Let's Talk about Housing by the Numbers

Alright Veeky Forums usually when a thread about housing comes around it's about when the right time to move out of mom's basement is. Well I'm turning 25 in a month and my parents are getting pretty annoyed so that day is today.
Not really, but I'd like to have a thread that's not about crypto.

So my premise is that the majority of the time one person does not come out ahead by owning a house as opposed to renting, after playing around with a bunch of calculators online. My location is in a metro area that's in-line with the average nationwide prices, and I believe this is the case for the vast majority of the US with the exception of the few hottest most inflated meme markets.

If you take a single person, who only needs one bed and one bathroom, it appears to be cheaper to simply rent that in an apartment complex indefinitely, rather than buying a full single detached home. Not only does it save on the numerous fees associated with buying and selling property, it also frees up money you would have spent on mortgage and down-payment to be invested into stuff that's had a much higher return throughout history.

You might respond that you can also rent out the rooms you don't need, meaning being a live-in landlord. Apart from that setup meaning you have to actually be a landlord and deal with tenants, making a profit is not necessarily guaranteed, and you could just as easily move into an apartment with roommates to offset the cost of rent.

The other savings from ownership comes in the form of government subsidy (this incentive turns out to be critical in driving home sales) with the mortgage interest deduction. What I don't get about this is that in order to exceed the $6300 standard deduction at the current rates, you'd have to pay something like over $160k a year? Sure enough, there are tons of articles claiming the deduction benefits mainly the wealthiest who actually do pay that much on a mortgage.

So Veeky Forums? Should I just rent forever?

continue working and investing, rent a room/studio somewhere as cheap as possible while still clean and livable, build your financial base, buy property when you don't have to dump more than half your net worth on a down payment.

Currently a down payment on an average home would be about 20% of my net worth. I don't see why I ever should do that though. All that money can go into a three-fund portfolio and outperform the value of a house over the long term by a huge margin.

no fuck you and your shitty bitbean threads bump

>and you could just as easily move into an apartment with roommates to offset the cost of rent.

When you get older you won't want to live with roommates forever.

At that point, the difference between buying and renting is equity.

It might be "cheaper" to rent, but you are essentially giving a big chunk of your pay check to someone else (either a landlord or complex), whereas if you were to a house those mortgage payments would be going towards your own investment.

You can't sell an apartment and get your money back, but you can sell your home and get your money back.

Also, for an FHA loan you only need 3.5% of the purchase price for a down payment.

If you qualify, you can also use a down payment assistance program and not pay anything down... but you still need reserves for closing costs, moving costs, earnest money, etc.

THis.

Another reason this is great, is if you choose to rent it out you can utilise the tax breaks

I moved out before I was 18
What's your excuse

wtf? shoten this shit Im not reading this blog

whats your point

This shit will vary depending on the real-estate prices in your area, but here's what worked for me:

1. Find a condominium (it's basically an apartment, but you buy it instead of renting) that's going for a price that, when taking into account mortgage payments, property tax, condominium insurance (basically cheap-ass renter's insurance under a different name), HOA/management fees, and whatever other services rent would usually include, is still cheaper than renting a comparable unit per month.
2. Buy that shit.
3. Pay yourself rent (mortgage equity) until it's paid off, because let's face it, you're going to be paying someone rent, so it might as well be you.
4. Invest the money you saved by buying a condo rather than renting it from someone else who's paying exactly what you are monthly on their unit but also adds a profit margin on top of that to the rent cost.
5. When you have enough money/ambition to buy a house (not mortgage, buy), sell your condo for cash equity money or rent it out to financial illiterates and become the landlord for a nice profit stream.

There's no such thing as free lunch you nigger. If that condo was such a good deal then why didn't some giant property management company buy it and rent it out themselves?

I don't want roommates now or ever. That is a counterpoint to the idea that you can rent out the unused bedrooms in a house to make up for having to pay more on the mortgage.

I moved out at 18 also
it was shit
how's that?

the point is that I can rent forever and come out in the long run with more money because a 1BR 1BA apartment is cheaper than a full house and you can invest the money you save into other things

if your mortgage payment is $1200 but rent is $800, the $400 you save each month in addition to the $30k down payment invested in something else will bring you a much higher return than the appreciation in the value of you house

and also FHA loans seem to be a terrible option if you can afford to avoid it, PMI drops off a traditional loan after you put 20% down, FHA mortgage insurance is there for the entire life of the loan

you talk about giving your pay check to someone else, mortgage insurance/PMI is literally throwing your money in the trash

Because you were watching the listings and outbid them as soon as you saw it come up.

Nah I have better things to do than stalk Zillow all day.

Townhomes and condos seem to be the worst financially of all options. on top of the standard down payment and mortgage, you are stuck with HOA fees that are anywhere (currently in my area) from $250 to $500 per month, and are subject to increase at any time. This basically means that it is just rent. You have to pay a mortgage and rent at the same time.

If you're okay with spending years in a place, and adding up your rent and getting a 5 or even 6 digit figure, then yeah keep renting. I rented from age 24-32, a cheap 1 bedroom apt. for between $325 and $425/mo (they raised rates periodically) and one day I'd given them $30,000. I never wanted to bring girls home to my ghetto box, it was too gross. For the next year I lived with a "friend" who is now just a coworker because I got to know him too well, then I bought a 5 bedroom house in a good neighborhood and also got a promotion and raise at work. For two years after that, I rented one bedroom out to a student (I live in a college town) and the first one was good, an awesome mexican girl who kept my kitchen spotless. The second one was some engineering student from Illinois, and man that guy was a piece of work. No more roommates, fuck that shit. I have my brother living here now and that's it, and I have the same amount of money since cutting down how often I get pizza delivered. Bottom line is it's up to you, if renting works better for you then do it. If you want the privacy of your own wooden box that doesn't share walls with someone else's wooden box, you better also have time for chores.

>This basically means that it is just rent.
That's not exactly accurate. Depending on the community HOA fees pay for things like basic utilities, trash collection, snow plowing, landscaping, INSURANCE, re-roofing, and so forth that a homeowner would still need to budget for. There is some overhead that goes to the management company, but it's definitely not rent. And again, in some markets the combined cost of HOA fees and mortgage are still cheaper than a rent payment.

My HOA fees are $20/mo, it covers snowplowing in the winter and some lawn mowing on the drainage ditch for the neighborhood. The association is nice and toothless, if you get behind on fees all they can do is withhold written approval for you to do construction projects. I don't think you get in any trouble for defying them though.

HOA fees for single detached homes are much lower, but in that case they tell you what you can and can't do with your house/yard/shed etc.

with the exception of utilities, all of those are typically rolled into the cost of renting from an apartment complex, that is literally rent

>all of those are typically rolled into the cost of renting
Sure, but that's not what rent is. Rent is paying someone else to live on their property. Saying HOA fees are literally rent is as retarded as saying that a single-family homeowner paying Waste Management to take his trash is literally rent. Yes, that's one thing that a rent payment will typically cover, but it's what rent actually is.

>it was shit
But were you throwing house parties and racing minibikes in your backyard every weekend?

I mean it is essentially the same from a financial standpoint

you are funding the organization that maintains your complex and they may make a profit

>but did you even attempt to make your life absolute hell??