Rent is included, his argument is that if rent and mortgage costs were the same then renters don't have the added expense of property upkeep so they could invest that "savings" in the market. He did not do a very good job explaining this.

The obvious alternative for the scenario he gives is buying a less expensive home (likely similar to the one you would be renting because we all know how that works) and investing those savings. With his example being a $400k home you would be shopping in the $325k range. At the end of 30 years you'd have a home and idk, a million dollars in the market. He's not specific enough to give hard numbers.

I don't understand, rent is something that people give me, why would it be factored as an expense?

I don't agree. You also struck gold in a real estate boom in 2020-21, it's very rare historically for a home to appreciate 7.2% annualized over four years. Normal home appreciation is closer to like, 3 or 4 percent annualized and if you hit a 2008-2010 situation you're boned.

You also have to deduct the closing costs of both buying and selling (tens of thousands, probably), the fact that (unless your paid cash) you only built a fraction of the total equity in the home, and the costs of maintenance which probably were multiple thousands per year. In a normal market home ownership is a much worse investment than it happened to be the last few years.

You paid 219k for the house and sold it for 290k, a gain of 71k. But unless you were making giant extra mortgage payments you had at most 30% equity in the house after 4 years. So your 71k profit is really 21k. You also paid closing costs on both the purchase and sale of the home, those closing costs likely totaled at least 18k and probably more. I don't want to make too many assumptions, but if your home purchase was conventional your investment probably barely broke even and could easily have been a net loss.

This is what you call "pulling the rug out"

The serious answer is no, because real estate is a great investment if you already have landlord money because you avoid mortgage interest.

Real estate is a terrible investment if you don't have the money to pay cash for it and have to take out a mortgage instead. This article is correct no matter what the debate bros and J.P. Morgan Chase Bank shills in the comments are telling you.

Tax breaks are diffeeent for landlords. This is true. You can’t write off when the HvAC breaks, hire a shoddy contractor to repair and then pocket the tax break

Any homeowner who is telling you it's better to rent is taking about renting out their home to you for the price of their mortgage, maintenance, and a little profit treat on the side for them.

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It depends on the area I guess, but I don't agree with some of what you just said. Renting isn't terrible, but owning is ideal. There is a reason people are increasingly being shut out of being homeowners. Housing is a need and people with capital stand to make a lot of money if they can succeed at stopping you from buying a home.

Real estate moguls and landlords are the people that stand to make crazy money from the housing market. Buying an individual house as a financial investment itself isn't really any way to build any kind of wealth unless you were able to buy in an area that is expected to greatly appreciate and flip it.

Buying a house/townhome/condo gets you out from underneath a landlord and ensures that outside of taxes, your monthly payment on your house NEVER increases assuming you have a fixed mortgage. Your landlord decides what you will pay either according to market prices or how much they know they can price gouge you because housing is a need. This is why landlords are evil because they leverage capital to exploit the housing needs of people.

All the things you listed as "home-owners have to pay for" are things that YOU ARE PAYING FOR WHEN YOU RENT. In fact, you are expected to maintain the interior of your dwelling while not owning any of it. You claim that a mortgage is no different than paying rent, except for the fact that your landlord owns, and determines what you will pay.

The upfront costs function as a way to filter out poor people from ever owning. Sure, it is still "renting" if you want to consider that it is rent from the bank, but there is no middleman landlord.

Home ownership isn't about trying to save vast sums of money. A lot of your post is ignoring the autonomy a homeowner enjoys over a renter. (Can you even repaint your apartment you are in?) It doesn't account for differences in square footage, or how existing infrastructure of the US caters to houses/townhomes.

Also the homeowner can also "invest in stonks" just as easily.

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This really reads like something someone who hasn't had to rent in a city in the past 20 years has written. My rent on the outskirts of a city of 100,000 with a minimum wage of $7.25 is $2,000/month (plus yard maintenance). The mortgage on the house were renting is $1,300/month and taxes bring it to around $1,600/month max.

Renting is entirely a scam that forces the renter to pay for all the homeowner's expenses plus a profit for the landlord. My grandmother gets a $5k/month pension from her union contract and is constantly complaining about how expensive her mortgage is. All in? She pays $1,300/month.

Meanwhile I work 45 hours a week and my girlfriend works 50-60 hours a week to pay our rent and have nothing left at the end of the month.

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Assuming you have a basket of money and are simply undecided, renting is effectively a short on the housing market in your area between when you move in and when you move out. You're theoretically just saying that the expected proceeds from selling your house, plus net savings on rent vs cost of buying, minus a time premium, will be lower when you sell than when you buy If you plan to move in a year, transaction costs will likely eat your gains no matter what. If you plan to stay long enough, the time premium depends on how much you valuable the stability of living in one place with fixed/decreasing monthly costs vs what you expect to make in the market. Eventually, unless you have a huge pile of cash, you get old enough where that stability (so you don't have to keep grinding every month) is more important than chasing gains.

The only reasons why home ownership isn’t the single worst investment in the world (and honestly it still might be) is because you get some pretty sick tax breaks for it like the mortgage interest deduction and SALT deductions.

That and leverage (which is subsidized via cheap government mortgages). Real estate will always under-perform investing in the market because real estate is a lower risk asset. You sacrifice some gains in exchange for "not camping in the street" and also "not subject to some asshole called a 'lord' and paying him tribute". In practice, the whole point of "landlords" for the Capitalist class is to drive up the price of housing to force you to have to provide more labor - you have to provide V more dollars of labor a month than you would otherwise to pay for the landlord's profit, while you're boss makes V*(rate of exploitation) extra profits from you working that much more. It also drives up the value of land which theoretically allows them to take out more loans to invest more money based on the "value" of any property a company may own.

Certain cities are so expensive to buy in that you can actually make more money if you just invest the money equivalent to a mortgage in something with a high rate of return. Usually things like index funds. This requires the line to go up, but it's pretty clear at this point that the line is completely detached from reality and everyone in both parties (in the US) will do everything in their power to make it continue to go up. I got something insane like a 12% return last year while a million people died and millions more became unemployed.

That said, the two people I know who had enough money to try this (both in tech) got so pissed off at a series of bad landlords that they ended up just buying anyway. EDIT: Note, this is for apartments only.

I promise you 90% of the people in this thread have absolutely no fucking idea what they're talking about and are dispensing terrible financial advice along with bank industry propaganda.

Let's say you have enough money to pay a down payment and closing costs on a home. You have two choices: 1) Purchase a home with a mortgage or 2) Rent from a landlord, and invest the money you otherwise would have put down in stocks. This article is - correctly - claiming that 2 is the better financial decision.

The reason is this. Consider the costs of home ownership. First, you have to drop ten thousand dollars or so on closing costs. So that's $10,000 right down the drain, a good chunk of a year's rent completely flushed away that you would not pay had you rented. You also have to drop, say, $50k on a down payment (which you can recoup - more on that later) that you could otherwise invest.

Now, consider costs associated with owning a home. Mortgage principal, mortgage interest, property taxes, homeowners' insurance, and home maintenance. All of these expenses other than mortgage principal are absolutely no different than paying rent. It's just money flushed down the shitter, too. So 80% of your housing expenses, right there, are down the shitter just like renting.

Now, let's say you do buy the home, it appreciates in value, and you want to sell it. Great, well time to spend another $20,000 on closing costs again - right down the shitter.

Let's say the real estate market appreciates 4% annually and the home was purchased for $250k with 20% down and a 3.6% interest rate. The homeowner wants to sell after 5 years, when the home is worth $305,000 and the homeowner has 28% equity in the home (approx. $85k).

So, you paid $30k in closing costs in order to make 28% of 55k in home appreciation, or $15k. Your decision to purchase a home cost you $15k ON TOP OF YOUR HOUSING COSTS. Let's say rent is $150 more a month than the cost of a mortgage, interest, taxes, insurance, and maintenance put together (an EXTREMELY generous assumption).

You spent $15k on closing costs to save - again, generously - $9k on housing costs. Purchasing that home was a terrible decision. If you invested the $60k you spent on a down payment and closing costs instead, you would probably be up well over $10k over where you are now.

I promise you, this is a solved question. Do not listen to the godawful advice in this thread.