On the "Renting is Cheaper than Owning" Meme

or, put another way, on the "buying is cheaper than owning" meme.

You do get flexibility and freedom, but what if you have kids? Flexibility and freedom are not what it takes to have a family.

Oh - people with kids can't rent?

You do get flexibility and freedom, but what if you have kids? Flexibility and freedom are not what it takes to have a family.

What the hell are you talking about?

Yes, they can rent, but you don't get stability unless you are in Rent Stabilized or Rent Controlled. Otherwise your family is subject to the whim of the market, potential big increases or a landlord who just chooses not to renew.

"In really expensive cities, such as New York and San Francisco, renting is so much cheaper that it's tough to make the case for becoming a homeowner. Buying in these markets often means settling for a much worse property or an awful commute, compared with what you can afford if you continue to rent."

People say this like it was always so...It usually wasn't so before 1999. Cheap and easy credit made it that way and now that cheap and easy credit is gone.

I don't really understand how this is even an argument. In order to break even with our monthly rental cost, we would need to purchase a move-in ready classic 6 in prime UWS for under $900k (closer to $850k). It just isn't an option.

Most don't debate that prices are out of whack with rents. A $900k classic six is 1999-2000 price and we may see it again in a year or two.

It is obviously cheaper to rent than to buy in a normal market. That is the rational dynamic.
A comparable rent for $900k would be around the $4500 range.

"I don't really understand how this is even an argument. In order to break even with our monthly rental cost, we would need to purchase a move-in ready classic 6 in prime UWS for under $900k (closer to $850k). It just isn't an option."

and nor will it ever be.

Bold absolutes, from a man who argued it couldn't fall this much, or even after it did, that it had at all. Owning is normally cheaper than renting. 2004-2008 was a bubble. Only fools continue to defend it as a normal state.

From the man who denies actual price and rent numbers from 1995 and 2000 that show he is wrong.

You have no support here. Do you get that?

So many people over time have offered their examples from the 90s (as late as 2003) to support my assertions and you charge on like a moron with Alpo in the sidecar.

"It is obviously cheaper to rent than to buy in a normal market. That is the rational dynamic.
A comparable rent for $900k would be around the $4500 range"

Yet more unsubstantiated garbage from LICComment.

Do you think LICC believes the crap that comes out of his own mouth?

It is only cheaper if you do not look at it as an investment. Some key facts everyone is leaving out are the tax incentives and principal accumulation you get from owning. Let's ignore the fact for now of the losses you would have incurred if you purchased in the past few years. But if you buy in a normal market (like now or the near future), you get to write off all of your interest payments and your property tax payments from your income taxes. In addition, your monthly mortgage payment includes principal - each month, you own more and more of your apartment. Once you eventually sell it, you typically get that money back (and in many cases, a lot more due to appreciation). But when you rent, it is money out the door - no tax benefits, and no principal accumulation. I agree that there are often times when it makes more sense to rent than buy (such as the past 5 years), but most of the time it does not. Who made out better - the people who bought a classic six in 1992 (after the last bubble), or the people who have been renting since that time? Those that purchased back then can get more than twice the money they spent. For the renters, the money they spent is gone forever.

"It is obviously cheaper to rent than to buy in a normal market."

It is quite the opposite: in a "normal" market, any CAPITALIST requires a RETURN ON INVESTMENT. So unless your idea of "normal" is Socialist/Communist, there better be some ROI.

"It is only cheaper if you do not look at it as an investment."

i.e., if you look at it as a dairy product.

"you get to write off all of your interest payments and your property tax payments from your income taxes"

i.e., it doesn't matter how much you pay, because you can write off your interest and property tax payments. In fact, the more you pay, the more you get to write off!! That's why paying more is GREAT!

"For the renters, the money they spent is gone forever."

But for the buyers, the interest and maintenance they pay stays around forever. Oh yeah, in someone else's pocket!

Where do these idiots come from?

I THINK LANDLORDS IN NYC DO QUITE WELL. SO THE IDEA THAT RENTING IS BETTER THAN OWNING MEANS THE LANDLORDS ARE DUMB. REALLY??
IF YOU ARE AT THE POKER TABLE AND DON'T KNOW WHO THE SUCKER IS, IT IS you