yeah that's a decent point, it's completely possible to amass the same amount of equity in a different asset class and use the proceeds from that asset to pay your rent. That's approximately the same as being mortgage free & having the taxes & maintenance covered...
You do get less freedoms as a renter though. Like I've never had the option to choose any kind of paint, tile, carpet, on demand water heater, reverse osmosis water line etc etc.
> it's completely possible to amass the same amount of equity in a different asset class and use the proceeds from that asset to pay your rent.
It sounds like a Fat FIRE concept that is out of reach of most people. Or at least something the average person would only be able to access later in life.
> You do get less freedoms as a renter though.
But you also aren't responsible for all the things that can break. And natural disasters.
I have heard of many renters painting their apartments.
> It sounds like a Fat FIRE concept that is out of reach of most people. Or at least something the average person would only be able to access later in life.
It's not that far off the amount sunk into a equity+interest view of a mortgage ... eg a $500K house would be about $1M after interest. A $1M portfolio would provide about $2500-3300 a month in passive inflation proof income[1]. A quick rule of thumb is a place should rent annually for about 1/19th - 1/20th the purchase price which conveniently is about ~2200 a month...
So overall if someone could afford to buy, they likely could also afford to choose a portfolio and a reasonable rent.
[1]: we'll have to wait and see how true this remains through the kind of inflation we're seeing lately though...
> I have heard of many renters painting their apartments.
Yes, but they likely either were renting a place that had terrible paint (doing their land lord a favor) or had to return it to the original colors at the end of the lease, else face "repair" costs
But you get other freedoms, like being able to move without having to go through the pain and cost of selling you house. That being said, I do agree that "all things being equal", it's better to own than rent; but there are certainly cases where renting makes more sense.
Plus I don't think all landlords are evil. I've had a number of them that were fantastic people; more than the number of bad ones I've had.
You do get less freedoms as a renter though. Like I've never had the option to choose any kind of paint, tile, carpet, on demand water heater, reverse osmosis water line etc etc.