discuss Rent vs owning

[Oshawott]

There is a huge economic ideaology debate going on in the personal finance market.

Which is better - is it to own a house or always live in a rented place and using the amount you would have paid as a EMI to your house loan as a good investing capital?

To me, the best option is to live in a rented house and use the remaining amount of what I would have paid to a bank for EMI to invest in a mutual fund and gain the returns.

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The reasons, I shall put in later after I know what are the opinions floating around.

 

[Harsh World]

It depends on the market to rent vs. own now.

If you got a mortgage in the 2-3% range in 2016-2020, you're loving life as you're most likely not only getting paid more, but you're paying drastically less than you would be in rent now vs. the fixed-rate mortgage you locked in back then. Hundreds, if not thousands less, as interest peaked around 7%.

With renting, unless you have a sub-lease clause, you can't build equity and then choose to move somewhere else with your received rental income paying for your new rental or new home if you take another mortgage.

As for me, no bank would give me a loan in Japan, so I was stuck paying rent for what I thought would be the rest of my life. But, I won a court case and the settlement was enough to pay for my house in full, which today would cost about 25% more if I hadn't purchased it then.

Now that I own it, I can rent it out when the kids move out, downsizing to an apartment the size we could only afford at that time, and pocket the rest to use on miscellaneous things. However, in Japan, the phrase "home is where the heart is" is almost literal as you need a family house for most cultural practices.

So, if I do move, it will be into a new house with this house's rental income being used as a source of income (in Japan) to get me the mortgage I need, and then settle there. Then, hopefully, after the 30 years are up, I'll own two homes and can give one to each kid after I pass. If not own a second house by then, have enough paid down where the mortgage payments will be drastically less than any (probably even a 1 bedroom studio) rental would be.

The benefit of purchasing the house in full was that I could

use the remaining amount of what I would have paid to a bank for EMI to invest in a mutual fund and gain the returns.

...and the projected fund will be around $1.5-$2m by the time I turn 67 as I am putting all of my previous rent payments into it.

With the uncertainty of the future value of money, it didn't make sense to make 6-10% returns on the money when housing is going up much quicker.

 

[Apsara]

Owning a house provides stability and equity growth but requires maintenance and long-term commitment. Renting offers flexibility, and investing the saved amount can potentially yield higher returns. The decision depends on personal goals, financial discipline, and whether you prefer control or flexibility in your finances. I would prefer to own because I will have somewhat secured old age

 

[Fidelia1]

The best thing is to own a house of your own. My friend left a rented apartment to live in a church so as to focus on building his own. Within two years, he was able to gather money to buy a land and build a house for himself