Quote:
Originally Posted by Mihkel05
You're somewhat out of your depth and making most of this up. Do the math first. You should probably note that the "pessimistic" view of housing is standard. All structures are obviously depreciating assets.
This is as true for the landlord as it is for the homeowner so you still have to justify how the landlord is able to charge you any less, despite having to account for tons of costs that you don't have to deal with as an owner (vacancy, eviction, credit loss, broker fees, incentives, collection, damage, etc) and having a considerably higher cost of capital, both due to investment properties having high mortgage interest rates and landlord types having more opportunities and lower costs for investment than random people. Having a landlord and a tenant be separate people necessarily creates considerably higher costs, which means, in the absence of transaction costs for buying and selling, for renting to come out ahead, being a landlord has to be a massive losing proposition. I guess if you're the worst tenant in the world, you could come out ahead as a renter at the cost of major damage to your credit.
Aside from major declines in housing price and moving frequently, the only other major win for renting comes from simply consuming less housing than you would as an owner. In the US at least, the options are generally offered such that buyers pay more for better housing than renters. I guess if you're an extraordinarily good investor, that could make your personal cost of capital so high as to make the down payment uneconomical, but in that case you're probably loaded and don't want to live in a rental anyway.