Sun 18 Oct, 2020 02:31 pm
One could draw a graph of the market price at which a property or a similar one has sold for over time.
One could then draw a graph of the market rental price (i.e., the rent) at which that property or a similar one has rented for for over time.
I think one would find that the relationship between the two numbers is not steady. At one point in time a property might sell for 100 times its sale price, while at another time the sale price might be 200 the monthly rental.
Based on the fluctuation of this relationship one could find when it is better to rent and when to own.
Am a correct? Has someone developed this thinking?
More and more of my friends retirement age (60's to 70's) are chucking the big house and finding apartments. They want smaller spaces with the master bedroom on the ground floor, but an extra bedroom for guests. Or even studio apartments for the single ones, and forget the guest apartment or hosting Thanksgiving dinner anymore.
So I don't think you are going to get an answer as to when it's best to rent and when it's best to be a homeowner. Too many variables.
I own an apartment in a co-op apartment complex in New York City. There are many other apartments in the same complex with exactly the same floorplan as mine.
I was thinking of selling my apartment and renting as a tenant another apartment with the same floorplan.
The rationale is my belief that the cost to own property is going up while the demand for it is going down.
Either consult a financial adviser or show us the numbers.
It depends where you live and how much real estate appreciates. I live in Southern California and owning your home is definitely smarter over renting. Rents are extremely high, almost higher than a mortgage and you have no assets to show for in the end.