How To Weigh Renting vs Buying A House

[@richardgnyc]

This is primary residence question, not investment property. If it's a primary residence...it's not an investment. Then look at opportunity cost with sp500 vs renting vs buying when deciding things. If you're in a expensive city (CA, NY, FL) and looking at houses and condos that are on average 600k+, you're better off investing in sp500 8% which is like 4k+ a month. If you get a cheaper property like 300k+ coop or cheap condo with hoa or maintenance fees are under 2000, then sp500 will only give you maybe 2k a month and then it's becoming more equivalent to renting. There's also home appreciation vs sp500 performance difference. Decades later rent and hoa/property tax will double and so will your equity...but the sp500 will do this in less time, these are small passive investing concept and it's limitation compared to active job/career, active investing or active business.

[@saulgoodman2018]

Buying is not always about money. Maintenance and repairs is not expensive as people make it to be. Rent will always go up. You mortgage won't.

[@wealthfrontvideos]

Thanks for watching 🙌

[@sydual5887]

"Rent will always go up" this isn't true. On average, housing costs have just kept up with inflation (See Schiller's research). "Maintenance and repairs is not as expensive as people make it to be" usually it's around 1% of home cost. I recently had to fix my AC and water damage which was 3k and 8k respectively. The floor is also getting really old which would be 12k. Not small costs

[@Vince_Allison]

so at 3:35..."let's say you are able to save $150,000 this year by renting a home instead of making a down payment on the purchase of one" Is the assumption that the typical renter happens to have 150k in cash SAVED UP...in ONE YEAR? Thats more than twice the median household income in the US, let alone what they may have saved up in a year. Plus, let's say the typical down payment is 20%...this typical renter is looking at a $750,000+ home? I understand this is for illustrative purposes only, but the example here feels extremely disconnected from reality, or at least from the target audience. Please tell me I am misunderstanding something.

[@wealthfrontvideos]

Hey great question as we can totally see how it’s interpreted that way. It is not meant to assume someone would save 150k in one year. It’s meant to illustrate the scenario in which you would “save” 150k by not buying the home and instead invested that money. So the 150k is theoretically already saved up but you invest in the market instead of using it to buy a home. Does that make sense?