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Originally Posted by David70
We own two houses, primary residence & the house next door which we rent out. Very similar houses but because we have owned the primary residence since 2006, they are paying rent close to double our house payment (includes insurance, property tax) & it will continue to rise. Yes you can potentially make a lot more money in the stock market if you get it right, could also lose a lot more. People are buying houses, renting to others & making money at it.
Any decent landlord has the renters paying for all the expenses you listed, whether property taxes or a new roof, difference is landlord takes in money each month & needs to budget for potential expenses. Renter just pays the payment which continues to go up.
As for owning a house long term over renting, I am assured that I will soon not be paying for the house, increases can only consist of property taxes/insurance/maintenance. The house next doors renters will continue to see rent increases (that the market will allow) that are based on the value of the house/insurance/maintenance/property taxes. Their payments will likely increase a lot more than mine.
I personally would work towards buying a house, maybe only a decent investment but also comes with the security of being unlikely to be priced out of an area in the future & an end goal of paying off the house and the total cost to live there per year dropping like a rock.
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As I mentioned, it's all based on individual circumstances. While rent can and does increase, so does the other expenses I mentioned. My neighbors had their HVAC systems replaced for $7k and $14k respectively. If you're unlucky with having to come out of pocket for a new roof, that's another expense. I got a rough estimate for the replacement of my roof and it came in at around $17k for just architectural shingles. Look at how insurance rates have sky rocketed in Florida. You have instances of homeowners having to pay $6k+ per year on insurance. I would wager that rent increases generally won't exceed those aforementioned costs.
Many of the home maintenance/repairs I can do myself. So I'm fortunate with that. I was staring at possibly replacing my french door/bottom freezer refrigerator at one point to the tune of $2k but was able to repair the ice maker, water dispenser, and the constantly iced over evaporator coil myself. I got lucky that a friend works as a HVAC/plumber tech. He hooked me up with his contractor's discount at his supplier and only charged me nominal labor to totally replace my aged out HVAC system. I only had to pay $5100 all in for an upgraded HVAC system in both BTU and tonnage over my old one.
Something else not mentioned when comparing putting money into a home or investing. Dollar cost averaging with investing can actually accelerate the compounding we're all talking about. This comes into play when you are disciplined in constantly putting money into the market. Markets will dip or correct which creates a value/everything is on sale situation. This allows one to buy more shares at discounted prices which then accelerates the compounding effect when the markets go up. You don't have that with a home. If you're really a savvy investor, you would have cash on hand to buy more when the market dips/corrects.