• derf82@lemmy.worldEnglish
    523·
    11 months ago

    If renting doesn’t make sense at half of what it costs to pay the mortgage, how does the mortgage make sense

    Where on earth is renting cheaper than a mortgage?

    Let’s say it’s in Orange County where the house is $800 grand," Cardone said. "You’d have to sell the house for $2 million just to pay the interest bac

    As opposed to paying even the same in rent, where you get NONE of it back?

    assuming a 3% annual increase in rent

    Lol, what planet do they live on?

    • automattable@lemmy.world
      91·
      11 months ago

      In high CoL places, rent is routinely much lower than a mortgage— not to even mention the incredible down payment that you have to get the loan in the first place.

      As an example, a one bedroom apartment in SF would cost you around $1,000,000 to buy. If you somehow have $200k to get a mortgage, your monthly payment is about $6k. To rent that same apartment, you’d only (lol, only) pay ~$3000-4500.

      On top of this, the cost of owning is higher than just your mortgage payment. Your lender will most likely require homeowners insurance which can easily run a few thousand dollars per year (compared to a couple hundred for renters insurance). You also have to pay for the big repairs yourself when as a renter if the heat breaks that’s the landlord’s problem.

      • yaaaaayPancakes@lemmy.world
        4·
        11 months ago

        This is me. I live in LA, near Hollywood. I pay 3k/month in rent for a 1200sq ft 2br apartment that’s close to everything.

        A condo similar to my apartment (it was a condo conversion of a building similar to mine) in my neighborhood sold for almost a million this past year. That’s about 6k/month all in w/ taxes and whatnot, not including maintenance costs.

        Why the fuck would I pay double to own the same thing, and lose all my flexibility, when I take that 3k difference every month and invest it. Which builds wealth too. Sure, my investments may not be as inflation protected as a home, but they’re a lot more fucking liquid. And I can move in 30 days no unsold house hanging over my head.

    • CancerMancer@sh.itjust.works
      8·
      11 months ago

      On that 800k house, it takes a little over 30 years to get 2 million out of it if the house appreciates at 2% per year. Housing in many places has appreciated much faster than that (much faster than the market or any other single thing, including cryptocurrency)

      • yaaaaayPancakes@lemmy.world
        2·
        11 months ago

        And this is why we have a housing shortage. Because it’s in the financial interests of owners to restrict the building of housing.

      • BargsimBoyz@lemmy.world
        3·
        11 months ago

        This is not correct for Australia.

        I’m looking at places in Melbourne at the moment. A 1-bedroom place is around $450 a week or $1800 a month roughly.

        You can easily get a cheaper mortgage than that for a 1 bedroom place. Potentially even get a 2 bedroom unit for same as you’d pay in rent.