old, disabled/unfit for the workforce, and on a fixed (usually relatively low) income? What if the landlord raises the rent? THIS is why it makes sense to buy - Not because housing is an investment, but because it's a basic physiological need, and you do not want to be at the whims of the market when you are vulnerable. As someone who cares for people in their sunset years, I have yet to meet a disabled 75-year-old renter who wasn't on the brink of being homeless.

[@ramitsethi]

Can you try to take an honest attempt at answering this yourself? Please keep in mind nobody's saying you should buy or rent forever. But if you choose to rent -- as I have, for now -- what might be the answer to your question about what to do in old age?

[@barbwall3678]

I’m in that situation now…60+, not working due to medical problems, no 401K or Roth. Moved to a bigger city 5 yrs ago when I was working. Debated the rent or buy dilemma, decided to play it safe & rent. Then a sports injury sidelined me. Can’t work. No insurance, no disability. Just a tad too many assets to qualify for state assistance, but too poor to afford private insurance. Landlord raises rent every year. Doesn’t tend to repairs. I can’t have a pet, garden, pool, clothesline, fire ring. He cut down the only 2 trees in the yard that shaded the south sun and brought the bird’s & squirrels. Laundry is in the basement & steps are difficult for me. I hate it here. Wish I’d bought in 2019, but who knew all the SHTF w the pandemic, riots, & real estate market?

[@trishhooley3206]

I am in my 70s and know some widows who rent and are happy. They sold houses and invested or have enough monthly income to support themselves. Seems you are talking about folks who didn't plan earlier in their lives.

[@Ekam-Sat]

Your clients... you are talking about baby boomers which rode the best economy in recorded history where everything kept going up. They got in the market for a bargain and simply lived in their properties and became millionaires because the wave carried them. That's not going to happen with the new generation. Regarding your final question. Buy something small and cheap as a back up. You don't need to live in it. You can rent it. But then at least you have something if things go sour. Plan-B kind of thing.

[@prorobo]

⁠@@trishhooley3206what a dumbass opinion. You can plan all you want, there’s this thing called variables that can sideline you at any moment. I’m sure I make more money than you have ever made, and yet I am not prepared for every single circumstance that could possibly happen to me in the future. Enjoy your twilight years, hun, you don’t have many left.

[@timothybeach6582]

1. Your example in this video seem restricted to going from renting a condo to perhaps buying condo. Many people in the middle of the country are trying to go from renting a house (a single family dwelling) to buying a house. As a house renter, I don't have to repair the house, but I do have to maintain a rather large yard. 2. Unless the landlord fully owns the rental property outright, he/she has all of the expenses that a home byer would face. So, going on your example of the landlord being limited to charging rent base on market rates, he/she could be in a situation where the rent doesn't meet all of his/her costs, but would offset them - which I hadn't thought about before. Anyway, you've convince me that continuing to rent is the best thing for us.. Thank you

[@YR2050]

yes, our rent is 3500 and mortage is close to 5k for the same unit. Rent definitely doesn't cover the mortgage.

[@kbenti]

Run the calculator to get the actual numbers. It is important to get the numbers right.

[@CDCentral]

12:42 what makes this so tricky is that it would appear that Renting is cheaper. But if you're living in a single family home where the owner has to pay all the fixes, they can just up the monthly payment when the current contract finishes.

[@HansKazan-r9y]

Nice video, thank you for that. Owning a house gives also peace in mind. When you are young maybe it's not that important but above 40 I like to have a big garden and fix the kitchen the way you would like it. Get solar panels, better insulation etc. You don't need to worry rent goes up, mortgage is stable and don't need to move again. In my country rents are below 4% for >10 years mortgage. Actually interest goes down the longer you pay back the mortgage.

[@funtechu]

For me personally, the main reason to buy vs. rent is control. I love being able to do what I want to my house when I want. Pets, solar panels, changing the landscaping - the door is open where in an apartment it is shut tight. The other major reason is moving. I hate moving, and when I rented, I typically had to move about every 3-4 years just to keep my rent competitive. That being said, when I bought my house it was also in a period where rent was much higher than the cost of the house, even when factoring in 3% for maintenance. My total fixed housing costs were about 18% of my take-home pay, and I had large reserves saved up as well. I've done an annual assessment every year since I stopped renting, and at least to date my cost to own has been a fair bit below the cost of renting over time.

[@Chriko_labs]

Yes! Run the numbers! For me it made more sense buying. Also, don't forget that property normally appreciates with inflation and the mortgage amount stays the same.

[@bisiriyutajudeen5728]

Inflation is a negative and not a positive. Your house “appreciating” just means your purchasing power is depreciating therefore everything else getting more expensive over time. Plus a place you live in will never be an asset but a liability.

[@jimbo4196]

​@@bisiriyutajudeen5728 What is this nonsense? "Inflation is negative and not a positive?" Inflation happens EVERY year. It's a totally normal thing. The benefit Curly is mentioning is that houses have historically OUTPACED inflation which literally increases the value of his asset. "A place you live in will never be an asset but a liability". That's an interesting comment. A house is literally an "asset".

[@bisiriyutajudeen5728]

@@jimbo4196 Perhaps you need to study the actual driver of inflation if you are struggling with the idea that inflation is a negative. If more units of money are printed and finds its way into the economy, it gives the illusion that "assets" are going up in value(positive) but in actuality, it is the purchasing power of money that is going down(negative) Paying property taxes, maintenance costs, insurance costs make your house a liability. It is funny we don't flinch when this applies to cars when you drive it off the lot. A house you live in is not an asset but a liability. A house which you rent out and receive cash flows from is an asset.

[@nunyabidify]

Rented most of my life pursuing education in different states. At most I paid about $1800/month for a townhouse in suburbs but far from renovated. I paid $1500/mo. for my first condo. Sold it 2 yrs later and made 80k profit. $2400/mo. for my first home; nearly 3500 sq ft, 4 yrs old -during Covid after looking at the comps. Signed PA before I toured it bc it made $ sense. Took a penalty free w/d from my 401k to cover closing costs. Used $ saved for closing in savings to do cosmetic work. Sold the home 2 years later and made a $200k profit. I rented 15 places before my 1st home purchase. I made $0.00 on those properties owned by someone else. Lack of Affordability and lifestyle are 2 reasons not to buy NOW. But, you cant leave your children a rented apartment; but you can leave them an asset: a home.

[@Ekam-Sat]

It's true that you shouldn't buy a home NOW at these prices. We've had good times and some great opportunities if you played it smart like you did. Right now it's HOLD. If you run the numbers it doesn't make sense right now. Especially in over inflated markets like California.

[@sheenaforde9464]

You are who I have been looking for when people try and talk me into buying a house!!!!! I knew the myths you stated and they are my reasons for not buying. Plus I'm not financially ready anyway. I don't mind renting forever. Thank you so much for this video that I just stumbled upon.

[@MP-th6ob]

Let’s check if Ramit is correct and do the calculations on the property he identified in the video. The property in question is 776 Bryant St, Palo Alto, CA 94301. You can easily look it up and see all relevant publicly available information on any real estate aggregator site. The previous owner purchased the property on 10/26/2005 for $1,060k and sold it on 6/6/2018 for $2,150k. The question that we are going to ask here is whether that individual would have been better off renting this same property between these two dates and investing whatever money he saved in the stock market. I am going to make a number of assumptions and use the tools that Ramit suggested as much as possible. First off, let’s assume that on 10/26/2005 the previous owner made a 20% down payment ( $212k) plus closing costs around $10k excluding prepaid property tax (I’ll add that separately) and took out a mortgage of $848k. This would have been a jumbo loan, for which the median 30y fixed interest rate was 5.87% on that date. The payment for such a loan is $5,013.53 per month with the remaining balance at the time of sale of $623,314.31. Keep in mind that there was nearly a decade of time with countless opportunities to refinance this loan at 3.2%-3.5%, which would have drastically lowered the payment amount and the amount of interest paid. But, we are going to ignore that. The property tax is available from the public records. The annual amounts start at $13,227 in 2005 and go up to $15,886 in 2018. For simplicity sake, I will use an average of these numbers and divide by 12 to get a monthly amount of $1,213/month. The condo currently has HOA fees of $550/mo. The HOA takes care of all exterior maintenance/repairs including the roof and also provides homeowner’s insurance. I am going to assume that no supplemental insurance is required as is typically the case in that area. We have to adjust these fees for inflation to project what they were in 2005 and 2018. Using an inflation calculator, this amount is equivalent to $342.58 in 2005 going to $440.47 by 2018. Again, for simplicity, I’ll use an average of these numbers, which is $391.55/month. As far as maintenance expenses, since the HOA takes care of all of the exterior, we are going to allocate $50/month to a home warranty contract with $75 deductible and we will take a fairly reasonable $100/month to cover deductibles and any other maintenance issues. To keep things equivalent to a rental, I will assume no upgrade and remodeling expenses (you would not get that while renting). Here are the monthly expenses: Mortgage: $5,013.53, Prop Tax: $1,213, HOA fee: $391.55, maintenance: $150. Grand Total: $6768.08/month. Let’s now look at what it would cost to rent the place from 2005 to 2018. In 2018, the place was actually rented out at $5300/mo per MLS by the new owner. Since it was not a rental before that, I used US Census data for CA to project what the rent could’ve been in 2005. Their data shows a 56% increase between 10/2005 and 6/2018. Therefore, the rental price would have been $3,400/month in 2005 going up (assume linearly) to 5,300/month. Let’s assume a deposit of $10k for convenience (to cancel buying closing costs in the later calculation) Now, let’s assume that our owner decided to rent instead and put all the extra cash into S&P500 index fund. We are looking at the invested down payment of $212k plus monthly additions starting at $3,368.08/month linearly decreasing to $1,468.08/month over the course of 152 months. This requires some historical pricing data of S&P 500 and Excel. I can provide a link to google sheets if anyone is interested, but, at the time of sale (or move-out in this case) he would’ve had approximately 430 shares of S&P 500 worth $1.169M. That is certainly a large number, but the owner still ended up with a better deal: he pocketed $2.15 Mil - 7% commissions/closing costs - 623k mortgage balance = $1.376M. Keep in mind that I ignored many other factors favoring the owner, such as tax deductibility of mortgage interest and property taxes for the entire time of ownership, which would have been a huge benefit for the owner since it clearly exceeded the standard deduction. I also ignored the fact that the property could have been bought with no down payment or only 3% down, which would still let the owner get all of the appreciation with minimal opportunity cost. And, I deliberately excluded the fact that if the property was refinanced 3 years after the purchase at 3.5% per historical data, the total payment would have matched the rent at that time. Lastly, unlike gains from stocks, up to $500k in profits from the property is tax-free if used as primary residence. Buying was a clear win here. I am sure Ramit is a well-meaning guy and this post is not designed or intended to disparage him. But, if you take a certain position, do what you preach… run the numbers. Doing it on the past data to validate your premises on the example you chose is the least you can do.

[@ramitsethi]

This is an awesome analysis. THANK YOU! Even if you disagree with my analysis, I appreciate you running your analysis and sharing your assumptions here. Without replicating your analysis (but stipulating your math is likely correct), I would differ on your assumptions about maintenance and renovations. I also acknowledge that you didn't count tax benefits in your analysis. When those assumptions change, buying is not "a clear win" -- but what I most want is for people to run a detailed analysis before the biggest purchase of their lives.

[@tomaszp2027]

good work, but like many people in the comment section you work in the past and the question is 'is it better to buy or rent _now_". we don't have a time machine.

[@paveltantsiura]

Great math, and don't forget that in your calculations the assumption is that the person renting has to be super disciplined to invest for 30 years which is not usually the case.

[@Rachmanfan4life]

Completely incorrect…

[@sojourneroftheland]

Wow, hats off for taking the time to do all that...personally if my only options were renting or a house that costs that much I would move states 100% Decent break down

[@LeNguyen-im8dm]

People think I am poor because I am living in an apartment. I don't care what other people think about me. I save so much money because I am renting an apartment. I am responsible for my life, so I don't listen to those who are trying to persuade me to buy a house.

[@davidbrooks8809]

Renting is Great for me... I'm glad people think I'm poor ..l don't have to loan money to them😂

[@romeoandjuliet6522]

In modern world we living nobody care if we are rich or poor even your neighbors don't know you but you are right that's how ppl think renting is poor

[@MoDavI-sl7iy]

​@davidbrooks8809 Lol

[@twocds4751]

But you do care what they think because you are bringing it up.

[@stevenweiss2148]

Dont listen to these people. You ain't Warren Buffet

[@happy1wandering]

Thank you for saving me from doing the would have been the worst financial decisions of my life, buying a house & financing a car. I owe you my life man!!

[@forthehomies7043]

Make sure you run the numbers for the particular house(s) you are interested in, the example he gave heavily favors renting because the rent price is extremely low for a 1.9m house. Still an incredibly educational video, I learned a lot too.

[@kbenti]

Always run the numbers. You'd be surprised how much certain factors can change your situation.

[@Jgrayfilms]

Something not taken into consideration is that rental prices generally increase year on year when mortgage is likely to decrease overtime.

[@maksymiliianlukasevych8442]

First, it's not always true. Secondly, overall the cost of living grows, which includes the cost of maintaining the rental place. So, if you own the place, you will spend more year over year for maintenance.

[@alexmena99]

Owning a home could also be a big tax benefit if you have it under a LLC which is an advantage to owning. You can write off most of those maintenance expenses

[@sg9414]

He notes that insurance & taxes have risen in Florida - look at rental price increases! It makes sense to buy if you want to ENSURE you have a fixed payment that you can reasonably count on.

[@maxk3102]

​@sg9414 insurance rises for mortgage too

[@sarsgarrs]

I agree he should consider that too since it's true most of the time but there are a fair amount of people that never raise the rent too. Mostly small time landlords

[@cyndymm1694]

Hello Remit. Thank you for all you do. My husband and I found you by watching your Netflix show. I was hooked, discovered your podcast, and rushed to buy your book. I purchased 2 copies. My husband and I had regrets about not purchasing a house. Everyone around us was buying and making us feel like we made a mistake. The numbers needed to make sense when we were looking for a house. You explained how you are not against home ownership. You are saying run the numbers! I'm happy and grateful that we found you because we invested the money we would put down on the house; we are pleased to say we are worth almost a million just by investing and keeping our bills low. We both are in the service industry and live our rich lives by renting a beautiful apartment. There is no way if we were to buy that house, it would be worth a million.

[@gypsyrollin6835]

Approved by the obama’s too!

[@Abhi.b.khanna]

All I know is that my sister rented, while I bought the house. Six years down the line, she recieved an eviction notice, and cannot afford the rent or mortgage of the house she lives in (because the prices have doubled in the last six years, and her rent was considerably lower than the average in the area). Now, she regrets renting more than ever. I'm not saying you shouldn't rent, I rent my office. But with a house, 8 times out of 10, straightout buying is the way better option. Never have to worry about eviction notices or the rent going up, or running into a douche landlord, who will not maintain the property, or prohibit you from making tiny modifications to your home, which you conveniently skipped over.

[@downwind_david]

Completely agree, moved three times in 5 years whilst renting and it was never my choice - landlords selling up and buyers were moving in rather than continuing to rent out. Whilst he talks about phantom costs, what about the phantom benefits of peace of mind, how much is that worth?

[@lowlowseesee]

yeah i can definitely see how this could scare folks. i have the rare experience of having friends of different race, income and job. so i have friends who own homes and friends who rent. truth be told neither party has any money. the people with the houses did not consider their phantom costs and have not a shred of investments. and the renters are in the same boat but dont have the house pinning them down lol.

[@saramalik274]

That is why I bought a home.

[@lons5472]

Same here i was renting before i bought my house back on 2018, i was considering on selling it now and go back to renting but then i read some reviews on some apartments and i see a consistent problems like neighbor smokes (even though its not allowed, i smell weed and we have bed bugs). I think now i reconsidered and will be staying instead. And just wanna say its different strokes for different folks, so not one size fits all in buying vs renting, and who say's you cannot own a home and still have investments like i do plus cash savings. I'm gonna hold on till i'm ready to retire in Thailand and then sell and make a killing in my area, i have a 5k sq ft home its just lonely cos i got divorced and all my adult children are out of the nest now. I used a VA loan so Zero down @ 4.70% and no property taxes for me lol.

[@rasta77-x7o]

Yeah don't worry about rent going up, just those rates, insurance and interest rates. Then when you want to do any modifications the fees and fact that you realise you do not own your home is the funny part!

[@cccpredarmy]

Not in USA but I know a guy who works his middle-class job. He saw a house for sale in the neighborhood and knowing that there is a good market for renting he took his shot. Went to the bank, explained the "business plan", bank was convinced, gave him a credit, he bought the house and after 1-2 months of renouvation and repairs it found its first customer. So my friend continues living his life like he did. Literally nothing changed. His new project completely pays of for itself. The bank makes profit and After 6-8 years the house will be in his ownership. My point is buying a house as an investment could work for you long term if the place is right and you reacted to the right circumstances in time.

[@dabdias]

I’m a PhD economist that works on the decision between buying and owning, and while many of the points made are correct, many other are biased at best. Principal (not principle) is not a cost; interest for many people can be deducted; the market for rental and ownership is not the same and is not always possible to find a rental that provides the same service as an owner-occupied; renting puts people at the landlords decision on rent and moving costs are high; owning vs renting needs to be balanced, it can’t always be better to rent or be better to own, at current mortgage rates, either house prices decline or rents need to continue to increase to rebalance the market. No doubt that owning is not always better, but an unbiased analysis would have been welcome, I know you can do it.

[@rebeltheharem7028]

Well, all of the things you listed are also biased based on the individual on the area in the cost analysis and won't apply to many people. In the end, the only objective analysis is the NY Times rent vs own calculator, and even then, all the values are biased based on the person inputting the numbers. You can't really have a completely unbiased analysis of rent vs own, as any figures used are also based on many assumptions as well, as is all economic data, and can be predictable on a long term scale or as a whole, but not on an individual basis. This analysis is by definition, personal, and therefore always biased.

[@dabdias]

@@rebeltheharem7028ok, if you say so… Note that bias and uncertainty are different things. You seem to be mixing the two concepts, but I could be mistaken…

[@Giasemi55]

Everything you are saying he already stated in the video. He made it clear that people should do a detailed analysis to make the decision. Of course he is including his opinion this is a persuasive piece. Who comes to YT for unbiased videos?

[@dabdias]

@@Giasemi55 not true, but that’s fine! About 66% of US households own and 34% rent (there are other small categories but those are irrelevant and I just omitted them), of this allocation, how much do you think is misallocation (i.e., people who should rent but own and people who rent but should own)? I can tell you it must be minimal because it has been like this for several decades! Given the housing market structure, very few people/households are doing the “wrong thing”. After watching this video, you would think it’s the other way around. I don’t expect unbiased commentary on YT and I see that all the time, and that’s why I comment when I think a comment is due.

[@timmcmanis5710]

Please show me where he said renting is always better lol. Also, give me a break with the whole “interest can be deducted” bs. Interest can SOMETIMES be deducted, if you itemize, up to a CERTAIN AMOUNT, and will ALWAYS cost more than if you hadn’t paid any interest at all.

[@ween4314]

I have to disagree. I paid my house off in two years lived super poor and put every penny into paying off. I'd rather pay taxes once a year than rent for life.

[@mist2469]

Which state? I'm from NY, and it's crazy in the urban area to buy.

[@Rogue_Money]

Aren’t taxes for life as well? Just like rent. 😂

[@ameliacrasman9955]

​@Rogue_Money yup but significantly cheaper than rent and not to mention housing going up too so you can sell your house for more

[@ween4314]

@@Rogue_Money not if you had huge steel balls and went to war and government says you ain't gotta pay them ever again. Tax free everything for me. I'm welcome, thanks to war.

[@ween4314]

@@mist2469 Florida my man. 360k new build 2086 sqf put everything in it, I don't pay taxes thanks to me going to war so benefits of the military.

[@StockySnail]

Similar here in the Portland Oregon area. I could rent my house for 2k/mo and if I bought my house today at $440k at 7%, a mortgage would be 3k/mo on a 30yr ($497k paid in interest over the 30yrs) so total cost of $937k to buy my house. On a 15yr mortgage $4k/mo ($220k of interest paid over 15yrs) would cost $660k to buy my house. Renting for 30yrs with 1% rent increase per year would be just over $700k over that 30yr period. If you never sold your house within the 30yr period and never needed to fix anything (good luck with that) and did a 15yr mortgage or less instead of a 30yr, then it would make sense to buy in my area, plus use that extra 1k or 2k per month to invest then renting makes a lot more sense if you choose decent investments that hit the market average and not lose money.

[@kbenti]

Yeah, exactly, but the calculator is even more detailed and comprehensive. Giving you a better sense of what the total benefit will be.

[@ryanmahoney9833]

I appreciate your step-by-step analysis. Some locations have cheaper housing and very limited rental options. By following the process you showed, each houshold should be able to figure out what is best for their situation.

[@TheCloveart]

Closing costs, maintenance, transaction costs, and renovations are not monthly costs. These usually happen once or every so often. It depends on the house. The rest are usually included within your mortage.

[@alecpaulson1246]

But taken as a while they can be averaged to a monthly % making it easier to plan for because most income is monthly or biweekly

[@TheCloveart]

@@alecpaulson1246 That is where an emergency fund is necessary. That is how you plan for unforeseen costs like those. Grouping them in as monthly costs is a bit misleading. For example, closing costs, are definitely paid once, unless you take it out as debt, which I think Ramit wouldn’t suggest.

[@chriszavos]

I used to rent all my life, until my previous landlady kicked me out of the house after 10 years because her daughter wanted to move in. I had to find a new place in a very short time, and there were not any houses available to rent in good condition and at a reasonable price. I decided to buy my own house and I have not regretted it not even a tiny bit.

[@AveryMtlCa]

It all depends on the person's personality. If they can't save regularly and are always tempted to use up their savings, they should absolutely buy a house within their means. It's the only way to force yourself to build up some capital.

[@varunchhabra497]

All this is applicable to people who can afford to rent a 2 bedroom apartment but then go on to buy a 6 bedroom house. My rent was $1200. I bought a condo where I pay $1500 per month including property taxes and insurance. And the thing has appreciated by at least 20% in last 2-2.5 years. So, you can buy a house/condo if you don’t buy a $500k house when you could afford a rent of just $1000 per month.

[@yomeroyomismo8681]

Also, if you bought an old house in bad mechanical shape, if the city inspector finds Violations to city code, he will give you a date to fix it, and fine you. The city can take you to court too if you show non-compliant after the deadline.

[@lizcademy4809]

I went a slightly different route. After my killer divorce wiped me out, and I got a good job, I began saving to buy property. [I was in my 50s, minimal investment, less savings.] I wanted to stay in the Boston area, but knew it was far too expensive. I ended up buying a historic duplex in a good neighborhood in an Upper Midwest city. Excellent location, nice interiors (which I could fix up), and I could afford to carry the rental if necessary. I like fixing old houses, so I fixed up the rental and keep doing so. [Added air conditioning to both units last spring.] Right now, the rental covers about half my mortgage payment. If the local economy goes up, due to location, I can probably cover my entire mortgage. And if not, it's no big hassle for me to cover it all. And yes, I ran the numbers every which way possible. In a previous career, I was an MBA level Financial Analyst - I run numbers for everything.

[@Ekam-Sat]

Congratulations man. Not easy to come back after a divorce. Happy for you. Blessings. Which town may I ask?

[@alphaomega1351]

The problem is in the confusion with the term "buy." You don't "own" a home if you have a mortgage, people. The bank 🏦 does. 😳

[@robocop581]

Since you say I don't own my rental property because it has a mortgage, the rental income should go to the bank then. But why is it I get to keep my rental income. I'm confused

[@natashawilliams1694]

I guess their point is if you can’t find a tenant to pay the rent and you also can’t make the payments on the rental the bank can take it ?

[@javier123454321]

No, the bank owns the debt and the house is the collateral. It's a very important difference.

[@robocop581]

@@natashawilliams1694 You're assuming a landlord can't afford a mortgage without a tenant which is silly

[@pauljansen6650]

​@javier123454321 this exactly! This guy doesn't know

[@tylersanders2388]

This is a short sighted argument. Owning a home manages the human factors. You aren’t at the mercy of market increases for rent. If you can afford the home, you can also pay it off and then cut your housing fee to maintenance and taxes. You pay a little more to remove a lot of the unpredictable parts of life

[@guillaumedion6033]

You are also st the mercy of interest rates...

[@jaredrosenberg4965]

@@guillaumedion6033 until its paid off. when i retire my housing will be free and your 3k per month rent will be 10k

[@guillaumedion6033]

@@jaredrosenberg4965 the house isnt free, you have to spend a lot of money with maintenance and taxes, and you will have paid 5x the property value... you can get good and bad deals on both sides, good luck!

[@cashman1228]

As a single guy, happily renting an 850 square foot apartment within walking distance to work, the cheapest condo a bit further away would be almost $1000 a month more expensive right off the bat with a 20% down-payment. Depending on which rent vs buy calculator I use, I'd have to stay 25 years to never breaking even if I bought.

[@kiethd83]

Be careful with this thinking. Like most things, it depends. I have a 15 year loan right now and still would have to pay about 12-15% higher in Rental prices than my mortgage, so maybe cal it even with “Phantom Expenses” but every month I have over 70% going into equity, so that really should be ducted from my monthly mortgage as I’m effectively paying myself. Also, long term interest rates super complicate this decision. When you purchase a house you freeze the purchase price in time and inflation technically makes your house cost you less through time that at first you assume. Rent is always in March with current market conditions, but your home purchased 7 years ago is not.

[@alexdevcamp]

Even if renting costs less than mortgage, don't you need to factor in the actual value of the house in the future? You can sell your house because you own it. Wouldnt it be (rent*months) va (mortgage*months + repairs - price of home in 30 years)? And if you plan to live in the home after the mortage is paid off, youd save money there too

[@kbenti]

The calculator gives you a way to factor in house appreciation. Look at it. For some situations it will clearly state that buying is better. You can even see how long you have to live in a house to break even, if it breaks even. You see, if your investments catch up to the homes value, then those investments will run away in total value.

[@BoriPR82]

My reason for buying my house.... passing it down to my children and teaching them to pass it down to theirs.

[@joaocardoso9031]

Most people will need an house before their parents don't need it anymore... by the time you pass away, they will already have an house, bought or rented

[@BoriPR82]

@@joaocardoso9031 tomorrow isnt promised to anyone and i wont take the chance in that they will buy one in the future, especially with the prices of this housing market. I believe the days are coming wbere home and land ownership will be rare and a luxury for those who can afford to buy. Id rather buy property now. My grandparents had a home in puerto rico, the home i lived in during my youth, and they sold it. I wish they would have left it to us. They sold it in the 90's for cheap, now its worth about 300k in puerto rico which is alot. I would have kept it and pass it on to my kids.

[@biglulm6]

Children don't care about the house ,they will sell it buy a boat cars and travel 😂

[@BoriPR82]

@@biglulm6 thats subjective, as a kid i wanted the house i grew up in in Puerto Rico. My grandparents sold it but i would have never sold it if they would have left it to me. The way im raising my children is to always leave an inheritence and make sure that you leave enough for your childrens children. By the time they get older the housing market will be untouchable, something only the elites will be able to afford.

[@CristanMeijer]

If it's cheaper to rent, you could also rent and invest the difference. It could yield you a good amount of more money for your kids. It also could not. That's why running the numbers is a good idea.

[@JC-id7dj]

I am a widow of 6 years and I’m 60 years old. I have a 6 bedroom house that was built in 2005 and I have 11 years left to pay it off. I am an empty nester. My two adult kids live in CA. I have a pension, and I work full time. I am overwhelmed with maintenance and upkeep and also $60,000 in debt. I miss my family and I want to sell my house, become debt free and move closer to my kids but in another state other than CA. I’m considering renting from that point on. Is this wise?

[@mindfullymellow2323]

Similar situation here. Decided to sell and take the cash to pay off debt and invest the rest. Rent hacking with one of my adult kids for a year or two, then possibly buy again in a multigenerational arrangement.

[@kbenti]

Use that Buy vs Rent Calculator he mentioned, or one of the other ones online. It really is important to see what is the best move. Even if you just want to see how much your rent will matter as an investment cost. I would also recommend a "how much you can afford" calculator. It will tell you what you're realistic bidget should be for a place to rent.

[@Anakin81]

I thought the same as renting was throwing money in the trash and I bought, I put 70k in an apartment, now my mortgage is double what I started paying, the total monthly cost is double what I started paying and the price is not far from what I paid for the property. These videos are life-saving for those who have not yet made decisions

[@shepard1711]

When I've talked to friends who've bought their homes about if I want to try to buy my house vs continue renting, these myths are the exact myths they always tell me - which I don't understand because I'm paying about half what I'd be paying on a mortgage (and fixing my 70 year old house) and I'm investing the difference... so... yeah. Thank you for helping me not feel crazy when my parents and friends try to convince me to buy a house and I say "No thanks."

[@mars2165]

Depends on what you’re looking for. Okay so let’s say you decide to continue to rent (with an increase in cost every year) and invest the rest of that money - eventually you will want a buy a house? Or do you just want to rent forever until you retire and even after that? Because even if you pull your investments the housing costs will be way higher than it is today and you’ll be stuck with the same issue but later in life. I’d rather buy and spend a little more and have a house that my family can live in and eventually pass down to. Not rent forever.

[@drd4059]

My landlord is providing a service. I am in a small town and pay less the $1K per month in rent. I put my money into R&D instead. While renting I accumulated 40 US patents. Each patent is approximately the value of a house locally. If I put my money into real estate, I would own one house instead. The main downside of renting is social perception: that is women like home owners more. The cost of ownership includes the cost of income taxes having a tie to the local community. In Canada the cost of ownership includes income taxes at 54%. By renting, I can sever the residency tie easily and move to a lower tax jurisdiction. I can save enough in income tax to buy a 8000 sq ft chalet in the Swiss alps free and clear in 4 years by moving to Switzerland. Not coincidentally, Switzerland has 16X more patents per capita than Canada because it is a better place for innovation.

[@GuyGraves-e5b]

Buying a house is a major generator of wealth in this country, because for a large segment of the population, it is the only generator of wealth. If someone were to make a single $20,000 purchase of a diversified mutual fund and let it sit for 30 years , they would end up with 240,000 based on the average 10% return. I had a paid off house that I sold to move and take care of an ailing parent. I am now renting and have no intention of buying again. I invested the proceeds from my home to build up my retirement account. Buying vs renting is a personal decision and there is no right or wrong answer, but building wealth should not be the primary reason.

[@kbenti]

Well, that's why he says to use a calculator. Assuming one is better than the other is how people lose money. What you did just shows that there is more than one way to plan for the future, but the calculator just helps you to make the best decision with the current situation.

[@lukeferrara3110]

Thank you for sharing your knowledge and experience Ramit! My wife and I almost bought a house because we keep having friends & coworkers around us buying and it honestly gets to our head sometimes. After running the numbers we decided to stay renting. After seeing your Netflix series it made me feel better about our decision. We’ve been able to save/invest 3000 a month for the last couple years. Our savings and retirement is bigger than it’s ever been and it’s kind of addictive to watch it grow. It motivates me to work harder to be able to invest more! Thank you for all you do!

[@db7084]

Glad your savings and investments are doing well. Because you will need it to pay rent for a couple of decades after you retire. Keep your fingers crossed there isn't a crash or bad recession.

[@bettysmith4527]

More of house buying is a lifestyle choice honestly, and a financial one to some extent as you have to be able to afford it. I chose to buy a house because I owned a condo prior and could not stand listening to other people's racket constantly, there was never peace, and I owned an end unit!! Rental SFH are hard to come by around here and the cost of them would be about 1000 more a month then I pay in mortgage, taxes and insurance!! Makes more sense for some people to own vs rent. It isn't a black and white scenario! Also as the other poster above wrote, when you retire you will have to pay an ABSURD amount of rent each month, where those of use who have paid off homes or who have sold them and bought a smaller place with cash will only need to worry about taxes and insurance which will only equate to maybe 1000 a month by then if not less. Rents will be probably 3K and up by the time we retire, probably even more!

[@krischen8099]

I have tried to input everything for calculation, outcome shows, that own the house is much better way. Unless you buy the house with 100% cash, in that way you compare between cash investment vs increasing house - phantom cost.

[@lisastackpole5137]

I am so glad to have found you on KZbin and look forward to learning more about investing. I owned a home for 20 years in North Atlanta and sold it at the top of the market 3 years ago. All my life, the American Dream was to pay cash for my house. When I paid cash for my little house by the water in Florida, my dream became a nightmare. Here in Florida, one bad storm can wipe out my home and therefor my life savings....And don't look to the criminal insurance companies to insure you or honor their policies. I am excited to sell my home before the next hurricane season, invest my cash, and become a happy and stress free RENTER!!!!

[@RebelloMusicUK]

My only criticism is that you’re numbers assume rent will not increase

[@prem007rocks]

you hit the bullseye there. everyone assume that interest will remain high and Rent will never rise.

[@jlykes]

I believe the NYT rent vs. buy calculator actually includes an assumption around rent price increase. By default, I believe it's set to be at the same 3% as the house price appreciation assumption

[@deepalakshmi5890]

Also moving costs every two years or so if tenancy ends

[@wPleasur3]

Property taxes increase along with repair and maintenance costs. Regardless of renting or buying, costs will rise.

[@Ekam-Sat]

I did the calculation with 3% yearly increases and renting still came out cheaper. Comparison: Renting vs. Buying Total Cost of Buying (over 30 years): $5,139,798.80 (net of property appreciation) Total Cost of Renting (over 30 years): $2,616,607

[@gwenaran]

Hands down the best rent vs own video I've seen, was great

[@Cinemachoicefilms]

Saved me watching this video. Thanks from Brooklyn NY

[@lucybruce-agbeko6349]

I agree with you podcast. I have been renting for 37years,and have raised 4kids successfully. I recently thought about buying my house but have decided to carry on renting. Thanks for the podcast 😀

[@rslager4]

For us it made sense to buy a condo, which we paid off years ago. Much cheaper than the maintenance fee and taxes come out to at least half of what it might cost to rent the an apartment of the same size. Condominiums can be a great option. Thanks for all you do Remit!

[@hpd_hero]

I never made sense of mortgages because of the very example he showed here. I bought my house fully in cash (yes I was 32 and all my friends had houses for years before me), but I rented and made wise investment choices up to then, and now I own my house outright. It might have been more sensible for me to rent to free up capital, but I have to say it was the best feeling in the world to finally own my own house ftet working hard for it for years. I think there is a norm in the US that if you dont have a fat mortgage and a house you cant afford by the age of 21 you’re a loser, and this is killing a lot of financial dreams for young and uneducated people. I would rank in order: 1. Buy with cash if you can 2. Rent and invest 3. Get a mortgage

[@noorulameen804]

There's one big drawback with rental, the owner may not want to renew a your lease when it expires . And you'll be left looking for another unit.. A feeling of uncertainty and insecurity will constantly bother you.

[@just_joshy]

Thing is a lot of these comments are saying they won’t have to work after they pay off the home. Property Taxes are gonna be the number one factor on if that’s true. Some people may have to pay 300-1000 or more a month in property taxes. Which for majority of people will require a job to pay for. And in 20-30 years it could be and most likely will be significantly higher.

[@jimbo4196]

Most people that own a home and plan to retire are saving for retirement. That means having money in a retirement account so you don't have to work. Also, even if property taxes and insurance are a combined $15K annually, you still have social security. At least for now anyway. Owning a home outright when you decide to retire provides you several options. You can potentially downsize into another home and pocket the leftover cash. You can move to another area where the cost of living is less and pay cash for another home. You could do both (downsize and move to lower cost of living area).

[@just_joshy]

@@jimbo4196 most people suck at money. Most people won’t account for the rising market cost of owning a home no matter where you’re at. Most people will go bankrupt after something goes wrong with their home. A small segment may be successful. But MOST will not.

[@brandotex]

Completely dependent on where you live, property taxes and insurance. Dont buy a house in CA, unless you make $500k a year

[@alecpaulson1246]

Great job summarizing his overarching premise. Numbers are going to be different everywhere.

[@nutrl]

But he did the same thing with his housing example, imo he didn't give a fair assessment he brought forth more cons or potential cons than pros ​@alecpaulson1246

[@GrissyQofA]

Only about 4 % of Americans out of a population of 335 million make over $400,000 a year! I don’t know why the hec people live in California if they’re not in that 4% when there are so many other places to live that are inexpensive and they can invest instead.

[@lastmanlost]

Renting shorter time frame is almost always better than buying but buying is almost always better long term. Example park area San Mateo family sold for $300.000, rent at that time for a 1 bedroom apt was $500 on the low end, 25 years later rent is $3000 a month, property taxes on paid off house are $3000 a year, house worth $3,000,000 plus.

[@KellyKels23]

My mortgage is really low compared to rentals, and it's gone up since i bought it in 2020, from $804 to $986. I've had to pay $5k for plumbing, $300 when the AC went out, my HVAC needs $1k worth of work, my roof needs replacing, which insurance won't pay for and i need to get the massive oak trees trimmed, at the least, to reduce the pummeling of my roof. It's a lot to own a house, and I do miss renting because I'm so sick of maintenance. I'm currently renting it, but once my tenants move out, I think I'm going to sell it. I am currently staying with my mom, whose home is paid off, while I figure out where I want to move. Everything is so expensive, though, sometimes I feel like just staying indefinitely with my mom and paying for us to take trips and help her with anything she needs. It's been fun so far, and she's happy not to be here alone, especially at night. But we'll see. Everyone just needs to do what's going to work best for them.

[@BaileyJames-zv2ddd]

Without a doubt, this year will be worse than the last. I lost a lot of money last year as a result of bad investment choices that I would not have made if I hadn't been so worried about my portfolio. I kept investing, but I couldn't determine whether to start paying for a house. In the end, I sold my positions, and the house needed more work than I had planned. I'm not sure how long I can keep going like this

[@LouisMorganxb3]

We've all made mistakes at some point. You should consider financial planning

[@BaileyJames-zv2ddd]

Do you mind sharing your financial planner ?

[@droopypie]

@@agentjacob4099 SCAM

[@bereketubekbay582]

Who is making money today?

[@lowlowseesee]

@@bereketubekbay582 everyone lol

[@boondoggle4820]

I bought because 1) I got tired of living in someone else’s home and 2) I was tired of sharing walls with people and wanted more space. Luckily, I live in an area where I don’t believe there’s a huge difference between the cost to rent and the cost to buy. I was definitely saving more money renting (although I have a lot more space now and I’m not sure what the difference is per square foot), but I’m ultimately glad that I made that decision for the two reasons that I listed.

[@cap4life1]

For many, the emotional burden of renting (increasing rental costs, mean landlords, chance of having to move with short notice) seem to be worth the opportunity cost of not having money to invest. In the short term, for people who are in financially insecure circumstances, buying is the silver bullet to reducing the uncertainty around renting. But you’re only trading one insecurity for another and will more likely end up in debt or house poor considering the mortgage costs + property taxes + maintenance costs. If you really want to buy, buy a condo or buy something way under your means. For people who aren’t making millions (so for most ppl) this is the best option to ensure psychological safety and financial gain.

[@tristanfall2682]

Good analysis. By buying instead of renting, you will eventually own your house and stop paying, particularly if the price is correct. Personnaly, I'm 53 and finished paying my mortgage. Ok, it's only a tiny house but now I'm about to work halftime too.

[@proweyz]

Yeap definitely agree that investment are not for everyone. Need to study and research alot. With no proper due diligence, it's better to do a rental where you are not tied up. And Invest your excess money in something that you have crystal clear understanding of

[@onlinepera8632]

I have rented large houses for years and sublease a portion of it to my LLC; I use two rooms for my business and have the landlord install a separate meter for water and electricity. I am able to deduct my expenses from my taxes. My business pays for me to live there through my withdrawals and also pays for its own expenses. My LLC also carries the renter's insurance with an umbrella policy. I also rent houses overseas and use the same strategy. The houses I rent are now my assets because they make me money and cover the expenses. I sold both my houses 20 years ago after realizing the cost of owning was very high in Hawaii, about 60% higher than renting, and property tax is constantly increasing.

[@scottnie0988]

That is really interesting and smart! I live on Maui and price are insane for both. But still cheaper to rent with current interests rates. Where do you live now?

[@lons5472]

Can an IC also sublease and use an LLC?.

[@ελευθερία-ε2ο]

I don't think you understand that you will be at the mercy of landlords and rent increases. Have you seen the payoff of equity? I bought for 315k, with 3.5% down. and it's now 850k. Not even the stock market would have turned 15k into half a million in 5 years.

[@rasta77-x7o]

Did you sell it for $850K? If not, you haven't made a cent.

[@KA_edu]

Elon has billions in stocks but according to your logice he hasn’t made a cent if he hasn’t sold any

[@joelwong3144]

Will you now sell your house and buy another one for 315k?

[@ελευθερία-ε2ο]

@neth77 smart investors don't sell their real estate right away. It's part of a diversified portfolio to accumulate wealth.

[@ελευθερία-ε2ο]

@joelwong3144 no, why would I sell if I'm getting positive cash flow from renting it. I bought several homes this way and now rent them. Part of my diversified portfolio. I can now retire before I have gray hair 😉

[@Youmaycallmesammy]

My 91 year old grandma wants to go rent an apartment. She can't keep up with the house and do the stairs. Renting with home care is cheaper than assisted living. Its opened my eyes to that as an option later in life, too.

[@thebeigesheep6132]

She could sell the home and pull out the equity and buy a 1 bedroom condo.

[@BlackGirlGreenThumb]

Assisted living is ridiculously expensive!

[@EMan-cu5zo]

That’s a different situation than most who are looking for their first home to buy. For her it makes sense to sell so she can use the equity she built from owning her home to live comfortably for the rest of her days.

[@lons5472]

Tell her to move to either Philppines or Thailand and get home care 24/7 for a hell of lot less, lol. Its what i'm gonna do after i hit pass my 70's.

[@otheh2636]

Riight. A 90 year old is going to move to a completely different country away from her family..everything that she ever knew. I just watched my husband's 103 year old grandma die and all they care about is not dying alone, without family by their side..​@lons5472

[@WongEthan-ge6pq]

I actually lost a lot of money and time on rent. The owner doesn't care about maintenance and I am forced to handle it on my own. I've cases where the owner forfeited my contact and just return my deposit when he decides he wants to sell the house, but I lost on moving costs and settling down costs. When something breaks in the rental house, you can argue it's wear and tear but the judgement right usually goes to your landlord, and he is holding your deposits. I ended up biting the bullet and got a loan to buy a house instead. Today I am happily paying back the loan with the interest and have a lot less BS in my life.

[@Wannakatana2112]

I'm going to buy a cabin, own it outright, and all my income goes to investing and businesses. Depends on the market and where in the housing "bubble" you are. Buy at the bottom and you're golden.

[@jdp486]

These buying/renting conversations are lively! I feel insanely lucky to have been able to buy a house back in 2018. We couldn't afford it today because prices have almost doubled. Re: amortization tables. Interest scared me too, which is why we made an extra payment every month until we could refinance down to 2.5%. Again, insanely lucky. Buying isn't for everyone! I anticipate owning this home for another 40 years+, but I look forward to selling and renting in the future for all the conveniences you mentioned. No yardwork, less cleaning, having fewer belongings for our loved ones to sort through when we die, etc.

[@loudandclearmedia]

This is silly. Owning a home builds wealth. Full stop. Fixed rate mortgages are a great hedge against inflation while at the same time holding an appreciating asset. Rents, on the other hand, will always go up. If you plan to stay in an area for more than a few years, buying is almost always better than renting. Stop blowing smoke at people.

[@ramitsethi]

Have you ever run a buy-vs-rent analysis? If so, in which city?

[@loudandclearmedia]

@ yes. I currently own three rental properties. 2 in Santa Rosa California and one in Battle Creek MI. The reason I own those and rent them out is because the cap rate was attractive as an investment. That obviously means that in a short period of time the residents renting it will have paid for my property. If not, it would be charity. The ONLY things that could extend that cap rate is aggressive rent control policy or local bond measures written on property taxes. Again though, that just extends my horizon, it doesn’t negate my decision. If renting truly were cheaper than owning, there would be no landlords as there would be no money to be made.

[@ramitsethi]

I'm glad you have those properties! Your last line is incorrect. There are several reasons why a renter could rent a property for far cheaper than it would cost to own. Can you name at least 3? As an example, it would cost more than 2x more to own the current place I rent.

[@lonsdalewellnessstudio9197]

⁠​⁠@@loudandclearmediaI rent a $1.8 mil property for $2500/month. Do you think my landlords ran the same calculations as you? Do you think they are building more wealth than I am as a result of our individual decisions?

[@johannamiller527]

If you want to talk about phantom costs of ownership that trip people up, please talk more about property taxes. Yes, everybody knows (or should know) that you have to pay property taxes. But did you know that when you see a "property tax" number on a real estate listing, that's NOT the amount that you'll have to pay? Rather, it's the amount that the current owner is paying - and what that means for how much YOU will pay depends on where you are. In many states, property taxes are stabilized for owner-occupants, so that regardless of how much the house value appreciates, property taxes only go up by a certain amount. In some states, that amount is zero - meaning that the owners are still paying taxes based on the assessed value when they moved in 10 or 20 years ago. If you put that number into your budget for property taxes, you're in for a very unpleasant surprise. And you MUST do your own research on this. As far as I can tell, there's no law - nor even any professional standard - that requires real estate agents or mortgage lenders to give you good information about property taxes. If you pay your property taxes through an escrow account on your mortgage, they can set your escrow payment to any old number that might have nothing to do with what your taxes are going to be. And you won't find out that anything is wrong until taxes come due and there's not enough money in the account - at which point your monthly payment will jump by many hundreds of dollars a month. You'll have no recourse against anybody when this happens. I know so many people (including me) who have gotten burned by this. But somehow, it seems like nobody talks about it, and I've never seen it mentioned in any first-time homebuyer information resources.

[@BenFranklin1776]

I dont mean to be rude, but this is wrong and misleading. First, the process for setting the escrow amount is standardized. It is the opposite of any old value. And you, as owner, have access to the documentation for it if you wanted to check. Even if your state has a Homestead protection on taxes that caps at zero increase, the assessments still happen. You can get those numbers easily as part of the process. Even Zillow or Redfin type site has assessed values and property taxes going back. If they look strange (or even if they don't) you can discuss what your property taxes would like with your realtor. Or talk to someone from the taxing government entity. If you are worried that first year will be a big debt due to some type of escalation (such a Homestead ending on ownership change) you can put extra into it. You are right that the longer a home is owned, the bigger the potential impact. But that is also a known value. While the concern is valid, treating this as unexpected or even phantom is not. Even in the rushed closing of today (mine was literally the first day the lender said they would be ready) you can still do this.

[@johannamiller527]

@@BenFranklin1776 I don't mean to be rude either, but I'm not just speaking academically. This actually happened to me, and you're in no position to tell me that it didn't. I bought my house at the end of 2021. The mortgage lender, for whatever reason, set the escrow payment based on what the previous owner was paying in property taxes in 2019. I thought the number seemed low - it was even lower than the number that appeared on the listing - so I asked them about it, and they assured me that it was right. In hindsight, I should have pushed back harder, but I was overwhelmed with all the other details of buying/moving, and it wasn't on my radar that it was my responsibility to double-check the lender's numbers. Taxes came due a year later, and there wasn't enough in escrow to cover them. My monthly payment jumped by $340, because I had to pay back the deficit that had built up and pay the higher amount that I should have been paying all along. If you're saying that my lender actually did something wrong here and there's someplace I can report them, do tell. Because I've looked into this already and have come up empty so far.

[@johnwilson839]

Two consideration which add to the ledger for buying being better. First, Minimizing moving costs if you own and know you won't want to move. These costs can be non trivial especially if you end up buying new furniture or having to reregister your personal property in a new municipality. Second, opportunity benefit associated with a long duration fixed interest rate which is not callable, but which can be paid off or refinanced at any time. if inflation rates and interest go up you are sitting pretty with a low rate and an inflating asset, while if interest rates go down you can refinance to lower the interest expense and remove trash fees like PMI. Just ask any old timer home owners who bought when interest rates were high and held on while interest rates dropped.

[@VyllenceGaming]

the way i see it this argument is multi-faceted because as life changes your needs change. You living in your rental for 10+ years is GREAT but only because your lifestyle allows you to benefit from it. if your family expands and your apartment/house suddenly starts feeling "too small" you would probably feel more inclined into owning rather than renting.

[@ryryelmdweller]

Okay this talk about landlords only charging what the market will bear is just false. There was just a big story about how a company that owns lots of properties across the US was engaged in price fixing and forced prices up by purposefully keeping units empty.

[@FTYC2022]

How does that work?

[@susiex6669]

​@@FTYC2022 More demand than units available drives rent up.

[@FTYC2022]

@@susiex6669 ohhh

[@jplebihan]

Owning a home is about the priceless intangibles: the stability of having a place to truly call your own, where you can put down roots and build lifelong memories. It’s about the freedom to customize your space and create the perfect sanctuary without needing permission. Homeownership means leaving a lasting legacy for your family, a tangible asset that can be passed down through generations. In a world of constant change, owning a home offers the unparalleled comfort of permanence. While it's tragic that homes have become overpriced for young couples in major urban areas in 2024, in a normal market, owning a home for at least 7 years remains the preferred choice for most. We're almost mortgage-free, enjoy watching the trees we planted years ago, have built long-term relationships with neighbors, and now have peace of mind in a home that has more than doubled in value since 2006. Even with the phantom costs, the value still increased significantly.

[@zackcinq-mars2129]

I would add, when some violence moved into my neighborhood, it was the homeowners who cared enough about the place to do something about it. The renters see things moving in a bad direction and leave, the owners see it moving in a bad direction and do something to change it. This is just generalities, but it has proven true for the vast majority living around me.

[@Zn0nimus]

I prefer renting, but I bought our house. Why? Because I don't like to have close neighbors. I am a light sleeper and sleeps early(9 or 10pm), so if I have neighbors close by like in a condo or apartment, most likely I won't be able to sleep due to the noise. Be nice to hear anyone's advice on renting vs buying if one of the need of my 'rich life' is peace and quiet after 9pm. :)

[@sherrimusa9701]

Relocating can be very lonely but with time you will build your own little community ! Good luck

[@BKCC420]

If you believe that you are building equity in a house, when are you going to realize the value of the equity? Only when you sell the property and don’t have to buy another one and keep the profits. Is that true? Probably not. Let’s say, you have to relocate to a new city and you decide to purchase a house in the new city. Now, if you have to buy another one, whatever money you make the previous sale is going to be invested in the new purchase. And most likely the new purchase is going to be higher price.. Right? So, what gains did you make? Only the mental consolation that I have equity..

[@joecostu1571]

Idont try to argue. my house is twice what I paid for and is going up.

[@sendingyoulovefrom6231]

I ran the numbers, we'd save $186k over 8 years by renting. I'm glad you're putting this info out there because I have never really heard this side of the coin and frankly it makes a lot more sense. My husband and I are nowhere near deciding where we're going to live for 15+ years straight, and personally, I moved around a bunch as a kid and I turned out fine. Grew up in an apartment. I don't feel like I missed out on much by not having a white picket fence.

[@rogergeyer9851]

Do you know the size of coming rent increases? If that's not locked in, you're GUESSING about future savings -- just be aware of that. I lived in a cheap apartment, so my rent was so cheap it didn't matter much. Plus once I'd been there for a decade and established my rep as a great tenant, I got a discount and knew they wouldn't raise me a lot, as they wanted to keep me. (I was stable, followed the rules, got along with my neighbors, worked WITH the management and maintenance folks on any issues, etc. It's not hard to be a great tenant if you're surrounded by transients who won't follow the rules, tear up the place, fight with the neighbors, etc).

[@derangedone13]

I used that NYT buy vs rent calculator and...... I saved myself $3,225,000 over 40 years by buying my condo rather than renting. Yay! 😁 And, really, it is probably way more than that because I took advantage of prepayment options and cut my 30 year amortizatiom down and will have it paid off in 10 years, so I saved myself probably over $100k alone in interest. 😊

[@zackcinq-mars2129]

paying off low interest debt early doesn't build wealth as quickly. While you are paying less in interest, you are also earning less in interest than if you had invested the money. If you make on average 8-12% returns in the stock market, then paying off 3-7% interest debt early will more often lower your future net worth.

[@susiex6669]

​@@zackcinq-mars2129And what if the market crashes and wipes you out clean like in 2008?

[@phillipsouthard8285]

@@susiex6669 and what if the market crashes and wipes out the entire equity of your house to the point that you're under water, lose your job, get foreclosed on, and then sued for the loss that the bank took. We can play the "what if" game all day.

[@Rachmanfan4life]

40 years? What a joke… What an absolute joke you missed the entire point of the whole video.

[@zackcinq-mars2129]

@@susiex6669 Then you stay invested and see what happens. One of the biggest bull runs started after 2008 crash. This is the importance of having an emergency fund.

[@kennethsilva3993]

My father pays $2000 for mortgage in the apartment that we grew up in he rents it out now for $2300 sure he bought the apartment 10 years ago, but he’s paying a mortgage on an apartment he bought for 230,000 that today is worth 350,000 and when we moved the average rent in the apartment building was about 1600 and now it’s 2700 so although it took 10 years he’s making all the extra money we spent on the apartment. In 15 more years When his mortgage is paid off, he will probably be making an extra 3000 to 3500 extra dollars per month from that apartment. Not every situation is the same but At least 70% of the time it is more worth it to buy than rent and make all that Money back for the rest of your life and for the rest of your children’s lives and for the rest of your grandchildren’s lives The white people are more rich in this country than immigrants and African-Americans is because they bought they built and they did not rent They grew their generational wealth and today they send their kids to college because most of them grew up in their parents grandparents uncles, great uncles or great grandparents house.

[@taifmunsur]

I live in Dallas, where you can still buy a 450k house but I did a rent vs margate calculation at 7% interest. I will pay same money as renting if I owned a 450k house where taxes, PMI and house insurance alone will be getting close to my rent. if I added the whole interest I pay, repairs, more utilities and all the other things I will emotionally drag myself on home improvement and furniture- it seems to me I am " THROWING MONEY AWAY" if I actually buy an affordable single family house vs renting modestly.

[@swithheld9905]

I appreciate what Ramit is saying! I'm tired of people doing the rent vs buy calculation and saying that renters just need to have discipline to not spend/invest the amount of $$ that would go towards a mortgage if they bought, in order to make up for the difference in order to make up the savings. this is disingenuous and bad faith reasoning, because it assumes that people can afford a house if they really wanted to, but their frivolous spending is keeping them from doing so. No. the REAL REASON most people are not buying is because they don't HAVE that $$ in the first place!! For example, I make ~$50K/year and my share of rent is $200 a week. That is EXTREMELY CHEAP where I live, even when accounting for the fact that I flatshare. After taxes + Kiwisaver retirement investments my weekly income is about $750/week. I try to save/invest 40-50% of my income and am VERY frugal. If I even qualified for a mortgage (which I do not at my income level! yet another hurdle!!) and bought even the cheapest place available in my area, my mortgage would be ~$500/week! And that DOES NOT include agent fees from the buying process, furniture/whiteware, house insurance, maintenance costs, HOAs, rates, or leasehold ground rent (because the cheapest places in my area are not freehold, they have ground rent associated with them), etc. Rates alone are another $2K/year and the body corporate fees are about $6K/year. The ground rents for leaseholds are like $6K. So the total weekly outlay would be AT LEAST $750/week (and I would still need to figure out how to pay for house insurance, maintenance, furniture/whiteware). Investing the "difference" between the housing costs and rental costs (as people advise) would mean that I need to save/invest at least $550/week. Reminder - my income is $750/week and my current rent is $200/week! Excuse me, but HOW am I supposed to save/invest $550/week when I make $750/week and $200 of that goes to my current rent? am i supposed to eat air?

[@NathanShepard]

Buy, easy. Buy because I want my own sovereignty. Buy so I can fix things when they break and not wait weeks or months. Buy so that I can own pets without paying monthly fees and forfeiting your initial deposit. Buy because I want a sense of permanent, stable housing. Buy because I want a garden and want to invest in a fence and soil. Buy because in my area, housing is still rapidly increasing. Buy because rent here is so unaffordable. Also, most of us do not live in NYC and LA where renting is often the more affordable option.

[@crazydaddy4934]

I 100% agree - and still caught myself falling for the myths embedded in my soul. We got a 370k mortgage and another 70k debt for renovation. We bought the house because "If we pay 1700 a month for the mortgage vs 1500 a month in rent ... that's a no brainer, right? This way ALL that money is equity for our retirement" Well... no. We 100% underestimated a) the hidden costs (oh hey, the boiler is actually getting a bit old and Putin decides to start a war, so gas becomes really expensive -> 20k for a new boiler; etc) b) the "life happens" side of things For a) we should have just done our homework of running the numbers a bit better... For b) ... You're not the same person you were 5 years ago. So chances are you're not gonna be the same person in 5 years from now! We thought the house made perfect sense, as we got a stable job in the area, planned to have kids, etc. - Then life came around and threw a few curveballs (both good and bad!) and now we're moving away for 3-6 years (to somewhere, where housing is provided for free). If we hadn't bought that house we'd pay 0€ in rent, basically giving us 2000€/month for investing... As it stands we're left with a house that we can't really rent out (German renting law... basically we'd have to do so much renovation it wouldn't be worth it) but also don't need for several years. TLDR: Don't underestimate the value of flexibility that renting grants you! A house really can "tie you down"!

[@filmwork1]

That's Germany

[@rdw1968]

@@crazydaddy4934 yep, This happens in the USA everyday.

[@Yellow_Afryca]

I squatted for a couple of years best financial decision I ever made.

[@ryebread447]

Ok so property taxes and insurance will always be there BUT mortgage and interest is finite! After home is paid off over time with repairs having been caught up you will get ahead vs renting. Edit: Further point i did not consider: taking down payment and invest it instead

[@letmeout1]

everyone do not forget buying a house with loan is a investment, when we talk about investment of course we need to talk about profit and risk. but if we buy it as investment then we need to know how much money it will cost for tax, mortgage and general expense, and after all the calculation, you will need to see is it worth it to buying. For example two families houses in certain region can make you have place to sleep and pay off most of the stuff with the rent you collect. Then after certain years(depends on you) you will own the property then you can decide whether you want to sell it or rent it for constant cash flow

[@jonathanmcgovern2464]

Find it strange renting is seen as throwing money away yet no one ever says bank interest is - especially the fact mortgages are weighted heavily towards interest at the start -nor other 'hidden costs'. Propaganda

[@WinterStorms-z3b]

The main reason I want to own my own property is to have more of a safety net, specifically when I finish paying the mortgage and then I don´t risk getting kicked out by a landlord when I´m 80.

[@ramitsethi]

I can understand that. What if, alternatively, you had such a large investment portfolio that your housing would never be at risk? That portfolio, which had grown and compounded over time, would pay your housing costs in perpetuity, whether you wanted to rent or own. Wouldn't that also be a safety net?

[@LadyOrpheus]

Not really. Landlords can sell to other terrible landlords. Force move outs just by making it living hell to live in a place. No amount of investment cushion can protect against that.

[@ze_ep]

What % of renters get to that multi million dollar safety net do you think? 1%? And they'll be means-tested on that cash nest egg for access to healthcare, social care etc while the homeowner will have their primary residence wealth ring-fenced. It's an incredible gamble to opt out of ownership and trust the market to keep you alive.

[@WinterStorms-z3b]

@@ramitsethi Not sure. I didn't mean that I won't have the money to rent if I get evicted; my point was that even if I CAN afford to quickly rent another place, I don't think I want that kind of hassle when I'm 70 years old. I want to be able to retire at a place where I don't risk getting evicted. Does that make sense?

[@BenMarkSilang]

My rent was 1750 euro for 2 bedroom. Now we have mortgage for 1250 euro 4 bedroom. His advice will make the lndlords happy :)

[@Cheesus-Sliced]

And thats good if you're keeping that 500€ in an offset account to cover maintenance and reduce interest. If you're not taking advantage of the savings, you'll find yourself in a very bad position when something inevitably breaks.

[@200Nora]

I think everyones situation is different. For me, a single woman, and now that I am retired, I think I could have saved more renting. I managed to cut about 10 years of paying by paying the house in 20 not 30 years, but it requires much sacrifice and discipline. The maintenance, costs and hassles of the repairs and finding good contractors has stressed me out quite a bit. Yes, I am not paying a mortgage, but the maintenance,, taxes and insurance eat on the benefits quite a bit. Since I no longer work and my savings are not of a rich person, I am now considering in selling at the best price possible and move on into a tiny house off the grid. I want a stress free life from now on. I am also considering air bb while I travel. Which one is a better idea?

[@lucasnogueira6704]

I am not from US so things are a little different, but what I did is: I rented for 9 years, but I knew it was cheap compared to the avarage. Me and wife lived bellow what we could, but we knew what we were doing. Next year I would need to renew the rent once again, and for sure now the rent would raise a lot to catch with market avarage, so since January we started looking for a home to own (also because we got sick of living in the same place and renting overall but yeah). We now just moved, and we plan to stay here for more than the 9 years we lived on the previous home.

[@tristangruener9571]

I’ve always thought that renting is legit. Me and my wife were able to rent in an area for 12 years that we absolutely could not afford to buy. And it was amazing living by the beach in California with an ocean view. Not a waste of money at all. Once we had a baby and we’re both working full time from home since Covid, we decided we needed a bigger place, so we moved to oregon and bought a house. It’ was quite expensive up front but we wanted the stability, space, and freedom of owning and a big yard for our daughter. It was worth it now for us

[@johnmeehan7884]

Whatever goofications you need to justify.

[@mr_num_numz]

@@johnmeehan7884 making up words automatically makes you look...goofy.

[@pauljansen6650]

Imagine you had bought 12 years ago and didnt have multiple rental increases and then moved as you did Your new place would be paid off in 8 years time only 😊

[@tristangruener9571]

@@pauljansen6650 didn’t have enough money to put a down payment until recently… nice to dream though

[@TheLitman72]

I used to think the same on rent. Now renting makes good sense. When you rent you DON'T take on the risk of owning the home. I'm investing the difference.

[@markislivingdeliberately]

Here’s the problem: you’re investing the difference currently. Often people start spending the difference then end up 70 without shelter. So long as you’re investing the difference you may be okay.

[@JORDIIMusic]

The amortization table was a CHECK MATE for all the people who preach owning your house over renting.

[@thespacesbetweenstudio3346]

You end up paying double your house because of interest and most interest in the first years

[@ah-rr1lk]

Pay off the house early say 5 years and invest everything afterwards

[@mickimau5]

Amazing video Ramit! I’ve been hooked on your videos since watching your first rent vs buy video. I live pretty close to the Palo Alto house in the example. I rent a beautiful bayside water view apartment, while my coworker at the same level as I am, bought an identical condo down the street around the same time. The amount of horror stories he tells me of broken appliances (they were brand new too), HOA towing his car, and many sleepless nights makes me never want to buy in the Bay. Meanwhile, I’ve consistently invested in my 401k (with a 9% company match!), maxed Roth IRA (and another one for my wife too), and maxed HSA, I’ve seen my net worth skyrocket these past 3 years while my wife and I have been traveling the world. I can’t even imagine how much of my coworker’s mortgage is being thrown away to interest right now.

[@vas.o]

In my hometown in Ukraine average rent is 244 USD/month, one room apartment costs 38 700 USD. Due to the fact that NYT calculator can't calculate below 75K, i've just take my local currency to dollar 1:1, so my calculations are "Buying saves you 2,161,000 over 15 years". What means 52 707 USD. But due to the fact that currency sometimes devaluate fast - rent always increase with USD exchange rate so is buying. UPD: there is government program that give mortgage for 3% or 7% for 20 years, payments are in local currency.