When I run the numbers I always get renting to better than buying financially
We recently had a group of friends over, and the discussion turned to the poor, stupid people who had rented long term. All of them have become quite wealthy in real estate; none of them have done well in stocks. They all know real estate well, and are intimidated by the stock market.
I reminded them of the 2008 slaughter, and they just said “it always comes right back”. I finally did get them to agree that they may be right for our area, but not as a rule.
In four states, California, Oregon (my state), Washington and Hawaii, every single city saw appreciation above the 100% national average, some as high as 200% I guess there is something in the water of the Pacific.
In five other states, Michigan, Ohio, Indiana, Illinois, and Wisconsin, every city saw appreciation below the national average, ranging from 95% in the popular college town of Madison, Wisc., to depreciation in Flint Michigan. (I know there is something in the water out there)
I have no idea what the next 20 years will bring, but this discussion really is very sensitive to location.
Some people “do well” or “do better” in real estate than stocks because they literally aren’t able to sell in the downturns. Their behavior of buying/selling stocks is atrocious thus the outcome.
I’ve been managing my wife’s retirement account for nearly 45 years. She has about 300 stocks, not one has ever been voluntarily sold. She has a lot of money in her retirement from putting in $3000 per year up to $12000, but none added for many years now. Many millions.
Nothing special about her account or my “performance” and such.
I must be really lucky! I had a landlord when I was in my thirties who let me go 6 months without paying rent! Why? I don’t know. She kept saying don’t worry about it.
Another one, we moved into a sweet little house on the bluffs of an oceanside village, was city-managed on the lip of a canyon. I could see the ocean from my front yard. Didn’t raise the rent in 12 years. That man retired and the next person doubled it in 30 days!
We moved to this duplex several blocks away, small but very sweet with yards on three sides, a huge fireplace, built in the 40’s. Been here 17 years. The rent was raised like three times? Hasn’t been raised in at least five years.
Landlord fixes most things, but we improve the place. We built a barbecue area. Just pavers on sand, and contributed to the patio in another yard. The landlord is around once every weekend, which I’ve gotten used to. He loves our yard, so he waters the main yard. I do the others. And together we figure out where the plants will go.
We are severely under market, maybe 1/3 of the going rate for this place. So it will take a lot to beat the one we’re in. It’s worth 2 million plus, and we’re within walking distance to ocean, mountains, shopping, pharmacy and hardware store, not to mention some of the best food in the area. So hard to move unless we find something really amazing. Like somewhere else close by. I know the area