When you see, between 2009 and 2020, the price to buy being lower than the price to rent, I think that is due to artificially low interest rates. What that graph doesn’t show is that buying a house is an investment. Money spent on rent is gone forever. Money spent on your own home, less interest, builds principal. You won’t see it until you sell but it’s still there. Historically, homes have gone up in value. Even if you buy at one of the peaks, it still has gone up if you own the home long enough.
But then you have to consider the yearly property taxes, the cost of maintenance and just general upkeep, the cost of improvements people make to the home and land, the increased cost in utilities and furnishings and such, and then the realtor’s commission when you sell it. It “can” be a great investment but for a large percentage of folks it’s really just a major money suck.
We paid X for our home in 2005. We sold it for the same in 2020. But the almost 200k in property taxes spent over that time, the 40k in realto’s commission when we sold, the 100k in maintenance and improvements, etc? Gone like the wind.
When you see, between 2009 and 2020, the price to buy being lower than the price to rent, I think that is due to artificially low interest rates. What that graph doesn’t show is that buying a house is an investment. Money spent on rent is gone forever. Money spent on your own home, less interest, builds principal. You won’t see it until you sell but it’s still there. Historically, homes have gone up in value. Even if you buy at one of the peaks, it still has gone up if you own the home long enough.
But then you have to consider the yearly property taxes, the cost of maintenance and just general upkeep, the cost of improvements people make to the home and land, the increased cost in utilities and furnishings and such, and then the realtor’s commission when you sell it. It “can” be a great investment but for a large percentage of folks it’s really just a major money suck.
We paid X for our home in 2005. We sold it for the same in 2020. But the almost 200k in property taxes spent over that time, the 40k in realto’s commission when we sold, the 100k in maintenance and improvements, etc? Gone like the wind.
True. In Kansas City, some people's taxes doubled this year!!!!!