Renting vs. Buying a home
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Uploaded by khanacademy on Mar 15, 2008
The math of renting vs. buying a home. Challenging the notion that it is always better to buy.
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You are right in your calculations.. But only because america is fucked and property prices went with it. Subsequently there is no way in hell you would be able to buy a rent a million dollar house for that price anywhere else.
In this economy however it would be far more clever to buy a property that you can invest in, fix up and sell for a fairly significant profit. Shouldnt be hard to find at all in todays market.
Janusha 1 day ago
hmmmm RENTING in my town costs 1500$ a month, BUYING a bigger and nicer house costs 100k$. for a 30 year mortgage, thats less per year even with interest than half a year renting. so this renting is better than buying may not work in all markets. now if you were to pay 1500 a month, you could pay off the house (which is nicer than the rental) in like 6-8 years (depending on your interest rate). but i guess its a little different than silicon valley
squiggyflop 2 days ago
@thejasonalex1 "DON'T PAY 20 YEARS RENTING TO NOT OWN IT"
A good point that a lot of people missed. One of the biggest considerations when deciding rent vs. buy is how long you anticipate living there. The guy states at the beginning of the video that he's renting right now because he expects the housing market to improve. Renting for the next few years while you wait for a better conditions is not the same as renting the same place for decades without ever attempting ownership.
SeauxG00d 5 days ago
I would just assume that this example is empirical when it comes to comparing renting/ownership scenarios in the same area (say, urban rent and urban ownership/non-urban ownership and non-urban renting). If you compared urban renting with non-urban ownership, would the same pro-renting scenario still occur? I am just wondering. There has to be some cases where home ownership is somewhat a better deal (cashflow wise) than renting?
DinkerTinker1 6 days ago
Love ya... You just made my day
abdulfattahahmad89 1 week ago
@lolnonamesleft Good point, however with cheap rented homes comes higher risk for crime in the neighborhood. Just something to consider I guess
arjunaram 2 weeks ago
nice video, one details, that was on 2008 when you can have saving at 3% but now the max you can find is 0.9%.
agredo 2 weeks ago
great vid......but if i had 250k i would just buy a 100k+ house. Good explanation however
meezee44 2 weeks ago 2
@R0YB0T IT IS THE SAME WORDS WROTE, IN CAPS OR NOT. POINT IS, AND THIS IS MY LAST DEBATE ABOUT IT......IF YOU WANT TO BUY A HOUSE.....BUY IT...DON'T PAY 20 YEARS RENTING TO NOT OWN IT....IF YOU CAN NOT AFFORD A HOUSE, THEN SAVE UNTIL YOU CAN....BUYING A HOUSE WITH CASH IS GOING TO SAVE YOU THOUSANDS OF DOLLARS VS GETTING A LOAN TO BUY A HOUSE THEN PAYING ON THE LOAN FOR 20 YEARS. IN INTEREST ALONE ON A $100K HOME, YOU WILL PAY $140K. NO WAY YOU WILL SEE A RETURN IS YOU SOLD AFTER THAT.
thejasonalex1 1 month ago