Is renting an inevitable waste of money?

[Findingnemo]

Some of the expert suggest loan a house instead of paying rent so at the end of mortgage period you will be left with an asset but it will not work every where especially you mentioned rent is cheap comparing to mortgage amount so here is what you should do.

Let's assume the house you want to buy has mortgage of 600 dollars per month but the rent for same house is 400 so here is what you should do, just choose rent and think you have to pay mortgage every month which means you have 200 dollars extra and you have to keep investing the amount every month into something with decent returns and low risk as long as you can, so at the end of 10 years you may not own a house but the investment you made all those years along with the compounding effect you will have much more money than the worth of that house.

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[philipma1957]

People take loan for houses, live rest of their lives paying for it. Renting is wiser choice imo. But, if you have means do get a house — you'll have roof to sleep under.

Many people pay the home off you would be surprised.

I have a lot of access to real estate data. In my town ½ the homes are paid off.

[xSkylarx]

Calculate how much you'll be paying on a monthly basis and compare it to your rent; if they are close, then taking a loan is good, but remember that if you lose your source of income, you should immediately find another job. I don't know in what country you are living, but are there any government projects that are rent-to-own? or like they have housing? Try to find such a program on it, though I'm sure it was located in the city, but my best advice is that as long as both you and your girlfriend aren't planning on having a family, achieve your dreams first and get that house, because if you have a family and a child, you'll have difficulty getting it and paying a loan. 

[Chrlie95]

Renting can definitely feel like a waste of money, as you're not building any long-term equity and you're at the mercy of landlords and rental market fluctuations. However, it does offer the flexibility to choose where you want to live in terms of location, city, and even country.

Buying a house can be a great investment, but it's important to consider the lifestyle and privileges that come with it. One option could be to buy a house and rent it out, using the income to pay for your own rent. However, this still requires a significant amount of money upfront and ongoing maintenance and management.

Personally, I prefer to invest my money in other areas and focus on building wealth through those investments. I'm pretty sure that the investment will earn me more money than a house. I was fortunate enough to inherit a house from my parents, and I'm also planning to buy a summerhouse but that's me.

I know I wrote a bit confusing  but in the end, it's up to you and your lifestyle. It's important to consider what works best for you and your individual circumstances.

[Darker45]

If you're the type of guy who could stay in one place, having your own crib is better. Or if you've already reached that stage in life where you want to settle down with your girlfriend, then owning a place is also better. Not to mention that if you do the math, buying is indeed better than renting. I guess those are my bases.

I remembered reading a book about finance or wealth. It says that one way to develop your wealth is to own a house. I couldn't agree more.

To somebody who wants to change environment every now and then, though, owning a place might not be his/her cup of tea. That's probably me. Owning a house is not worth it if you're away for weeks or a month every now and then, or if your work requires you to travel and stay in different places for longer periods of time.

[palle11]

and after spending all this money, you're practically left with nothing and may be subject to looking for a new house at any moment.

Renting is not bad because someone need a place to live and before you think or do anything, this is important but what is bad is to rent an apartment that is beyond your earning income, that is what is bad. If you rent an apartment that you can still eat and make your other expenses balance then you have rented according to the seize of your income but if after you have rented the apartment then you allow other aspect of your financial live to suffer, you have not done a good calculation of your rent expenses. Usually you are suppose to have @least 10% of your income out for rent and not 20% or 30%.

[Plaguedeath]

Renting isn't wasting money!

First you need to calculate how much the house price in your country and how much the price to rent a house. You also need to consider the inflation on your country, renovation,  and calculate the average increasing price of your house and land every year. If the difference amount between the price house and the rent amount/bought it through loan isn't really too far, it's really worth to buy the house through loan or rent the house.

As long as you rent a property or stuff which you really need and useful for your daily life, there's no such wasting money even the price is really high.

[takuma sato]

The question is probably the opposite: is home ownership a waste of money?

Unless you know for a fact that you are going to live on the same spot for the rest of your life, then what's the deal? if you just want to invest in real state, you an invest via REIT index funds. By having to manage homes you lose your time and time is money, not to mention unpredictable costs of maintaining said homes. Sure people will always need homes and im not saying real state isn't a good investment, but I like other alternatives and the freedom that renting gives you in terms of easily moving and changing tax residence if needed without leaving anything behind that may tie you to the previous one.

[The Sceptical Chymist]

If you're young and haven't inherited a property from your ancestors, chances are that you're forced to rent. Personally, I've been renting for over 6 years and have been living with my girlfriend for the last 4, sharing rent and utilities.

I'd like to suggest that at least you're fortunate enough to have a partner that you seem to care about, and renting is definitely a lot easier when you're sharing the bills with one or more roommates.  And I wouldn't feel bad about not owning a house outright--I've been renting all my life and although I generally hate dealing with landlords and leases, when you own a house:

1. You're stuck there, pretty much.  A house is a commitment to living in it for years (usually).
2. Got snow to shovel?  Get your boots on, 'cause nobody's doing it for you.  Same goes for repairs and whatever else that can go wrong with a building.
3. Your heating bill is probably going to be a LOT higher just due to the size difference between a home and an apartment.
4. You pay all sorts of expenses related to your home, ranging from taxes to God knows what else.  Plus the value of it can rise or fall dramatically.  Maybe not like bitcoin, but a house is still an asset with a very big market.

Those are just some of the drawbacks of owning property, and I was never willing to deal with any of them.  But a lot of people do, because there are some real positives about being king of your land, so to speak.

[adaseb]

It depends on your location. There are places where you got no choice but the rent because a house is like $2Million. Then there are other places where a house is $300K and your mortgage would be cheaper than rent. So as long as you live there long enough you would be better off buying.

However this is very dependent on area because in some places like in Canada you got doctors who got no choice but to rent because it’s just so expensive buying a home. We got the worst real estate here in Canada. Hopefully something changes soon with these rate hikes.

[noorman0]

The actual waste depends on the specifications of the apartment you are renting and comparing it to your income. So don't be too idealistic, at least you have to get a place to live with proper equipment according to daily needs.
Also, mortgages can be considered by following the traditions of generations of ancestors. It's not always a bad choice either, especially when you have children.

[Kakmakr]

Well, there are a lot of factors to take into consideration .. if you want to debate this.

1. Maintenance cost - When you own a house, you are liable for the maintenance cost, which will eat into your future profits. When you rent a house, your landlord has to pay for the maintenance of the property.

2. Taxes & fees - In my country, if you own property... you have to pay property taxes ...and this goes up every year. You also have to subtract the fees that you have to pay for refuse removal and water and electricity and/or levies. The person renting the property, just pay the rent... and the owner pay those expenses from that rent.

3. Registration & Sales commission - A owner have to pay registration cost for the new property and also sales commission when he or she sells it. (This can be expensive in many countries... and it is based on the size and value of the property) The person renting ..do not have those expenses.

3. Interest on the Bond - You pay almost double or triple the mortgage amount in interest over the duration of the Bond being paid... so you as the owner ...have to hope that the property prices has increased more than that..to be able to profit from that.  

[aoluain]

There are pluses and minuses in absolutely all cases.
If you want to buy a place:
* you will most probably buy it a bit farther from where you'd work (so you can afford to buy it), meaning you lose a lot of time in commute (no matter if it's car, bus, train or whatever)
* taking a loan is, as you said, something not too easy to take and may need certain advance planning
* even if you buy a place, it won't be like you have no other costs than just paying it back, maintenance and utilities are to be paid
* if you lose your job you may be forced to quick-sell your place, possibly even at a (great) loss
* you may end up - sooner or later - with neighbors you simply don't want to live near them (stinky, noisy, whatever)

On the other hand:
* even if the place is bought with a loan, you can still sell it if your relation doesn't work out or you want to go working in another city or country; though it may worth it selling only after at least 3 years
* the prices for houses/flats tends to go up - actually it's a sinusoidal with higher and higher ups - but it doesn't hurt watching the market and don't buy at top and sell at bottom; still it's usually a good long term investment.

Staying in rented place:
* no need for commitment
* it can be near (or at least not too far from) the work and the fun places
* you have the flexibility to easily go rent somewhere else if you change work or you don't like your neighbors


It's up to you to weight the pluses and the minuses; I' might have even missed some. In theory buying your own place is a great investment; in reality, not all cases/situations are that nice.
However, my analysis is valid for my country. Some points may differ in yours.

Yes I share the same outlook as NF

Taking a loan/mortgage on a house is a massive commitment and probably the biggest
financial decision the average person will make in their lives. While it has a clear advantage
it's also a massive weight on your shoulders to repay that  back every month for over 20 years.

I have a mortgage and have been paying it back for over 15 years and still another 12 to go.

My insights into own a marriage are:
It's a struggle, a big struggle.
I am tied to this place, for the last 15 years I have not been in a position to move because
of negative equity.

Renting gives you a bigger degree of flexibility to move elsewhere, a different country
even.

The way I see it is many people as is their nature overextend their purchasing
of a house to get a loan/mortgage. So many people want simply what they cannot
afford in the long term (I'm also speaking from personal experience!)

The biggest benefit to taking a loan/mortgage is to be able to pass on the house
to sons and daughters.

[Broly46]

Let’s say
Rent car is better or buy car is better? If you rent car you won’t own the car after you had paid x amount.
If I have a choice between paying for a wife and paying for a surrogate for it, I did choose the latter which is cheaper yet I would still get the same result I want, yes... if you get what I mean, you want your own kids but you don’t want to pay full price and own a wife also come with baggage, food for thought

[davis196]

Just try to increase your income and get a mortgage. Renting is a waste or money. I've always thought that renting a place to live is a short term solution and nobody should live in a rented house/apartment for years.
I know that the interest rates are going up and mortgages might become more expensive, but you will have your own house/apartment after 20-30 years. Real estate prices will most likely keep going up forever, which means that your own house/apartment will have good value after 20-30 years.
Try to avoid living in a big city. The houses/apartments are overpriced AF. Find a suburban town or small city with good infrastructure near a big city.

[NeuroticFish]

However, my analysis is valid for my country.

The country with the largest percentage of homeownership in the world?
I guess nobody listens to the cons there, your first wage comes with a mandatory mortgage or how do things work there?  

Actually more and more look for the cons too, plus usually the first wage, by far is not big enough for the bank's liking.
The bank looks for stable job, hence at least 6 months there... the reality is not exactly like the newspapers depict it 

The fact that there are so many homeowners here is (also) caused by the fact that soon after the old regime was abolished, the people was able to buy the flats they were living in, and the prices were extremely low. Else the percentage would look awful, actually.

On the other hand, the prices for the properties are more likely to grow here than in more developed countries, hence it's a better business here to buy.

I am sure that OP can see how my pluses and minuses apply (or not) in his country; I don't feel I was that much biased.

The biggest benefit to taking a loan/mortgage is to be able to pass on the house to sons and daughters.

Well, you can - at least in theory - buy Bitcoin and, at the time the kids are big enough, those Bitcoins may (with some luck) cover the price for a decent house for each and every one of them.
But yes, you do have a valid point; paying a loan for the house is - at least in theory - less risky than bitcoin.

[slapper]

I can relate to your apprehension about securing a mortgage in order to buy a property. It's a significant commitment that calls for much preparation. To be sure, renting is an option, but I believe it's important to weigh the pros of buying a home. As an example, you may rest easy knowing that you won't have to stress out about relocating anytime soon. Also, you're right that after 15-20 years of debt repayment, you'll own your very own home outright. Remember that you can count on having support from those around you while you go through this. If you need assistance navigating the home-buying process, you may turn to a variety of professionals for assistance, including real estate agents and mortgage brokers. These experts can guide you in your search for the ideal house and explain the many credit options available to you.

You brought up a good point; the government does, in fact, provide a new loan scheme that may finance up to 75% of the loan without charging any interest at all. The financial strain of purchasing a home might be reduced by purchasing it with a friend or significant other. It's true that you can't see into the future, but it doesn't mean you shouldn't make preparations. For this reason, it's a good idea to look for real estate in areas with healthy rental markets and proximity to promising employment sectors.

The choice to purchase a home is a significant one, but one that should not be dismissed, particularly in light of the availability of the new financing program. If you want to make a good choice, you need to think things out and have a strategy ready.

[KiaKia]

I moved out of my old rented house to a smaller duplex and I am loving it, I can't afford the payment anymore and its affecting me too much, I just decided to lower my living standard, at least some people do not have a roof over their head, if I can still afford something lower its better and since that time I have been able to at least safe some money.

Sometimes you really need to lower your standard way of living to grow, you may not like it but that's fine, the bad thing about this decision is if your spouse doesn't understand, but mine does. Switching from a 600$ rented house to a 300$ rented house is not bad.

[Chainsmokers]

The actual waste depends on the specifications of the apartment you are renting and comparing it to your income. So don't be too idealistic, at least you have to get a place to live with proper equipment according to daily needs.
Also, mortgages can be considered by following the traditions of generations of ancestors. It's not always a bad choice either, especially when you have children.

You have to be wise in that case so you don't waste it besides adjusting it with income,
the most important thing is worth it and I think it's more than enough,
but it all depends on the decision of each.

[Broly46]

Tbh, owning a house is conventionally not a good investment for a long time ago. But there is one exception, the 2008 was the time house price and loan rate is getting so depressed it’s stupidly "very profitable" to buy house to get rich, it’s unheard of in the entire history of humanity, because many people has to agree a lot of homeowner who survive the 2008 crisis basically achieve financial freedom and officially retired from the rat race permanently! All of them has GMI(going made it in life) after the crashes, while renter and stock investor loss everything, it’s all the very America thing that screw up everything. But this miracle come only every 1000 years I believe, can you expect another miracle of house crisis in the next few years? Nobody know. But with interest rate picking up and every item price soaring, we are witnessing against the pre-2008 market condition again, the mystery of 2008 is still a confusing puzzle even to this day.