I would say for 80% of the people out there, owning a home is a better investment than renting.
I hear from these great theologians how owning a house is an expense and not an investment. Well what do you think renting is? Thats an expense too. And guess what, in many areas, its actually cheaper to own than it is to rent.
So why in the world would you not want to own?
Lets say you had 2,000 mo for your residence and investing. And renting a house cost you 1,400/mo. Owning the same house would cost you 1,000/mo - plus you'd get principal paydown, tax writeoffs and appreciation. Plus you'd have an additional 400/mo more to invest in something else.
So why in the world would it make sense to rent there?
Those are actual numbers from one of my typical rentals. PITI is roughly 1,000/mo even though the rents are 1,400/mo. And that PITI is based on roughly 5 to 8k or so out of pocket (hard money lender at 100% purchase and rehab).
Now i understand why they picked the coast for the report. The cost of homes is way out of whack with what most of us in the US are paying and the rents don't come close to what the PITI would be on those homes.
But typically, even those reports tend to be schewed considerably to fit some stupid reporter's claim. i.e. They tell you that homes only went up 3% or 4% a year whereas stocks went up 10%. The difference there though is, again, when it comes to stocks, you're paying 100% of the price. When it comes to real estate, you may only have 10 to 20% down on it.
So if you own a 700k house and it goes up 4%, your return is more than 4% there because your down payment was 70k or 140k or something. 140k to return 28k is not a 3% return, its 20%.
If you really wanted to do a report, go look at what the net worth is of people who rented their entire lives and then compare that to the people that owned their own homes. I would say that if you compared people in same areas with same jobs, the people that owned their own homes ended up with a higher net worth than those that rented their entire lives.
So where is that study? And why can't we see the numbers on the reality of what some of these silly theologians keep professing would be better? Simple. Because its 99.9% of the time going to come out that owners ended up with more net worth.
Again, certain areas, like the coast that might make some sense. Houses that cost 4k a month for PITI but could rent for 2,500, then I'd suggest maybe that works.
But again, try telling that to anyone that bought on the coast in the 80s or 90's and saw their homes go from 200k to 800k in value and their houses are now paid off. They're sitting on 800k nest egg. What do you think the people that rented all those years are sitting on? Their bottoms would be my guess.....
So no, I don't think you can ever convince me that it makes more sense to rent than to buy. Not from a financial standpoint anyway.
The one thing it does allow you to be is mobile. So if you're an individual that likes to move a lot, then I'd say it makes more sense to rent. Other than that, the numbers don't add up if you add them up correctly and don't twist the numbers to suit you (i.e. 3% gain in appreciation is not 3% return).
