> I'd argue when the demand is predictable you should never rent, ever.
How is it possible to conclude that without knowing relative cost of renting vs. owning? Where I live, mortgage payment would be 2x-3x the rent for the comparable apartment.
the article is talking about what decision is more financially optimal. of course, yes, if you don't care about that you could rent a mansion, for example, and be broke.
All things being equal, rent is always more than a mortgage. There's no such thing as a landlord renting at or below cost. They're pricing in the costs of financing, insurance, property tax, utility connections, etc. and you're getting the lump sum.
Most of the landlords here own the real estate outright and don't have too many costs associated with it (there is no property tax, homes aren't usually insured).
The landlord’s financing costs could be a fraction of yours. Suppose a landlord bought a unit identical to the one you’re looking at, in the same building, in 2012. I live in Manhattan, where the housing market is up 80% since 2012 (source: mildly sketchy website article I have since misplaced). Average interest rates on a 30-year fixed mortgage are also up from 3.65% (first Google result) to 6.6% (Bankrate.com). Assuming a down payment of equal percentage for both the landlord in 2012 and new prospective buyer in 2022 (which would be larger in absolute terms for the new buyer), this translates to a mortgage payment that is 2.5x larger for the new buyer vs. the landlord who bought in 2012. So the rent for an equivalent unit could be a lot smaller than a new mortgage while still delivering a profit to the landlord because the landlord’s older mortgage is much smaller.
How is it possible to conclude that without knowing relative cost of renting vs. owning? Where I live, mortgage payment would be 2x-3x the rent for the comparable apartment.
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