Owning vs Renting

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Owning versus renting (Score:4, Insightful)

by sjbe (173966) on Monday December 24, @02:17PM (#21808458)

If I had a “chance” at owning a house, I’d be paying 1200$ a month for a mortgage and taxes. How is that better? I’d rather have the extra 700$ a month to myself so I can invest it.

When owning is “better” it’s better because you own an asset (the house) which can appreciate in value. A house is an investment, not much different from owning stock in a company or holding a government bond and a house is usually the biggest investment most people make. A house can, and historically usually does, appreciate in value over time by a few percent per year. At least in the US (not so sure about other countries) owning a house has benefits from a taxation standpoint. You can get a significant “return” on your investment through reduced taxes. Generally speaking, owning is better than renting in the long term (greater than 10 years) for most people.

In your case if there really is a $700 difference, renting is only better if you can get a better return on your investment through other investment vehicles (stocks, etc) than you would through the appreciation of the value of the house and any tax offsets. You might be absolutely right for your particular circumstances. Owning is not always better than renting just like renting is not always better than owning. Just depends on the particulars of the situation and the investment alternatives available to you.

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