Few people stay in their homes for 30 years, but for argument's sake, let's use that as the basis for this opinion.....
Let's assume a home buyer today is considering buying versus renting: many in our world tell them to rent instead for the following reasons:
1. Mobility
2. Freedom not to maintain a property and repair/upgrade over time.
3. Better use of their capital elsewhere.
Many who deliver or fuel the above are landlords who stand to benefit from collecting rent - and raising rents annually - or those who might collect an annual fee managing your money....
Yes, a mortgage payment can be fixed for 30 years, but the argument that home ownership monthly costs are not fixed is 100% true:
1. Real estate taxes rarely go down.
2. Insurance costs rarely (never?) go down.
3. Maintenance and repairs costs money that would be picked up by a landlord.
4. And yes, that $100,000 down payment could be earning 5% interest these days.....which is closer to 2% once you factor in taxes and inflation.....
5. If not held in cash, wisely invested that down payment could be earning higher returns IF - only IF - its wisely and successfully invested.
So, at the end of the day, with all things factored in, the monthly costs of owning versus renting could possibly be equal at the end of 30 years.
BUT THERE IS JUST ONE THING.....
It is the one thing all the pundits, advisors, scandal-for-profit-peddlers, etc fail to mention......building equity.
Yes, after 30 years if the home is fully paid off, you actually own an asset. Will it be worth more than what you paid for it? No-one can be certain. Will it be close to - or equal to - what you paid for it? More than likely, yes. If inflation is just 1% annually, chances are the value of the home will have increased by about 35% over 30 years.....81% if it averages 2%.... THAT'S the one thing the consumer needs to be most educated to. (PS: you might also mention the ANNUAL tax deduction that benefits most who own a home too.....) And each year you don't own equates to the loss of compounding equity growth....
