A new analysis of the rental versus buying dilemma shows that renters are often in a better position. The key to building renter wealth is to take the extra money they would have spent on housing and invest it in the stock market, preferably in low-cost stocks.
Is Stock Investment Better than a Down Payment?
The essence of case’s argument is that if you take all the money you would have spent on a down payment and spent it in the financial market, you would have a much larger amount after 30 years compared to what you would have if you had invested it in a home, because stocks generate much higher returns over the long term than real estate – 7.6% annually over the past 50 years compared to 5.4% for homes.
Timing is Critical
Who comes out ahead? That depends on when you start the comparison because the stock market and the real estate market can vary significantly. Over a 30-year period starting from 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. But if the competition starts in 1972, the buyer would be ahead by $340,154 compared to $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? That depends on when you start the comparison because the stock market and the real estate market can vary significantly. Over a 30-year period starting from 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. But if the competition starts in 1972, the buyer would be ahead by $340,154 compared to $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? That depends on when you start the comparison because the stock market and the real estate market can vary significantly. Over a 30-year period starting from 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. But if the competition starts in 1972, the buyer would be ahead by $340,154 compared to $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? That depends on when you start the comparison because the stock market and the real estate market can vary significantly. Over a 30-year period starting from 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. But if the competition starts in 1972, the buyer would be ahead by $340,154 compared to $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? That depends on when you start the comparison because the stock market and the real estate market can vary significantly. Over a 30-year period starting from 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. But if the competition starts in 1972, the buyer would be ahead by $340,154 compared to $280,181, a difference of $59,973.
Timing
Critical Order
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing is Critical
Who comes out ahead? It depends on when you start comparing, as the stock market and the real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the contest starts in 1972, the buyer will be ahead by $340,154 versus $280,181, a difference of $59,973.
Timing
Critical Matter
Who comes out ahead? It depends on when you start the comparison, as the stock market and real estate market differ significantly. Over a 30-year period starting in 1982, the buyer ends up with a net worth of $703,398, while the renter has $858,990, putting the renter ahead by $155,592. However, if the competition starts in 1972, the buyer will be ahead by $340,154 compared to $280,181, a difference of $59,973.
Source: https://www.investopedia.com/why-it-may-pay-to-rent-instead-of-buy-8416898
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