Buy or rent?

[misoandpickles]

I'm 44 and looking at an 8mil property.

Rough calculation based on 6man rent shows reaching 8mil of expenses in about 12 years. Assuming I'll need 3mil to tear the house down eventually, I'd need about 17 years of mortgage payment/savings to reach the necessary amount. Of course maintenance and property tax too.

Is buying still a clear choice with these figures or are there significant benefits to renting that would make paying rent past 17 years a good choice?

[jcc]

The biggest benefit to renting has always been, and still is mobility.

If you intend to be in the house for the rest of your life, it will be cheaper. But if you end up wanting to move in 5-10, you're open to loss depending on the fortunes of the housing market. Lots of intermediaries taking money in between from the real estate agents, loan fees, taxes and the like.

Mobility can have significant value for switching jobs or careers. Of course you can switch to renting the place if you do move, but management costs, repair costs, taxes and low tenancy rates can result in it just bleeding money.

[Roger101]

Another thing to consider is, if it is a good location (as in close to a train station etc) it could be an investment, again ... assuming you intend to stay for more than a few years, ... no one can say for sure but you should get a decent amount of your money back and maybe a little extra (??)
I mean paying rent ... all your money is gone so .....
That's what I did, I bought a place near good shops and very convenient to schools and transport, I know I will get good money for it when I sell

[RetireJapan]

Of course you can switch to renting the place if you do move, but management costs, repair costs, taxes and low tenancy rates can result in it just bleeding money.

Most mortgages won't let you rent out your place. You'd have to remortgage at a commercial (much higher) rate.

Not sure how likely it is you'd get caught, but worth keeping in mind

[jcc]

Most mortgages won't let you rent out your place. You'd have to remortgage at a commercial (much higher) rate.

Not sure how likely it is you'd get caught, but worth keeping in mind

Yeah, I should have noted that. It's also part of the calculus of "if you don't live in it for at least X years, it's a money losing venture".

One thing I've always been bothered by with the rent income covers mortgage things the people trying to sell real estate as investment show is that that is for the new manshon. Later down the line, the rent will drop, maintenance fees go up, and all of a sudden the rent paying for the mortgage isn't quite keeping up.

In the end of the day, you do own the manshon and a share of the land(which is pretty small), that you can always resell afterwards, but I think that if you're buying you probably want to live there at LEAST 7 years, probably more like 10+ if you want it to end up cheaper than renting once you consider all the transaction costs(but again, there are a huge number of variables at play here, so it's really hard to come up with any kind of catch-all rule, nevermind the possibility of the floor falling out of the housing market, or natural disasters)

[RetireJapan]

Yeah, I thought about renting our place out if we end up moving, but it really doesn't seem worth it. Much better to sell and invest the proceeds in the stock market.

[mighty58]

If you're comparing apples to apples (same time period of residence), buying wins. Even if your home was to lose 50% of its value by the time you're ready to move on, recouping 50% at the time of sale is still better than recouping zero.

I start with the assumption, of course, that real estate is an expense, not an (income generating) asset.