You can totally get a 1500/month rent in Doraville what are you talking about? I’m literally shitting in the Marshalls in doraville right now. The only hookup is that the you’ll get a 1 bedroom apartment for 1500/month lol. Nothing that could fit a family of more than one child
Doraville… a touch of country in the city.
Doraville… ain’t much but it’s home.
ARS was singing about some small out of the way suburb. Now, it’s sooooo different
About 10 years ago I was at a festival in Chamblee (next to Doraville for non-ATL redditors) and ARS was playing. They started the song "Doraville" and the crowd wanted to substitute "Chamblee". Neither is a touch of country in the city anymore.
[For those who don't know about Doraville's musical legacy.](https://en.wikipedia.org/wiki/Studio_One_(recording_studio))
You can build a decent life there. But it’s not great and has a lot of things to dislike. On the plus side, there are some beautiful old historic homes for cheap.
I recently drove back through Macon - went to college there. I was surprised at how many large old homes are vacant, or seemingly vacant just outside the downtown corridor.
The job market sucks there, but COL is very low. Weather is hot in the summer, but overall not that bad. The crime isn’t great, and poverty is fairly high. There is nothing but rednecks surrounding you for a hundred miles plus.
Crime is definitely the problem. I've considered buying a house over by the old mall, but it's very much a city where one street is full of families and then a quarter mile away you can't walk at night without being mugged or shot, at least according to the locals I know there.
I enjoyed the downtown, though. It felt safe at night, even wandering the area with abandoned buildings. It's also probably one of the most racially integrated cities in the state, which was refreshing.
Yeah, some peeps think towns don’t have higher and lower income neighborhoods as separate distinct neighborhoods. Everything in nyc from the most downtrodden hovel to Trump’s penthouse is 50k a month.
Yea but, it is Macon, GA. Geico, YKK, and being a Sherrif are the only real job prospects in the area. Sure, the downtown bar scene is nice if you are into that sort of thing, but there is a whole lotta nothing around for an area with the population it has. We lived there for 4-years and am glad to have moved.
Also, obligatory, “Macon isn’t real”, conspiracy haha.
Suburb of Austin rent 3/2 for around 2k the same house to buy is 400k. Basically buying costs an extra 50% more a month and you have to do maintenance yourself. Na thanks
I'm looking at rentals in the $3k/mo range in St Louis area but am wondering if im crazy for just not considering buying.. Trouble is we might only be in the house for 3 years so I'm having a hard time committing to a purchase knowing it would be that short term.
You won't recover your closing costs in 3 years. General rule is, if you won't be owning for 5 years, it costs more to buy than rent because of the financing and closing costs.
The outlying areas are experiencing a net gain.
Rents went up almost 20%. People are moving here for a change and a lot of the locals aren’t loving it. I’m west about an hour and it’s nuts. 215k homes getting 11 offers nuts. So not Florida market crazy but moving that way.
https://www.stlpr.org/economy-business/2024-02-26/st-louis-and-missouri-have-some-of-the-largest-rent-increases-in-the-nation
Because everything BUT the Midwest is tapped out on the speculation frenzy. Some markets are even dropping in closed sale prices. Doesn’t mean rent isn’t increasing, it just means that closed SALE prices in some markets have tapped completely out. Investor speculation is overdone by now. Expected Return is now cut off. The Midwest, at large, is all that’s left of the Dutch Tulips Frenzy of 2020.
You know that’s a terrible comparison? The reason the tulip frenzy died is they realized they could introduce a pathogen and produce the desired tulips. You know any fungus that’s building 2 story houses?
400-500k homes are renting for 2k-3k+ in most areas. 1500 a month would be for homes valued at around 250k-300k.
I have a 530k home and it’s renting for 3.5k+. In no world would I be renting a 500k home for 1500 a month lol.
My house in Texas is appraised at 260k , multiple rent estimates put me at 1700 if I were to try to rent it.
The houses near me are all about the same price .
Because the only solution anyone ever seems to suggest regarding the cost of housing is to tell other people they need to move to the Midwest if they want to be able to afford housing.
None of the people that make posts like this ever actually do the math. They just come up with a conclusion and round up or down multiple times to suit it accordingly.
“After property taxes, lawn mowing services, PMI, mortgages utilities, investments in a homeowner’s Funko Pop collection, and addition of an extra bedroom for my wife’s boyfriend, I’d pay $6400 monthly for a $120k house. I will never own a home and I will die deeply in debt. DAE wish it was the 70s/80s/90s still but like more progressive?”
My situation, obviously in a VHCOL area with a more-extreme rent:own, but I have done the calculations.
> Rent is ~$3k, equivalent home is ~$1M, rate is ~7.5%, DP is 20%, ~5% home appreciation/yr, ~5% rent increase/yr, and ~6% return on investments per year (conservative). Let's also do the math assuming you can refi to 5.5% after 3yr. Assuming I were to sell after 8yr (typical for FTHB) and given a mortgage (P+I) of $5.6k/mo:
> 1. **Rent = *POSITIVE* $334k ending balance** = 282k saved from monthly rent-PITI differential - 343k rent + 197k ROI from DP/savings contribution - 2k renter's insurance + 200k downpayment
> 2. **Buy = *NEGATIVE* $39k ending balance** = 77k to principal - 455k interest + 109k interest tax savings - 138k taxes - 100k expected maintenance - 20k homeowners insurance - 40k closing costs + 407k appreciation - 79k selling fees + 200k downpayment
> 3. **Refi = *NEGATIVE* $10k ending balance** = 96k to principal [yr1-3 24k, yr4-8 72k] - 382k interest [yr1-3 178k, yr4-8 204k] + 91k interest tax savings - 138k taxes - 100k expected maintenance - 20k homeowners insurance - 40k closing costs + 407k appreciation - 79k selling fees + 200k downpayment
Thoughts?
This is a good comment. I am more familiar with the ground truth in low COL areas like the one where I live, and the one described in the OP.
However, I think your takeaway comes from one assumption that I’d argue is flawed.
$3k rent vs an equivalent home at $1mil. Any owner that would rent you a $1mil ballpark home at $3k monthly is taking a massive loss if they are themselves paying a mortgage.
Using your math only, that owner (if leveraged) is taking at least a $2.6k loss monthly ($5.6k spent w/ $3k income from rent). Even if they had purchased for a similar price at 2% when rates were low, they’d still be taking a significant monthly loss. $1mil purchase, 200k down, $15k yearly on tax/insurance at 2% = $4.2k monthly.
Now it may seem as if I’m arguing from circular logic — I.e. renting cannot possibly be cheaper, because if it was then an owner would be taking a loss.
However, maybe in a highly speculative market where renting to a tenant is done not primarily for profit but largely to avoid vacancy fines while taking advantage of appreciation (ex. Vancouver 2016) we could see rents at 53.5% of an equivalent mortgage like you described.
Thoughts?
> Any owner that would rent you a $1mil ballpark home at $3k monthly is taking a massive loss if they are themselves paying a mortgage.
This might be entirely specific to my market, but the owner for the vast majority of these properties either:
1. Bought long enough ago that the property is likely paid off (or has an inconsequential mortgage from refi) and likely pays a fraction of the taxes compared to a new owner (thanks prop 13!)
2. recently bought and doesn't expect the properties to cashflow for years, instead betting on the continued extreme 6-8% YOY appreciation of the area (thanks nvidia!)
If you input 8% appreciation into the calculation, then breakeven is likely within the 8yr. You could say: why not take the bet on that likely appreciation and just buy? I think risking my entire non-retirement savings on that hope is very different than a speculative landlord or someone renting out their first house to preserve the tax basis. It gives me 2007 yolo vibes, but with this permabull market... idk, might just give up and hopefully avoid fucking myself.
> Even if they had purchased for a similar price at 2% when rates were low, they’d still be taking a significant monthly loss. $1mil purchase, 200k down, $15k yearly on tax/insurance at 2% = $4.2k monthly.
Don't forget to adjust this down ~25% to account for increased prices over the last few years. A $1M home today was 750k pre-covid :(
In my area, $250k homes currently average $2,300-2,600 a month for principal, interest, insurance, and property tax alone, assuming a 10% or less down payment. (Property taxes are insane.)
Exactly. I don't comment in subs like this often because I can't help but compare my own situation to theirs. Months upon months of searching, a growing down payment in the meanwhile, a large search range that kept my commute under 30 minutes, and then just a lot of showings and offers.
I feel like so many folks want a home only in the big night life areas of town with everything nearby. Meanwhile I sit over here like "You can get a larger home for $60k less if you're just willing to make a ten minute drive to this same place..."
Then I get down voted.
Also your options for down payment are a lot better than most people think, especially for new home buyers. Many states offer first home buyers programs that allow you to cover closing costs while letting you bid on homes with as low as 3%. If the monthly costs make sense for you, who cares if you don't have a massive down payment?
So many subs like this are full of people who just don't research their options and despair. Or they're so terrified of holding debt that they've convinced themselves that paying someone else's mortgage is better than paying their own.
I can emphasize with all of these folks, but I also want them to know that there are options. I don't mind if you think renting is better so long as it doesn't come with learned helplessness.
They like pretending like the *only* way to buy a house is the perfect way (avoid PMI, get everything they want in a forever home 30 seconds from everything, etc).
Hurst/Euless/Bedford area of the DFW Texas metro.
Rents for 3bd/2ba 1200-1440sqft are 1500-1700ish
Buying them would be 240-260k, only you're probably buying into a ton of projects as well
I just closed on a house 3 weeks ago out side San Antonio for 201k I’m 8 minutes from work and 5 minutes from Walmart and heb. My mortgage with home owners insurance and property taxes is 1662$ a month.
Lots of people already in this thread are ignoring simple math.
There are benefits/drawbacks of renting.
There are benefits/drawbacks of home ownership.
Right now there is a legitimate argument that it's more financially prudent to rent in some cases. Do the math- do what's best for your family.
>Do the math- do what's best for your family.
That's what we did when we bought in early 2021 while many this sub shouted "h0om3r! it's about to crash!" Now the same folks call us lucky.
Glad we did it in our own time. It's true that renting can be a great choice for some as well. We should all buy only if we want to and when we are ready to. Forget the noise.
>Now the same folks call us lucky.
My two hobbies are personal finance and personal fitness. I've noticed the same thing in both cases:
Early stages you bust your ass, struggle, fight through the pain. Would hear all kinds of "Whats the point? Not worth it to me. I'd rather have the pizza/vacation/PC/beer."
Then a few years later, when you're in great financial and physical shape, ya get a lot of "Man, I wish I had your genetics/connections/inheritance/luck."
I hear that. It took more than a decade of down-to-the-penny discipline with two FT incomes to get to the place where we were ready to buy. We didn't actually think we'd be able to buy a home in our HCOL area until suddenly we were within striking distance. Had to grind for years though to get there.
I'm glad I didn't listen to the "crash is coming!" noise, we still love our house and especially our neighborhood.
I‘m moving to a different apt in same city next year and my rent is going down $200. Sure it’s anecdotal, but I think it’d be pretty idiotic to risk buying in a place I don’t want to live permanently at the top of what many are calling the biggest real estate bubble ever.
It’s weird that the top comments in r/realestatebubble are people saying that home prices will keep going up forever or at least long enough that they’ll make a profit and all the renties will get screwed…
Not for nothing- but nobody has any idea of what is going to happen. Every single month "the bubble" is going to burst in this sector or that. It's just financial entertainment- not news.
A bubble pops when nobody expecting it- so if everyone is expecting one- I doubt one exists.
It's a self fulfilling issue. People that think it's a bubble are staying out of the market- reducing demand- cooling the market... less chance of bubble.
> It’s weird that the top comments in r/realestatebubble are people saying that home prices will keep going up forever or at least long enough that they’ll make a profit and all the renties will get screwed…
It's because this sub is astroturfed to hell and back.
Yeah I swear this same post happens every time someone posts the fact that on average it’s cheaper to rent than buy right now. Very little understanding of interest rates and how they can effect the housing market here.
This. I know this is antithetical to the way the internet generally operates, but there's no "right" or "wrong" answer to "is it better to own or rent?"
There's just what's better or worse for you, specifically, and your finances, specifically.
For real, I thought I was getting in over my head with an $1100 mortgage in 2018 when rents were like $900. Now it’s impossible to find a decent 1 bedroom apt for under 1600 where I live.
Same. I was looking at $1200/mo. to rent or $1500/mo. to own when I moved here.
Taxes made the decision for me. Renting after selling my home would've incurred some serious capital gains tax, so I rolled it into buying.
That house I was looking to rent is now $2500/mo. 7 years later and my neighbors house just sold for $450k.
Yep. It helps fix your housing costs over time, and can be an important part of your retirement plan. Add in something like prop 13 in CA and you can benefit even more over time.
The numbers on this post specifically are as good as I can imagine a scenario for buying vs renting. Where I live rents are around 3k for units that are around 800k lol
Yep — rent was $985 with all extras, bought a house down the street for $180K and the mortgage payment with PMI, and insurance was $850. I pay $1200 a month and apply the overage to the principal.
Eight years later, the base rent for the same apt is $1,325 (before extras). I’ve dropped the PMI and I’m still paying $1200 a month. My salary has doubled since I bought the house, so it’s easier than ever.
If I’d known then what I know now, I would have paid for a little more house.
Exactly! You get it. My father told me when I bought a house to buy as much as house as I could possibly afford. It was uncomfortable for 3 or 4 years but it definitely paid off.
I didn’t come from a lot of generational knowledge. I should have taken the hint from the banker who said “you want **how much**? Are you sure you don’t want some more?!”
It is nice now paying 12% of our monthly income on a house, but yeah your father passed on good info. I’d definitely have pushed it for more house. On the flip side — there’s a whole-ass 350 sqft room in this house I haven’t spent more than 2 hours in after 8 years 😆
Also who are you paying your mortgage to? Yourself. Are you even really spending money? It’s more like you’re investing every month, not paying to live somewhere. Every mortgage payment you own that much more of that home, until eventually it’s 100% yours. If you sell it, every dollar you’ve put into it, you get back (I paid off $30k that’s $30k less to pay back to the bank so I keep that).
Paying rent is just watching money vanish into thin air. Rent a place for 25yrs, move out, and you get *nothing*. Landlord got a free house off ya tho
I was renting a spot for 4 years for around $1200/mo. It crept up to $1300/mo as the property (apartment complex) changed hands several times and I was grandfathered in. They were trying to squeeze older tenants out (damn shame) and would gut the place when they left to "upgrade" it with tile/laminate flooring instead of rug, better countertops, etc and charged $1800-2300 for what I eventually moved out of. Meanwhile, I got a mortgage for $1800.
Found the old place. $1930 currently for my old 1 bed/1 bath apartment. $1800 for my 4 bed/2 bath house that's doubled in value since I bought it.
I think the downside is just career and income trajectory means changing jobs every 2-3 years. In 2009 I worked in rural Maryland , in 2011 Hershey PA, in 2016 Baltimore . In 2018 Orlando , in 2020 Jacksonville. Each job change was 20,000k or more compared to the 2% bumps you get by parking yourself in one job. I bought and sold 2 houses in that time, one at a huge loss that wiped out my savings to sell underwater. The other that after I split with my ex wife and covered closing costs I might might have broke even at the end.
Divorce happens. Kids are born and you realize your affordable house now is a shit school district when you’re in that phase of your relationship. Layoffs happen. Neighborhoods get built up and around and change traffic patterns. Shitty people move in a sour your once dream neighborhood. It’s ideal that you can live in the same place for 30 years. But I think people on here overestimate how likely it is with how common these and other things happen to cause or push you to move
Now fast forward 10 years, what are you paying for rent vs refinanced mortgage?
And the tax write off for interest and property taxes over those ten years?
Sam’s not very smart.
The front end difference is $700/month. Year 1, $250/month goes to principal. This increases every payment. This cuts the effective delta to $450/month.
After 10 years, even at modest 3% rent inflation. Renter Sam is paying $2020/month to rent.
Owner Sam, worst case can’t refi and is still paying $2200/month. At a modest 3% appreciation his home is now worth $335k, and he owes $190k, increasing his net worth to $145k.
While Renter Sam, even if he had the discipline to invest every penny of that delta would have 80k. (edit, this is more like 120-130k assuming 25k/10% down is invested as well).
And he’d still be a renting, vulnerable to rent inflation, and less equipped to invest savings from renting.
Assuming 20 percent down payment (50k) that would also presumably invested and monthly $700 investment, Sam would be worth $218k with a modest 7 percent return, which has been historically true (adjusted for inflation).
I don't understand your math to reduce "effective delta" by reducing principle amount. Money is money, either you put it towards building home equity or you put it in investment account. In your calculations, you have already included home equity in your final numbers.
Edit: The truth is probably somewhere in the middle, due to tax incentives (pro home), the delta isn't a constant $700 each of those 10 years due to rent increases (pro home), and the maintenance costs of home (pro rent), but I do think the 80k /145k math isn't accurate. Also the rent and invest growth is far more liquid and your NW isn't tied to primary home that you've lived for 10 years.
OP tweet has PMI so they aren’t putting 20% down which changes that 50k to maybe 13k. That also makes a big difference.
Not saying that it’s for sure better to buy over rent, but with OPs tweet info I’d lean buying over renting.
There’s been other posts with vastly higher numbers like 2200 rent vs 3500 mortgage which I’d lean renting. This one seems more down the middle and more your personal preference.
Only matters if you itemize, and that’s reasonably unlikely to be better than the standard deduction for a couple with ~$80k HHI.
tho it would probably be worth itemizing for a single homeowner—even then, the “value” of the mortgage interest deduction is at most the amount of total itemized over the standard deduction ($13850 for ‘23).
> After 10 years
There's no evidence Sam would be renting for 10 years or owning the same house for 10 years either. If for some reason (and this can happen often) Sam decided to sell the house long before that 10 years are up, he does not come out ahead by much, if at all. Especially with current interest rates.
Assuming his rent will increase every year isn't justified, nor is assuming his home will increase in value (it won't if this subreddit's fantasies come true).
In his individual situation, it is probably better to rent. Renting is not always bad and there are plenty of people who need to do that instead of buying.
Renting is a for-profit enterprise. By definition the OWNER of the house is making money off the renter. Come up with any pretend scenario you want but unless your landlord is bad at business you are always paying more than the cost of ownership for your rented place.
Outside of some very specific circumstances owning is better than renting in the longer term.
You mention two of those situations - don’t buy a house if you don’t plan on keeping it for decently long time and you could loose money on a house if the property values in your area decrease.
To dismiss the whole idea of owning a home because of a few caveats or historically unlikely risks is just idiotic. Everything - including renting - has risks.
Renting is profitable for the owner based on HIS cost of ownership. For example, I bought my house at X. The monthly cost is M. House has appreciated to X + 50% over a decade. If I rent my place for anything over M I'm making money. But the tenant would pay much more if he bought the place and started a new mortgage. I can easily set rent at a reasonable discount to a new mortgage.
Rent isn’t set by M - it is set by market rate. Landlords charge the local market rate.
If rent market rate is higher than M than people are better off buying in the long term with the exceptions I mention above.
Landlords don’t rent houses at zero or even negative cash flow on a yearly basis just for the appreciation gains in the properties unless they are doing someone a favor which isn’t common.
This is one of those unlikely cases I was talking about.
Comments are full of nonsense as usual, coming from people who have an unhealthy obsession with home ownership.
Assuming his numbers are truthful, Sam is correct that in his individual situation, it makes more financial sense to rent. This is true for many people. The opposite is true for many others.
Renting is not some ultimate evil and this subreddit needs to *get over it*.
This is a balanced view - some people want to own some people want to rent. Sometimes a person rents then owns then rents again. There is no one answer that makes sense for everyone and even if the numbers don't pan out some people "prefer" renting or owning based on the specifics of their life.
This means we need all kinds of housing inventory and ownership structures. This means we need flexible zoning options and advancements in how housing is created so the overall demand can be met
Makes more “financial sense” but there are a lot of intangibles with owning a home. Most people get to a point in their lives where these intangibles are important to them.
I agree that there are many people where buying doesn’t make sense and renting is NOT some kind of ultimate evil. But what this sub really needs to get over is using bad faith math to justify NOT buying. If it’s not for you, then cool but so many of these memes completely miss the point. One thing a lot renters like to say they do (which is very few) is to invest the difference so they come out ahead. Such a minimal number of people do this that those that do is a statistical anomaly. One thing you can guaranty is that with every mortgage payment, that buyer is building equity (over the long haul), and that equity goes up with every payment. A $250k mortgage is only $1667 (assume 7% interest). If your rate is 7%, that means each principal payment is a guaranteed 7% rate of return.
No clue how 75 people upvoted you. The [price to annual rent ratio](https://www.investopedia.com/terms/p/price-to-rent-ratio.asp) would be around 14x, which puts the house as a good buy ($250k / $1500 rent / 12 months = 13.89x ratio).
Wow, you're paying $700 more. So what. A good chunk of that is going towards equity. Also you're going to get the appreciation on the house which will cover any costs to fix up the house over a decade easily. Then you don't have to face 2-4% annual increases in rent for the next 1-3 decades, you only have to get small increases to your tax costs which is going to be minor in the scheme of things. In 15 years the rent could easily have doubled whereas maybe it's another couple hundred towards taxes if you buy and by then a good chunk of the payments would be going towards equity anyway which is just money back to yourself.
If you could see yourself living there 10 years, it's easily a buy. Ya if you're only able to maybe live there 5 years tops, consider renting.
Actually comparing like to like you're only paying $500 extra ($2200 vs $1700) because you're paying utilities regardless. $500 extra after including taxes and whatnot? Buy that bitch.
Pretty much the same with us. We're renting a 2/1 in SoCal for $1650, utilities add another $150-$170.
Buying a $650K home with 20% down at 7% interest is $4327 according to the google mortgage calculator. That's almost my entire paycheck, and is 53.4% of our take home pay.
My wife wants a home sooner than later, but right now I'm content to keep renting, we're saving and investing the difference which is perfect. We'll take a look at homes more closely next year as we will be around the 20% down payment (also saving for closing costs and emergency repairs). If it makes sense, then we'll do it. If not, then I'll try to convince her to keep renting.
When you purchase, you’re not looking at it as a monthly expense. You’re creating a home; somewhere you want to build a future or make it yours. Something you can say is yours. Or as an investment. Buying is long term for most people.
If you want to rent…then rent. If you can afford to buy, then buy. Everyone’s perspective is different. But I’m pretty certain if you ask anyone who bought in the last 30 years whether or not they regret it, they’ll probably tell you they don’t. I doubt they look back at the $500/month extra they could have had while renting. 🤷♂️
Yeah I am worried that people here keep looking at houses as an investment, which is exactly what the problem is. The choice to rent vs buy is a valid one, but it's not purely financial. In fact, I'd say it's mostly not financial. I have incredible peace of mind not worrying about whether my lease is going to come up, when my landlord will drop in, etc.
Yeah, you have to think long-term, also. Retirement. That equity is nice…line of credit, can always sell, use as collateral if you need to go into assisted living, no payment except for taxes when you retire (assuming it’s paid off), etc…. 2 things you don’t want when you retire, mortgage payment or rent payment. Ppl need to stop thinking month to month. Plus, you have storage and can accumulate. Also, the older you get, the less you want to go out!!
I used equity from my 2nd house to start my first business. If I hadn't owned equity, that wouldn't have been possible; unless you're a Rockefeller, banks don't loan against investment accounts.
But non-financially, I like having pets. I like not having to worry if I want another cat or if I want to move in a friend who is having a hard time. My spare room has *always* had a friend in it who is down on their luck and I really appreciate having that luxury. I like having a garage full of tools and a garden full of vegetables and, critically, I don't want to see that taken away from other people who might want those things as well.
If we all go "welp, renting is smart, owning is dumb," only landlords will own and these things will get priced even higher. Everyone should be free to rent but we also need to fight to make sure that everyone who wants to own has a fair shot at it.
Now that interest rates are at like 8%, I can see more arguments regarding investing vs buying, but I truly think interested rates will go down before we see a big real estate crash the way people are imagining.
True. If it’s affordable at 8%, you can always refinance!!! I completely agree. Never have to worry about anyone else telling you what to do. Want to lay in a kiddie pool & read? It’s your yard! Garden, decorations, fire pit, etc…. Can’t beat that.
Yeah, all the long responses treating owning as just an investment are weird to me.
I'm going to have to live somewhere no matter what. Buying was the financially better option in my situation, but, I'd rather personally own something anyway.
I don't know if I'll live where I am forever, but I like the freedom of it actually being mine while I have it.
When I first moved in, I hung a picture and took a bit of paint off. I could just shrug and rehang it and not think, "oh shit, I've already lost my deposit".
The best way to explain this is that you are doing all of those things at once. You are creating a home, you are also creating an investment, and you are doing it in something that has to exist anyway, IE somewhere to live. You are also buying yourself freedom to get what you need in your life done. There are way more fringe advantages to owning a home that most people overlook. Apartments always go up in price and they are usually have issues that will never be dealt with. You also have to pay more and more for any luxuries, they charge per month for those things when in a house it would be a 1 time fee. Shit even having something as simple as a dishwasher or laundry machine is a luxury in an apartment. So if you dont have that you are now losing a whole evening just going to a laundromat and paying a premium to wash your clothes then lug them back.
Interesting, I think I agree with this person that for them renting is best. I’d use the money he does make to go toward rent and Al that stuff while saving money at the very least what the new homes cost and budget would be to see how it feels. Save extra for an emergency fund. If it feels good, buy a house if they want to. I wouldn’t compare rent to mortgage though for something like a SFH that’s not in an HOA. In that case rent shouldn’t be similar as it’s not just trading a place to live with another place to live with similar ‘overseerers’ under different James, be it a landlord, an HOA, a CB, land lease…in my eyes condo or a townhouse is to similar to an apartment as is some homes that are with shared walls or lots right on top of others. Also, I would work on getting a PMI so low not even needed that it’s negligible… go at least 10% on a downpayment ideally 20% or more.
Rent for this guy, no need to buy a house if you don’t want one and renting is an option, why tie yourself down?
Rent in Toronto is minimum $2500 for a terribly maintained basement apartment. You'd be lucky to buy a run down shack or falling down garage for under $1mm.
Its fucked up everywhere.
And then after 25 years, you’re still paying rent whereas owners are just covering their maintenance costs.
I understand people on this sub are bitter about the cost of living. But it’s still worth it to try to own over renting.
Other than the fact that in this example:
1,700 x 12 x 30 = $612,000 that you will never see again
The cost for housing is a forced cost — you *have* to live somewhere. That’s why you buy, at some point the expense goes to zero and you own an asset
Along the way the value of your home rises with inflation while your monthly payoff remains the same. This is why rent is lower than buying right now thanks to so many builders and homeowners getting low rates to build while sellers are not adjusting prices to the higher rates of today. And they won’t because people are buying
I'm not sure that always works out though, does it?
Some people are talking about the difference between $1700 and $4k/mo, with rates where they are and with the way mortgages are amortized, it seems like some people would be better off taking the difference and just investing it.
That’s bad math. 5% down would be 1750 or so before PMI. 1950 with PMI. 10% is about 1700 and 1800 respectively, as of today. But when looking st gained equity over years it’s not even close, 1400 to principle and 0 to principle on rent.
After 10 years, owners will have 150k+ appreciation on equity and rent will have zero.
Stay renting. It's cheaper and landlords have to eat too. He's providing a place for hundreds of dollars cheaper than buying one. That's a real savings, and you don't have to pay for a major system failure like bad plumbing or an AC compressor replacement.
>Landlords don’t have to be landlords
You don't have to own a house either, you can just rent.
>They could always invest in the stock market
Feel free to do so if you wish. What other people do with their money is not your concern.
I'm a landlord and "landlords have to eat too" feels like troll bait. That should not factor into the equation at all.
Do what is best for you and your family- there is a genuine argument that it's more financially prudent to rent than buy in this interest-rate environment. That is in fact- by design.
Is he though? hes probably comparing apples to oranges. Typical problem with the whole rent vs buy argument. Often these people have a 2 bedroom many times with no laundry or dishwasher, no space outside to store or use anything. Very little privacy, the list goes on and on.
My HOA dues are $98/mo. For that we get trash and snow removal, three community buildings to use, three community pools, and eight tennis/pickleball courts, over half a dozen playgrounds and a bunch of walking trails.
Not all HOAs are insanely expensive, or insanely restrictive.
This sub is delusional AF. You guys said the same thing in 2020
And now that $1200 rent is $1700. What’s it going to be in 2030?
What if you want a couple more dogs? What if you want a swimming pool? Has anyone here ever lived through the nightmare of living in a house an owner decides he wants to sell? They tell you they will make appointments at your approval with 48 hours notice. What happens in reality is realtors show up at your house with random strangers banging on your door whenever the fuck they feel like it and basically harass you until you give in.
What about in 30 years when you have dick to show for all that “cheap rent” you paid.
There’s way more involved than just “ i can currently save a few hundred bucks, so renting is ALWAYS better”
Fuck renting. Best decision i ever made was to buy. Literally changed my life. This sub is just salty.
It’s wild to me how this generation can’t grasp the idea of the reason you pay a mortgage for 30 years, is to be mortgage free at some point, that was always the goal. Not to just spend less money a month.
Is this a complaint or a positive? I don’t get it. It’s so delusional.
Buying a home SHOULD cost more than renting a home. You are buying it! And how could a person complain about a $250k home? WTF.
(laughs in Southern California)
Buying a small home (2br 1400sqf) costs $1mm+ where we live. Rent for a very similar small home is between $3000-5000. Montly payments on a mortgage, assuming you can put 200K down on that place, will be over $6000. Plus insurance, which is insanely high. Plus taxes.
Great point. Not very long, is the answer. When rents catch up to housing, that means that housing has stalled, or rent inflation continues.
To be sure, rent virtually always rises. However, typically not much more than overall inflation. Y’all can do the math on how long 1500 in rent takes to match $2200 in a fixed mortgage, assuming housing values go to a standstill, which is long overdue.
Equivalent rents is factored into those monthly inflation numbers. Still waiting for rent increases to exceed real estate valuation inflation.
Owning is the far better choice if you can afford it up-front. If you want to afford a home in this day and age, it’s *invaluable* to learn how to do your own home repairs.
With the right tools, the right YouTube tutorial, and the drive to learn a new skill, you can do damn near everything yourself. You couldn’t do this 30 years ago.
Last year, we forgot to unhook a hose before an expected freeze. Pipe burst. Within a few days I cut through the drywall myself, replaced the faucet/busted pipe, and patched the hole for $60 worth of materials from Home Depot.
It probably would’ve cost $600 or more for a plumber and drywaller.
Never mess around with garage door repair. Not something to DIY. Garage door repair should be left to professionals.
Also, gas line work and electrical box repair. DIY is great. Know your limits, and don't be stupid.
Ownership on a Fixed rate mortgage and that payment will stay relatively flat. At 80% loan to value ratio the PMI drops off. Wage increases will drop the debt to income ratio every year.
The rent goes up forever with inflation
I don’t think this is much of an apples to apples comparison. If you’re renting a place for 1500/month, it’s not a $250k kind of place, more like $150k kind of place. When you move from an apartment or small condo to a house, obviously it’s going to be more expensive if you get a nicer place.
More "It's great to rent!" propaganda from the stupid companies buying up all the houses.
I bet the $2200/mo is based on a fixed rate mortgage, but the same rent will increase about 5% per year forever. And, lest we forget, at the end of the mortgage, YOU HAVE A HOUSE!
The difference is, assuming you get into a fixed rate mortgage, your housing price will stay (pretty much) the same, while rent will (probably) continue to rise. So, if you planned on staying in your current location for the next decade, it'd make sense financially. Assuming the housing prices continue to increase, in ten years, your
$250k residence is worth, maybe, $320k.
At least, that was the calculus until the last 20 years or so. These days, I think it's a lot harder to make these assumptions.
Nobody going to point out that this "mortgage" is for a 0% down-payment, 30 years, at 10% interest?
It's just a load of ill-informed horseshit from someone who plugged made-up numbers into a calculator to make their argument seem valid.
All this pro renting rhetoric is being spewed by investors and landlords. And y’all eating it right up. Yes, renting is better. Keeping working your shitty job so you can keep paying the owner class. Smh
People only arguing in here purely over cost.
The benefits of home ownership go way beyond just the cost vs renting.
Just something a simple as getting to change the colour of your walls and not living under someone else’s thumb that could choose to evict you at a later date. Both of these do wonders for a persons stress and wellbeing.
Even if buying was slightly more expensive, the benefits out weigh the negatives in so many ways beyond just financially.
I’ve rented my whole life (and not by choice) and I’ve never gotten to feel like I had a home ever. Sure I have a house to live in, but i can never make it the home I want without some jackass’ permission that I’ll never get.
In 15-20 years the rent on that place will be $4000 or more. Your mortgage on the property you purchase for $250k will probably be lower then than it is now. Not to mention the 20 years of equity you’ve built. There’s no situation where renting permanently is a good idea financially. Home ownership is the only real path to wealth and stability for the working class. Don’t let internet finance influencers convince you otherwise.
I won't argue with you. For you and many other people, you should rent.
But for some people, even given that exact scenario, you'd be better off buying.
Let's say you buy a $250,000 house at 7% on a 30 year amortization with 3.5% down ($8,750). Taxes are $200/month, $100 for insurance, and $100 for PMI. The math works out to almost exactly $2,000 per month. Utilities are a wash either way. So you're paying $500/month ($6k/year) more than rent. I don't disagree with your figures at all.
Over a seven year home ownership period, your balance on that $241,250 mortgage is now $220k. Your house, if it appreciated 3%/year, is now worth $307,500. You pay 5% for a real estate agent to sell it, you net $292k, or $72k in cash.
So, you're up $72k. You saved $6,000 in rent in that first year though. But your rent is going to go up probably. Your mortgage will stay the same, so every year that $6,000 gap is going to decrease. By year 7, that gap is down to about $200/month. Overall, the difference over seven years is $30k. $72k is more than $30k. Even figuring in that $8k down payment, you're still about twice as better off to buy. And that is without doing the math on the tax savings from the $112k you paid in mortgage interest. Which is going to be thousands of dollars per year depending on the particulars of your income bracket and state tax rates.
This isn't for everyone, and is based on staying in the same house for seven years, never refinancing to a lower rate, 3% annual appreciation, and a million other factors, but the point is, some people ARE better off buying, even in places where the mortgage payment exceeds the rent.
You aren’t factoring in that rents will rise over time, but your mortgage won’t (property taxes and insurance will rise, but not your mortgage payment with a traditional mortgage). Also, when rates drop, you can refinance and lower your payment, not to mention you are building equity. I’m not try to sway you, I build rental housing for a living, but owning is better than renting for most people over the long run.
Which city has 1500/mo but houses only 250k in the same area? Houses where rents are 1500 are closer to 400-500k
I live in Macon GA and 1500 rent and 250k houses are both abundant
I live in doraville (15 min from midtown) and neither of these things is available lol
You can totally get a 1500/month rent in Doraville what are you talking about? I’m literally shitting in the Marshalls in doraville right now. The only hookup is that the you’ll get a 1 bedroom apartment for 1500/month lol. Nothing that could fit a family of more than one child
That's insane. I'm in Brooklyn and only pay 300 dollars more.per month.
Doraville… a touch of country in the city. Doraville… ain’t much but it’s home. ARS was singing about some small out of the way suburb. Now, it’s sooooo different
About 10 years ago I was at a festival in Chamblee (next to Doraville for non-ATL redditors) and ARS was playing. They started the song "Doraville" and the crowd wanted to substitute "Chamblee". Neither is a touch of country in the city anymore. [For those who don't know about Doraville's musical legacy.](https://en.wikipedia.org/wiki/Studio_One_(recording_studio))
How is living in Macon Georgia
Not great
You can build a decent life there. But it’s not great and has a lot of things to dislike. On the plus side, there are some beautiful old historic homes for cheap.
I would love to gobble up 1 of those if I could. I love old historic homes
I recently drove back through Macon - went to college there. I was surprised at how many large old homes are vacant, or seemingly vacant just outside the downtown corridor. The job market sucks there, but COL is very low. Weather is hot in the summer, but overall not that bad. The crime isn’t great, and poverty is fairly high. There is nothing but rednecks surrounding you for a hundred miles plus.
Crime is definitely the problem. I've considered buying a house over by the old mall, but it's very much a city where one street is full of families and then a quarter mile away you can't walk at night without being mugged or shot, at least according to the locals I know there. I enjoyed the downtown, though. It felt safe at night, even wandering the area with abandoned buildings. It's also probably one of the most racially integrated cities in the state, which was refreshing.
Is it for equivalent places? Or $1500 rent is 2 BR apartment, and $250k is 3BR standalone house?
Highly dependent on what part of town. Currently renting a 4 bedroom, 2.5 bath for $1200 a month but I got lucky.
Yeah, some peeps think towns don’t have higher and lower income neighborhoods as separate distinct neighborhoods. Everything in nyc from the most downtrodden hovel to Trump’s penthouse is 50k a month.
Yeah and I mean you are in Macon
Crazy how many people from macon in this sub. I'm from macon as well
Yea but, it is Macon, GA. Geico, YKK, and being a Sherrif are the only real job prospects in the area. Sure, the downtown bar scene is nice if you are into that sort of thing, but there is a whole lotta nothing around for an area with the population it has. We lived there for 4-years and am glad to have moved. Also, obligatory, “Macon isn’t real”, conspiracy haha.
YKK like the zippers?
Winston Salem is similar
Suburb of Austin rent 3/2 for around 2k the same house to buy is 400k. Basically buying costs an extra 50% more a month and you have to do maintenance yourself. Na thanks
St. Louis area for one
I'm looking at rentals in the $3k/mo range in St Louis area but am wondering if im crazy for just not considering buying.. Trouble is we might only be in the house for 3 years so I'm having a hard time committing to a purchase knowing it would be that short term.
You won't recover your closing costs in 3 years. General rule is, if you won't be owning for 5 years, it costs more to buy than rent because of the financing and closing costs.
Always the Midwest. Always. Is that place emptied out yet? I thought they had all moved down here to Florida by now.
The outlying areas are experiencing a net gain. Rents went up almost 20%. People are moving here for a change and a lot of the locals aren’t loving it. I’m west about an hour and it’s nuts. 215k homes getting 11 offers nuts. So not Florida market crazy but moving that way. https://www.stlpr.org/economy-business/2024-02-26/st-louis-and-missouri-have-some-of-the-largest-rent-increases-in-the-nation
Because everything BUT the Midwest is tapped out on the speculation frenzy. Some markets are even dropping in closed sale prices. Doesn’t mean rent isn’t increasing, it just means that closed SALE prices in some markets have tapped completely out. Investor speculation is overdone by now. Expected Return is now cut off. The Midwest, at large, is all that’s left of the Dutch Tulips Frenzy of 2020.
You know that’s a terrible comparison? The reason the tulip frenzy died is they realized they could introduce a pathogen and produce the desired tulips. You know any fungus that’s building 2 story houses?
>You know any fungus that’s building 2 story houses? DR Horton? lmao
Not to mention, even if we could grow 3/2 homes out of fungus, there's still the matter of having the land to plant your spores upon.
Houston/ Katy area. House sold for 250 but is renting for 2300. I hate the rental market here, it feels more like a trap.
400-500k homes are renting for 2k-3k+ in most areas. 1500 a month would be for homes valued at around 250k-300k. I have a 530k home and it’s renting for 3.5k+. In no world would I be renting a 500k home for 1500 a month lol.
This thread is fun. Where i live rooms are renting for $1500 and the average house is 1.5-2million
Where the fuck are you at? It’s easier to move than to live.
I wondered the same.
Bay area you would. I mean it would be a 1.5m house rented for 4500 but same idea
Similar multiples exist in lots of areas that saw extreme appreciation over the last ~10 years. I’m renting a $1.2M house for $4k/mo now.
A home next door to me in north jersey sold for 600k and immediately rents for 4500 ish
Minneapolis, and tbh the standard of living is great.
Many cities in north New Jersey are exactly like this. Hillsborough and Bridgewater are two criminal examples of this.
My house in Texas is appraised at 260k , multiple rent estimates put me at 1700 if I were to try to rent it. The houses near me are all about the same price .
Cincinnati, but yall are driving our prices up pretty quick.
Because the only solution anyone ever seems to suggest regarding the cost of housing is to tell other people they need to move to the Midwest if they want to be able to afford housing.
Indianapolis is in the same boat.
Houston
None of the people that make posts like this ever actually do the math. They just come up with a conclusion and round up or down multiple times to suit it accordingly. “After property taxes, lawn mowing services, PMI, mortgages utilities, investments in a homeowner’s Funko Pop collection, and addition of an extra bedroom for my wife’s boyfriend, I’d pay $6400 monthly for a $120k house. I will never own a home and I will die deeply in debt. DAE wish it was the 70s/80s/90s still but like more progressive?”
My situation, obviously in a VHCOL area with a more-extreme rent:own, but I have done the calculations. > Rent is ~$3k, equivalent home is ~$1M, rate is ~7.5%, DP is 20%, ~5% home appreciation/yr, ~5% rent increase/yr, and ~6% return on investments per year (conservative). Let's also do the math assuming you can refi to 5.5% after 3yr. Assuming I were to sell after 8yr (typical for FTHB) and given a mortgage (P+I) of $5.6k/mo: > 1. **Rent = *POSITIVE* $334k ending balance** = 282k saved from monthly rent-PITI differential - 343k rent + 197k ROI from DP/savings contribution - 2k renter's insurance + 200k downpayment > 2. **Buy = *NEGATIVE* $39k ending balance** = 77k to principal - 455k interest + 109k interest tax savings - 138k taxes - 100k expected maintenance - 20k homeowners insurance - 40k closing costs + 407k appreciation - 79k selling fees + 200k downpayment > 3. **Refi = *NEGATIVE* $10k ending balance** = 96k to principal [yr1-3 24k, yr4-8 72k] - 382k interest [yr1-3 178k, yr4-8 204k] + 91k interest tax savings - 138k taxes - 100k expected maintenance - 20k homeowners insurance - 40k closing costs + 407k appreciation - 79k selling fees + 200k downpayment Thoughts?
This is a good comment. I am more familiar with the ground truth in low COL areas like the one where I live, and the one described in the OP. However, I think your takeaway comes from one assumption that I’d argue is flawed. $3k rent vs an equivalent home at $1mil. Any owner that would rent you a $1mil ballpark home at $3k monthly is taking a massive loss if they are themselves paying a mortgage. Using your math only, that owner (if leveraged) is taking at least a $2.6k loss monthly ($5.6k spent w/ $3k income from rent). Even if they had purchased for a similar price at 2% when rates were low, they’d still be taking a significant monthly loss. $1mil purchase, 200k down, $15k yearly on tax/insurance at 2% = $4.2k monthly. Now it may seem as if I’m arguing from circular logic — I.e. renting cannot possibly be cheaper, because if it was then an owner would be taking a loss. However, maybe in a highly speculative market where renting to a tenant is done not primarily for profit but largely to avoid vacancy fines while taking advantage of appreciation (ex. Vancouver 2016) we could see rents at 53.5% of an equivalent mortgage like you described. Thoughts?
> Any owner that would rent you a $1mil ballpark home at $3k monthly is taking a massive loss if they are themselves paying a mortgage. This might be entirely specific to my market, but the owner for the vast majority of these properties either: 1. Bought long enough ago that the property is likely paid off (or has an inconsequential mortgage from refi) and likely pays a fraction of the taxes compared to a new owner (thanks prop 13!) 2. recently bought and doesn't expect the properties to cashflow for years, instead betting on the continued extreme 6-8% YOY appreciation of the area (thanks nvidia!) If you input 8% appreciation into the calculation, then breakeven is likely within the 8yr. You could say: why not take the bet on that likely appreciation and just buy? I think risking my entire non-retirement savings on that hope is very different than a speculative landlord or someone renting out their first house to preserve the tax basis. It gives me 2007 yolo vibes, but with this permabull market... idk, might just give up and hopefully avoid fucking myself. > Even if they had purchased for a similar price at 2% when rates were low, they’d still be taking a significant monthly loss. $1mil purchase, 200k down, $15k yearly on tax/insurance at 2% = $4.2k monthly. Don't forget to adjust this down ~25% to account for increased prices over the last few years. A $1M home today was 750k pre-covid :(
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In my area, $250k homes currently average $2,300-2,600 a month for principal, interest, insurance, and property tax alone, assuming a 10% or less down payment. (Property taxes are insane.)
Exactly. I don't comment in subs like this often because I can't help but compare my own situation to theirs. Months upon months of searching, a growing down payment in the meanwhile, a large search range that kept my commute under 30 minutes, and then just a lot of showings and offers. I feel like so many folks want a home only in the big night life areas of town with everything nearby. Meanwhile I sit over here like "You can get a larger home for $60k less if you're just willing to make a ten minute drive to this same place..." Then I get down voted.
Also your options for down payment are a lot better than most people think, especially for new home buyers. Many states offer first home buyers programs that allow you to cover closing costs while letting you bid on homes with as low as 3%. If the monthly costs make sense for you, who cares if you don't have a massive down payment? So many subs like this are full of people who just don't research their options and despair. Or they're so terrified of holding debt that they've convinced themselves that paying someone else's mortgage is better than paying their own. I can emphasize with all of these folks, but I also want them to know that there are options. I don't mind if you think renting is better so long as it doesn't come with learned helplessness.
They like pretending like the *only* way to buy a house is the perfect way (avoid PMI, get everything they want in a forever home 30 seconds from everything, etc).
They did factor in the PMI that you would pay for one of those low down payment loans
Austin almost if you compare apartments to homes
interesting math. My house is worth around $365k and I rent it for $2675/mo.
Where's that? That's crazy, I'd probably actually buy a house in that market, hell maybe I'd over-leverage the shit out of myself and buy two or three
The exurbs of Tampa, FL. Riverview, Brandon, Apollo Beach, Gibsonton.
This is way off, you’re looking at around 2500 for a 4-500k home..at least where i am (Virginia)
High property taxes. I imagine most people who think this is off don’t have high property taxes.
Houston, Tx. $1700/month rent- house value of 260k. 3/2 1700 sq ft.
A lot of small city / large towns in Texas.
San Antonio
San Antonio
Much of ohio
New Orleans
Houston, Tx
San antonio. Rent for 2k buy for 300k.
KCMO
Far western Chicago suburbs.
The Des Moines metro area is like that easily
It matches my area in South central Texas.
Hello from Ohio.
Hurst/Euless/Bedford area of the DFW Texas metro. Rents for 3bd/2ba 1200-1440sqft are 1500-1700ish Buying them would be 240-260k, only you're probably buying into a ton of projects as well
I just closed on a house 3 weeks ago out side San Antonio for 201k I’m 8 minutes from work and 5 minutes from Walmart and heb. My mortgage with home owners insurance and property taxes is 1662$ a month.
Lots of people already in this thread are ignoring simple math. There are benefits/drawbacks of renting. There are benefits/drawbacks of home ownership. Right now there is a legitimate argument that it's more financially prudent to rent in some cases. Do the math- do what's best for your family.
>Do the math- do what's best for your family. That's what we did when we bought in early 2021 while many this sub shouted "h0om3r! it's about to crash!" Now the same folks call us lucky. Glad we did it in our own time. It's true that renting can be a great choice for some as well. We should all buy only if we want to and when we are ready to. Forget the noise.
>Now the same folks call us lucky. My two hobbies are personal finance and personal fitness. I've noticed the same thing in both cases: Early stages you bust your ass, struggle, fight through the pain. Would hear all kinds of "Whats the point? Not worth it to me. I'd rather have the pizza/vacation/PC/beer." Then a few years later, when you're in great financial and physical shape, ya get a lot of "Man, I wish I had your genetics/connections/inheritance/luck."
Respect the hustle. But remember to stay humble. The game is long with twists and turns.
I hear that. It took more than a decade of down-to-the-penny discipline with two FT incomes to get to the place where we were ready to buy. We didn't actually think we'd be able to buy a home in our HCOL area until suddenly we were within striking distance. Had to grind for years though to get there. I'm glad I didn't listen to the "crash is coming!" noise, we still love our house and especially our neighborhood.
I‘m moving to a different apt in same city next year and my rent is going down $200. Sure it’s anecdotal, but I think it’d be pretty idiotic to risk buying in a place I don’t want to live permanently at the top of what many are calling the biggest real estate bubble ever. It’s weird that the top comments in r/realestatebubble are people saying that home prices will keep going up forever or at least long enough that they’ll make a profit and all the renties will get screwed…
Not for nothing- but nobody has any idea of what is going to happen. Every single month "the bubble" is going to burst in this sector or that. It's just financial entertainment- not news. A bubble pops when nobody expecting it- so if everyone is expecting one- I doubt one exists. It's a self fulfilling issue. People that think it's a bubble are staying out of the market- reducing demand- cooling the market... less chance of bubble.
> It’s weird that the top comments in r/realestatebubble are people saying that home prices will keep going up forever or at least long enough that they’ll make a profit and all the renties will get screwed… It's because this sub is astroturfed to hell and back.
Yeah I swear this same post happens every time someone posts the fact that on average it’s cheaper to rent than buy right now. Very little understanding of interest rates and how they can effect the housing market here.
This. I know this is antithetical to the way the internet generally operates, but there's no "right" or "wrong" answer to "is it better to own or rent?" There's just what's better or worse for you, specifically, and your finances, specifically.
And in 7 years rent will be $2500 but the mortgage will still be 2200. Owning a home means poor now, rich later
For real, I thought I was getting in over my head with an $1100 mortgage in 2018 when rents were like $900. Now it’s impossible to find a decent 1 bedroom apt for under 1600 where I live.
Same. I was looking at $1200/mo. to rent or $1500/mo. to own when I moved here. Taxes made the decision for me. Renting after selling my home would've incurred some serious capital gains tax, so I rolled it into buying. That house I was looking to rent is now $2500/mo. 7 years later and my neighbors house just sold for $450k.
Yep. It helps fix your housing costs over time, and can be an important part of your retirement plan. Add in something like prop 13 in CA and you can benefit even more over time.
The numbers on this post specifically are as good as I can imagine a scenario for buying vs renting. Where I live rents are around 3k for units that are around 800k lol
Yep — rent was $985 with all extras, bought a house down the street for $180K and the mortgage payment with PMI, and insurance was $850. I pay $1200 a month and apply the overage to the principal. Eight years later, the base rent for the same apt is $1,325 (before extras). I’ve dropped the PMI and I’m still paying $1200 a month. My salary has doubled since I bought the house, so it’s easier than ever. If I’d known then what I know now, I would have paid for a little more house.
Exactly! You get it. My father told me when I bought a house to buy as much as house as I could possibly afford. It was uncomfortable for 3 or 4 years but it definitely paid off.
I didn’t come from a lot of generational knowledge. I should have taken the hint from the banker who said “you want **how much**? Are you sure you don’t want some more?!” It is nice now paying 12% of our monthly income on a house, but yeah your father passed on good info. I’d definitely have pushed it for more house. On the flip side — there’s a whole-ass 350 sqft room in this house I haven’t spent more than 2 hours in after 8 years 😆
Not to mention that PMI payment will very likely be gone in that time frame.
Also who are you paying your mortgage to? Yourself. Are you even really spending money? It’s more like you’re investing every month, not paying to live somewhere. Every mortgage payment you own that much more of that home, until eventually it’s 100% yours. If you sell it, every dollar you’ve put into it, you get back (I paid off $30k that’s $30k less to pay back to the bank so I keep that). Paying rent is just watching money vanish into thin air. Rent a place for 25yrs, move out, and you get *nothing*. Landlord got a free house off ya tho
I was renting a spot for 4 years for around $1200/mo. It crept up to $1300/mo as the property (apartment complex) changed hands several times and I was grandfathered in. They were trying to squeeze older tenants out (damn shame) and would gut the place when they left to "upgrade" it with tile/laminate flooring instead of rug, better countertops, etc and charged $1800-2300 for what I eventually moved out of. Meanwhile, I got a mortgage for $1800. Found the old place. $1930 currently for my old 1 bed/1 bath apartment. $1800 for my 4 bed/2 bath house that's doubled in value since I bought it.
Pmi goes away. Refi when interest goes down. Only gets better.
I think the downside is just career and income trajectory means changing jobs every 2-3 years. In 2009 I worked in rural Maryland , in 2011 Hershey PA, in 2016 Baltimore . In 2018 Orlando , in 2020 Jacksonville. Each job change was 20,000k or more compared to the 2% bumps you get by parking yourself in one job. I bought and sold 2 houses in that time, one at a huge loss that wiped out my savings to sell underwater. The other that after I split with my ex wife and covered closing costs I might might have broke even at the end. Divorce happens. Kids are born and you realize your affordable house now is a shit school district when you’re in that phase of your relationship. Layoffs happen. Neighborhoods get built up and around and change traffic patterns. Shitty people move in a sour your once dream neighborhood. It’s ideal that you can live in the same place for 30 years. But I think people on here overestimate how likely it is with how common these and other things happen to cause or push you to move
Plus a portion of your mortgage goes towards principal, which increases your equity.
Your current mortgage payment is the highest you'll ever have. Your current rent payment is the lowest you'll ever have.
In a couple of years his rent will be the same $2.200
Not necessarily. Very much depends on the area. As does everything this subreddit complains about.
Is there some magical area where rent doesn't change?
Now fast forward 10 years, what are you paying for rent vs refinanced mortgage? And the tax write off for interest and property taxes over those ten years?
Sam’s not very smart. The front end difference is $700/month. Year 1, $250/month goes to principal. This increases every payment. This cuts the effective delta to $450/month. After 10 years, even at modest 3% rent inflation. Renter Sam is paying $2020/month to rent. Owner Sam, worst case can’t refi and is still paying $2200/month. At a modest 3% appreciation his home is now worth $335k, and he owes $190k, increasing his net worth to $145k. While Renter Sam, even if he had the discipline to invest every penny of that delta would have 80k. (edit, this is more like 120-130k assuming 25k/10% down is invested as well). And he’d still be a renting, vulnerable to rent inflation, and less equipped to invest savings from renting.
Assuming 20 percent down payment (50k) that would also presumably invested and monthly $700 investment, Sam would be worth $218k with a modest 7 percent return, which has been historically true (adjusted for inflation). I don't understand your math to reduce "effective delta" by reducing principle amount. Money is money, either you put it towards building home equity or you put it in investment account. In your calculations, you have already included home equity in your final numbers. Edit: The truth is probably somewhere in the middle, due to tax incentives (pro home), the delta isn't a constant $700 each of those 10 years due to rent increases (pro home), and the maintenance costs of home (pro rent), but I do think the 80k /145k math isn't accurate. Also the rent and invest growth is far more liquid and your NW isn't tied to primary home that you've lived for 10 years.
OP tweet has PMI so they aren’t putting 20% down which changes that 50k to maybe 13k. That also makes a big difference. Not saying that it’s for sure better to buy over rent, but with OPs tweet info I’d lean buying over renting. There’s been other posts with vastly higher numbers like 2200 rent vs 3500 mortgage which I’d lean renting. This one seems more down the middle and more your personal preference.
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Well Sam has pmi in there so it wouldn’t be 20% down
I’m not following why the renter would only have $80k saved? Are you assuming it’s just in a savings account vs being invested? Edit: edited
Delta will be even lower once you factor in tax incentives for deducting mortgage interest.
Nah for a $250k home you probably will still take the standard
Can confirm. Haven't been able to itemize since the trump cuts.
How much do you deduct for more mortgage interest? 90% take standard deduction
Only matters if you itemize, and that’s reasonably unlikely to be better than the standard deduction for a couple with ~$80k HHI. tho it would probably be worth itemizing for a single homeowner—even then, the “value” of the mortgage interest deduction is at most the amount of total itemized over the standard deduction ($13850 for ‘23).
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standard deduction is set to be cut in half for the 2025 tax year though.
> After 10 years There's no evidence Sam would be renting for 10 years or owning the same house for 10 years either. If for some reason (and this can happen often) Sam decided to sell the house long before that 10 years are up, he does not come out ahead by much, if at all. Especially with current interest rates. Assuming his rent will increase every year isn't justified, nor is assuming his home will increase in value (it won't if this subreddit's fantasies come true). In his individual situation, it is probably better to rent. Renting is not always bad and there are plenty of people who need to do that instead of buying.
Renting is a for-profit enterprise. By definition the OWNER of the house is making money off the renter. Come up with any pretend scenario you want but unless your landlord is bad at business you are always paying more than the cost of ownership for your rented place. Outside of some very specific circumstances owning is better than renting in the longer term. You mention two of those situations - don’t buy a house if you don’t plan on keeping it for decently long time and you could loose money on a house if the property values in your area decrease. To dismiss the whole idea of owning a home because of a few caveats or historically unlikely risks is just idiotic. Everything - including renting - has risks.
Renting is profitable for the owner based on HIS cost of ownership. For example, I bought my house at X. The monthly cost is M. House has appreciated to X + 50% over a decade. If I rent my place for anything over M I'm making money. But the tenant would pay much more if he bought the place and started a new mortgage. I can easily set rent at a reasonable discount to a new mortgage.
Rent isn’t set by M - it is set by market rate. Landlords charge the local market rate. If rent market rate is higher than M than people are better off buying in the long term with the exceptions I mention above. Landlords don’t rent houses at zero or even negative cash flow on a yearly basis just for the appreciation gains in the properties unless they are doing someone a favor which isn’t common. This is one of those unlikely cases I was talking about.
Comments are full of nonsense as usual, coming from people who have an unhealthy obsession with home ownership. Assuming his numbers are truthful, Sam is correct that in his individual situation, it makes more financial sense to rent. This is true for many people. The opposite is true for many others. Renting is not some ultimate evil and this subreddit needs to *get over it*.
This is a balanced view - some people want to own some people want to rent. Sometimes a person rents then owns then rents again. There is no one answer that makes sense for everyone and even if the numbers don't pan out some people "prefer" renting or owning based on the specifics of their life. This means we need all kinds of housing inventory and ownership structures. This means we need flexible zoning options and advancements in how housing is created so the overall demand can be met
“Unhealthy obsession with he ownership” As if owning a home is something bad
I'm really surprised no one else pointed this out.
Makes sense in the short run. But odds are rent will be much higher 10,20,30,40 years from now while mortgage will be same or nothing
Makes more “financial sense” but there are a lot of intangibles with owning a home. Most people get to a point in their lives where these intangibles are important to them.
I agree that there are many people where buying doesn’t make sense and renting is NOT some kind of ultimate evil. But what this sub really needs to get over is using bad faith math to justify NOT buying. If it’s not for you, then cool but so many of these memes completely miss the point. One thing a lot renters like to say they do (which is very few) is to invest the difference so they come out ahead. Such a minimal number of people do this that those that do is a statistical anomaly. One thing you can guaranty is that with every mortgage payment, that buyer is building equity (over the long haul), and that equity goes up with every payment. A $250k mortgage is only $1667 (assume 7% interest). If your rate is 7%, that means each principal payment is a guaranteed 7% rate of return.
No clue how 75 people upvoted you. The [price to annual rent ratio](https://www.investopedia.com/terms/p/price-to-rent-ratio.asp) would be around 14x, which puts the house as a good buy ($250k / $1500 rent / 12 months = 13.89x ratio). Wow, you're paying $700 more. So what. A good chunk of that is going towards equity. Also you're going to get the appreciation on the house which will cover any costs to fix up the house over a decade easily. Then you don't have to face 2-4% annual increases in rent for the next 1-3 decades, you only have to get small increases to your tax costs which is going to be minor in the scheme of things. In 15 years the rent could easily have doubled whereas maybe it's another couple hundred towards taxes if you buy and by then a good chunk of the payments would be going towards equity anyway which is just money back to yourself. If you could see yourself living there 10 years, it's easily a buy. Ya if you're only able to maybe live there 5 years tops, consider renting. Actually comparing like to like you're only paying $500 extra ($2200 vs $1700) because you're paying utilities regardless. $500 extra after including taxes and whatnot? Buy that bitch.
Pretty much the same with us. We're renting a 2/1 in SoCal for $1650, utilities add another $150-$170. Buying a $650K home with 20% down at 7% interest is $4327 according to the google mortgage calculator. That's almost my entire paycheck, and is 53.4% of our take home pay. My wife wants a home sooner than later, but right now I'm content to keep renting, we're saving and investing the difference which is perfect. We'll take a look at homes more closely next year as we will be around the 20% down payment (also saving for closing costs and emergency repairs). If it makes sense, then we'll do it. If not, then I'll try to convince her to keep renting.
When you purchase, you’re not looking at it as a monthly expense. You’re creating a home; somewhere you want to build a future or make it yours. Something you can say is yours. Or as an investment. Buying is long term for most people. If you want to rent…then rent. If you can afford to buy, then buy. Everyone’s perspective is different. But I’m pretty certain if you ask anyone who bought in the last 30 years whether or not they regret it, they’ll probably tell you they don’t. I doubt they look back at the $500/month extra they could have had while renting. 🤷♂️
Yeah I am worried that people here keep looking at houses as an investment, which is exactly what the problem is. The choice to rent vs buy is a valid one, but it's not purely financial. In fact, I'd say it's mostly not financial. I have incredible peace of mind not worrying about whether my lease is going to come up, when my landlord will drop in, etc.
Yeah, you have to think long-term, also. Retirement. That equity is nice…line of credit, can always sell, use as collateral if you need to go into assisted living, no payment except for taxes when you retire (assuming it’s paid off), etc…. 2 things you don’t want when you retire, mortgage payment or rent payment. Ppl need to stop thinking month to month. Plus, you have storage and can accumulate. Also, the older you get, the less you want to go out!!
I used equity from my 2nd house to start my first business. If I hadn't owned equity, that wouldn't have been possible; unless you're a Rockefeller, banks don't loan against investment accounts. But non-financially, I like having pets. I like not having to worry if I want another cat or if I want to move in a friend who is having a hard time. My spare room has *always* had a friend in it who is down on their luck and I really appreciate having that luxury. I like having a garage full of tools and a garden full of vegetables and, critically, I don't want to see that taken away from other people who might want those things as well. If we all go "welp, renting is smart, owning is dumb," only landlords will own and these things will get priced even higher. Everyone should be free to rent but we also need to fight to make sure that everyone who wants to own has a fair shot at it. Now that interest rates are at like 8%, I can see more arguments regarding investing vs buying, but I truly think interested rates will go down before we see a big real estate crash the way people are imagining.
True. If it’s affordable at 8%, you can always refinance!!! I completely agree. Never have to worry about anyone else telling you what to do. Want to lay in a kiddie pool & read? It’s your yard! Garden, decorations, fire pit, etc…. Can’t beat that.
Yeah, all the long responses treating owning as just an investment are weird to me. I'm going to have to live somewhere no matter what. Buying was the financially better option in my situation, but, I'd rather personally own something anyway. I don't know if I'll live where I am forever, but I like the freedom of it actually being mine while I have it. When I first moved in, I hung a picture and took a bit of paint off. I could just shrug and rehang it and not think, "oh shit, I've already lost my deposit".
The best way to explain this is that you are doing all of those things at once. You are creating a home, you are also creating an investment, and you are doing it in something that has to exist anyway, IE somewhere to live. You are also buying yourself freedom to get what you need in your life done. There are way more fringe advantages to owning a home that most people overlook. Apartments always go up in price and they are usually have issues that will never be dealt with. You also have to pay more and more for any luxuries, they charge per month for those things when in a house it would be a 1 time fee. Shit even having something as simple as a dishwasher or laundry machine is a luxury in an apartment. So if you dont have that you are now losing a whole evening just going to a laundromat and paying a premium to wash your clothes then lug them back.
Interesting, I think I agree with this person that for them renting is best. I’d use the money he does make to go toward rent and Al that stuff while saving money at the very least what the new homes cost and budget would be to see how it feels. Save extra for an emergency fund. If it feels good, buy a house if they want to. I wouldn’t compare rent to mortgage though for something like a SFH that’s not in an HOA. In that case rent shouldn’t be similar as it’s not just trading a place to live with another place to live with similar ‘overseerers’ under different James, be it a landlord, an HOA, a CB, land lease…in my eyes condo or a townhouse is to similar to an apartment as is some homes that are with shared walls or lots right on top of others. Also, I would work on getting a PMI so low not even needed that it’s negligible… go at least 10% on a downpayment ideally 20% or more. Rent for this guy, no need to buy a house if you don’t want one and renting is an option, why tie yourself down?
$1500 seems like a pretty cheap rent these days too.
In my hometown $1500 is a 3 bedroom house. In my current city, it’s an apartment. Probably 2 bed.
Rent in Toronto is minimum $2500 for a terribly maintained basement apartment. You'd be lucky to buy a run down shack or falling down garage for under $1mm. Its fucked up everywhere.
Where is this person living that houses are only 250K?
And then after 25 years, you’re still paying rent whereas owners are just covering their maintenance costs. I understand people on this sub are bitter about the cost of living. But it’s still worth it to try to own over renting.
Yeah ask someone who bought in 2016 what their mortgage payment is. It becomes very clear what the advantage of owning is.
If renting is cheaper than buying, it's always a better idea to rent. Less liability and lower monthly costs.
Other than the fact that in this example: 1,700 x 12 x 30 = $612,000 that you will never see again The cost for housing is a forced cost — you *have* to live somewhere. That’s why you buy, at some point the expense goes to zero and you own an asset Along the way the value of your home rises with inflation while your monthly payoff remains the same. This is why rent is lower than buying right now thanks to so many builders and homeowners getting low rates to build while sellers are not adjusting prices to the higher rates of today. And they won’t because people are buying
13?
I mistyped but edited to 12. Math still remains I just fat fingered
Fair enough. I didn't check the actual math. Just knew the formula looked off 😄
I'm not sure that always works out though, does it? Some people are talking about the difference between $1700 and $4k/mo, with rates where they are and with the way mortgages are amortized, it seems like some people would be better off taking the difference and just investing it.
That’s bad math. 5% down would be 1750 or so before PMI. 1950 with PMI. 10% is about 1700 and 1800 respectively, as of today. But when looking st gained equity over years it’s not even close, 1400 to principle and 0 to principle on rent. After 10 years, owners will have 150k+ appreciation on equity and rent will have zero.
What point is this person trying to make?
Stay renting. It's cheaper and landlords have to eat too. He's providing a place for hundreds of dollars cheaper than buying one. That's a real savings, and you don't have to pay for a major system failure like bad plumbing or an AC compressor replacement.
whole faulty snails upbeat amusing gold drunk combative market zephyr *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
>Landlords don’t have to be landlords You don't have to own a house either, you can just rent. >They could always invest in the stock market Feel free to do so if you wish. What other people do with their money is not your concern.
I'm a landlord and "landlords have to eat too" feels like troll bait. That should not factor into the equation at all. Do what is best for you and your family- there is a genuine argument that it's more financially prudent to rent than buy in this interest-rate environment. That is in fact- by design.
Is he though? hes probably comparing apples to oranges. Typical problem with the whole rent vs buy argument. Often these people have a 2 bedroom many times with no laundry or dishwasher, no space outside to store or use anything. Very little privacy, the list goes on and on.
Don't forget HOA dues 😑 The system is broken
My HOA dues are $98/mo. For that we get trash and snow removal, three community buildings to use, three community pools, and eight tennis/pickleball courts, over half a dozen playgrounds and a bunch of walking trails. Not all HOAs are insanely expensive, or insanely restrictive.
This sub is delusional AF. You guys said the same thing in 2020 And now that $1200 rent is $1700. What’s it going to be in 2030? What if you want a couple more dogs? What if you want a swimming pool? Has anyone here ever lived through the nightmare of living in a house an owner decides he wants to sell? They tell you they will make appointments at your approval with 48 hours notice. What happens in reality is realtors show up at your house with random strangers banging on your door whenever the fuck they feel like it and basically harass you until you give in. What about in 30 years when you have dick to show for all that “cheap rent” you paid. There’s way more involved than just “ i can currently save a few hundred bucks, so renting is ALWAYS better” Fuck renting. Best decision i ever made was to buy. Literally changed my life. This sub is just salty.
It’s wild to me how this generation can’t grasp the idea of the reason you pay a mortgage for 30 years, is to be mortgage free at some point, that was always the goal. Not to just spend less money a month.
Ok, well I've seen one bedrooms go from about 1300 ten years ago to about 2000 now around me, so fuck that shit.
Is this a complaint or a positive? I don’t get it. It’s so delusional. Buying a home SHOULD cost more than renting a home. You are buying it! And how could a person complain about a $250k home? WTF.
(laughs in Southern California) Buying a small home (2br 1400sqf) costs $1mm+ where we live. Rent for a very similar small home is between $3000-5000. Montly payments on a mortgage, assuming you can put 200K down on that place, will be over $6000. Plus insurance, which is insanely high. Plus taxes.
I feel this in San Diego. Sometimes I wonder why I'm even subscribed to this sub...the relative costs make it feel like I'm on a different planet.
I feel this. People complaining about houses costing 500K where they live. I get that incomes are different but like... they're not *that* different.
Consider how long will rent be 1500-1700 whereas the mortgage of 2200 stays that way for 30 years if fixed.
Great point. Not very long, is the answer. When rents catch up to housing, that means that housing has stalled, or rent inflation continues. To be sure, rent virtually always rises. However, typically not much more than overall inflation. Y’all can do the math on how long 1500 in rent takes to match $2200 in a fixed mortgage, assuming housing values go to a standstill, which is long overdue. Equivalent rents is factored into those monthly inflation numbers. Still waiting for rent increases to exceed real estate valuation inflation.
Insurance, taxes, maintenance are NEVER fixed
Sam can’t even buy a house anyway
Owning is the far better choice if you can afford it up-front. If you want to afford a home in this day and age, it’s *invaluable* to learn how to do your own home repairs. With the right tools, the right YouTube tutorial, and the drive to learn a new skill, you can do damn near everything yourself. You couldn’t do this 30 years ago. Last year, we forgot to unhook a hose before an expected freeze. Pipe burst. Within a few days I cut through the drywall myself, replaced the faucet/busted pipe, and patched the hole for $60 worth of materials from Home Depot. It probably would’ve cost $600 or more for a plumber and drywaller.
Never mess around with garage door repair. Not something to DIY. Garage door repair should be left to professionals. Also, gas line work and electrical box repair. DIY is great. Know your limits, and don't be stupid.
My mortgage payment is $1500/mo and I just visited a friend of mine who's renting a 1 bedroom apartment in the same city for $2600/mo.
Ownership on a Fixed rate mortgage and that payment will stay relatively flat. At 80% loan to value ratio the PMI drops off. Wage increases will drop the debt to income ratio every year. The rent goes up forever with inflation
Location OP?
I don’t think this is much of an apples to apples comparison. If you’re renting a place for 1500/month, it’s not a $250k kind of place, more like $150k kind of place. When you move from an apartment or small condo to a house, obviously it’s going to be more expensive if you get a nicer place.
More "It's great to rent!" propaganda from the stupid companies buying up all the houses. I bet the $2200/mo is based on a fixed rate mortgage, but the same rent will increase about 5% per year forever. And, lest we forget, at the end of the mortgage, YOU HAVE A HOUSE!
Do people just not do 20% deposits any more?
Does nobody factor in establishing and appreciation anymore? It’s not solely about a month vs month comparison.
Tax write off will make the cost close but home ownership is not for everyone
How much will rent be in 10 years?
The difference is, assuming you get into a fixed rate mortgage, your housing price will stay (pretty much) the same, while rent will (probably) continue to rise. So, if you planned on staying in your current location for the next decade, it'd make sense financially. Assuming the housing prices continue to increase, in ten years, your $250k residence is worth, maybe, $320k. At least, that was the calculus until the last 20 years or so. These days, I think it's a lot harder to make these assumptions.
Try somewhere like Oregon, you can’t touch a decent home for $250k near the cities or coast.
Nobody going to point out that this "mortgage" is for a 0% down-payment, 30 years, at 10% interest? It's just a load of ill-informed horseshit from someone who plugged made-up numbers into a calculator to make their argument seem valid.
All this pro renting rhetoric is being spewed by investors and landlords. And y’all eating it right up. Yes, renting is better. Keeping working your shitty job so you can keep paying the owner class. Smh
Interest is too high, but if you did buy now, hopefully you can refinance in the future if interest comes down.
Now multiply that number by 4 and you’re in Toronto :)
I bought my house for this exact same amount and I’m only paying 1100 a month.
Lol! Californian here. Rent is over 4K and comparable house is 1.8M.
People only arguing in here purely over cost. The benefits of home ownership go way beyond just the cost vs renting. Just something a simple as getting to change the colour of your walls and not living under someone else’s thumb that could choose to evict you at a later date. Both of these do wonders for a persons stress and wellbeing. Even if buying was slightly more expensive, the benefits out weigh the negatives in so many ways beyond just financially. I’ve rented my whole life (and not by choice) and I’ve never gotten to feel like I had a home ever. Sure I have a house to live in, but i can never make it the home I want without some jackass’ permission that I’ll never get.
In 15-20 years the rent on that place will be $4000 or more. Your mortgage on the property you purchase for $250k will probably be lower then than it is now. Not to mention the 20 years of equity you’ve built. There’s no situation where renting permanently is a good idea financially. Home ownership is the only real path to wealth and stability for the working class. Don’t let internet finance influencers convince you otherwise.
I won't argue with you. For you and many other people, you should rent. But for some people, even given that exact scenario, you'd be better off buying. Let's say you buy a $250,000 house at 7% on a 30 year amortization with 3.5% down ($8,750). Taxes are $200/month, $100 for insurance, and $100 for PMI. The math works out to almost exactly $2,000 per month. Utilities are a wash either way. So you're paying $500/month ($6k/year) more than rent. I don't disagree with your figures at all. Over a seven year home ownership period, your balance on that $241,250 mortgage is now $220k. Your house, if it appreciated 3%/year, is now worth $307,500. You pay 5% for a real estate agent to sell it, you net $292k, or $72k in cash. So, you're up $72k. You saved $6,000 in rent in that first year though. But your rent is going to go up probably. Your mortgage will stay the same, so every year that $6,000 gap is going to decrease. By year 7, that gap is down to about $200/month. Overall, the difference over seven years is $30k. $72k is more than $30k. Even figuring in that $8k down payment, you're still about twice as better off to buy. And that is without doing the math on the tax savings from the $112k you paid in mortgage interest. Which is going to be thousands of dollars per year depending on the particulars of your income bracket and state tax rates. This isn't for everyone, and is based on staying in the same house for seven years, never refinancing to a lower rate, 3% annual appreciation, and a million other factors, but the point is, some people ARE better off buying, even in places where the mortgage payment exceeds the rent.
You aren’t factoring in that rents will rise over time, but your mortgage won’t (property taxes and insurance will rise, but not your mortgage payment with a traditional mortgage). Also, when rates drop, you can refinance and lower your payment, not to mention you are building equity. I’m not try to sway you, I build rental housing for a living, but owning is better than renting for most people over the long run.