Renting vs. Buying (detailed analysis)

Detailed analysis of the rent vs. buy decision.

Category:

Education

Tags:

• finance
• mortgage
• home
• buying
• interest
• model

[SteroidsR4success]

I'm only 16 years old but to be given this knowledge at such a young age, is just simply amazing. This is going to help me out so, so much in life. God bless, thank you Sal, this is amazing.

[bilalownsu]

very helpfull video

[unytcommsys]

@friendly37 It's not just rent. It is cost for keeping the house i.e. repairs, insurance, property taxes, etc. The math changes accordingly.

[srikumarrajesh]

Kool, really good video...

[harisnsiddiqui]

@friendly37 Also remember that the video is not illustrating a Thumb rule but rather a scenario where traditionally renting a house at face value would be cheaper. $1200 rental vs $2000 mortgage.

Also factor in maintenance, insurance, property Tax and inflation. So their is no simply yes or no answer when it comes to buying vs owning but in the scenario and perhaps generally buying would be more costly.

[harisnsiddiqui]

@friendly37 Sal does not own a house and he has made that clear in 2 other vidoes. Offcourse that was in 2008, so not sure if that has changed in the last 3 years.

[PCGamerPortal]

@friendly37 the video taht comes right before this one on the playlist talks about that, when he made the video he did not own a home, he rented it because it was the better choice for him.

[friendly37]

a big question: I just visited your website and see how bill gates helps you to make your non profit organization.

Do you own a home?

if yes please give us another video explaining why is owning is better than renting.

if not i doubt that. please be honest. since you are educating people on how to take good choices and teaching old things in a new way. thank you for your time.

[friendly37]

by the way the neighborhood where i live, the rent is more expensive than paying my monthly mortgage. all american who are rich are owners, all who don't own are mostly poor.

the housing market goes up and down as anything else. i am convinced of being an owner is better. i can even rent some rooms and make some profit.

i know some people who owns a lot of houses and let the renters pay for the mortgages.

if you travel a lot, there is no need to won. thanks

[friendly37]

I am living in a luxury townhouse. i pay $1400 for my monthly mortgage. The house is $190000. so i paid it in full after 30 years it will cost me $504000.

now suppose i rent this townhouse for $1400 monthly. It will cost me the smae amount after 30 years. Now if i rent, i will continue renting after this 30 year period. right.

please tell me now who is the winner.

if companies that lease apartments lose money, do you think you can find a place where to live.

[friendly37]

@hmongpabhmong

[bluefoxicy]

When you deduct your interest, you have to itemize: you lose your standard deduction. So unless you have $17,800/year or more in interest (assume you pay 35% in taxes; lower tax bracket, higher number), you're disadvantaged. That's the break-even tax advantage. At 4.25% that's 4.337% APR, you need a $410,421 house to get a tax advantage.

You really need a financially crippling house before owning is better than renting. Put that money in your 401(k) and savings.