Rent or Buy a house (assuming you can afford both)?

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It can be a very personal choice, and depend a lot on your circumstances. Do you prioritize having an owned asset later in life? Do you want more reassurance that you can't be thrown out of your place on short notice? Do you prefer having control over more aspects of your residence? Do you like moving from place to place, or have circumstantial requirements that lead you to do so moderately often? Do you prefer major problems to be the financial problem of someone else, with them being legally obliged to fix it at their own cost?

I've both rented and owned, and (as mentioned upthread) there are definite pros and cons to each. Rentals, here, tend to come with inspections every three months or so, so owning meant never having to have that on my plate, or keep a property up to particular standards (grass length in the yard etc). However, renting had the advantage, when I moved around a lot chasing career opportunities, that I could pack up and leave for another city or another state on short notice, and not worry about the cost, effort, and hassle of trying to sell a property and buy a new one. That was a kind of freedom in and of itself.

Ideally, I'd like for there to be some kind of government arrangement where all rental payments are either paid through or recorded in some fashion, and you get credit for them which can go towards buying a house in future. So if you live somewhere that costs $2000 a month, and you live there for ten years, that's $240,000 credit you can put towards a house. Basically, every rental payment you make, anywhere, counts as a mortgage payment. Similarly, if you've been paying a minimum amount of rent for five years, you should be able to get a mortgage where the repayments are that amount. If private banks don't want to have to do that, fine; the government can provide that service too.

It’s the taxes that’ll kill you on ownership. Lots of people lose their homes because they can afford the mortgage but not the land tax. Also look at what services that tax will provide for you. No sense paying high taxes toward education if you don’t have kids in school, or taxes for road maintenance if your street will end up under construction for new water pipes. Actually, check the city water infrastructure because it can cost tens of thousands if the pipes collapse under your property and that’s not covered on home insurance.

Right now the plan is to inherit my parents McMansion and maybe live in it for the rest of my life or sell it to buy somewhere else.

I rent off the local council and have the option to buy my flat if I stay here long enough so I'm quite happy with that scenario. Hope to get a council bungalow when I'm 55.

still on the whole, better off having your own place on its own land.

It depends who you are. The maintenance expenses of owning can hit you hard. Fixing a leaky toilet cistern is one thing, but re-roofing, repointing the brickwork, replacing the central heating, rewiring, etc. isn't so easy, and if you get it wrong, you could be in deep trouble. Getting old doesn't help. But you get a lot more freedom to make the place how you want it, though even there you might have to bear in mind what you might be doing to the resale value if your ideas aren't in keeping with convention.

Renting takes all that off your shoulders, but you have to suffer inspections, compulsory this, compulsory that. Council tenants where my parents used to live weren't even allowed to paint their own front doors the colour they wanted, and the colours the council enforced on them were often tasteless. A lawyer once told me that landlords are a notorious pain in the butt when it comes to deposits, and I've seen a lot of evidence that he was right. And a landlord can evict you, though it's harder to do that in the UK. In Arkansas, tenant rights barely exist. The whole thing always felt undignified to me.

I don't know that taxes in the UK are any different for owners than they are for tenants. The only one I ever had was council tax, and AFAIK tenants usually have to pay that too. I had to pay a bit of ground rent on a leasehold property at one time, but it wasn't much and there was a legal right to buy the freehold. Lawyer said it wasn't worth it.

Ultimately you can't get the freedom without the responsibility, and a lot of that responsibility is financial.

I think here in the states only landlords and maybe house flippers can do cost segregation studies. The regular owner-occupied homeowners cant do it. However they do get the mortgage interest deduction.

I'm afraid I won't ever own a house so maybe I will just do FIRE and retire in The Philippines while living near my relatives. I don't plan to have kids due to trauma and I doubt I will ever get married.

I heard on Youtube that it makes more financial sense to rent than own in all major cities in America currently. I dont know if thats true or not.

As a first reaction I would say buy a house. It's cool that you can do whatever you want on your property and in your house.

But if I think about it, I would say it's better to rent a house.

Cons of ownership:
- you can't move
- you can loose everything because of a natural disaster (e.g. flood, tornado,...)
- the value can plummet to rock bottom
- you can get very annoying new neighbors

If you rent, you can leave the house at any time without the stress of looking for a buyer and possibly losing a lot of money.
If the house gets destroyed completely, you just move to another. You loose nothing.

If you buy a nice home in the suburbs of a city, you can always sell the land if a fire or tornado destroys the home.
I just got an offer in the mail for $269k in any condition. It is 0.3 acres so they may be able to build a big 3000sq ft house with a big garage in front. Not only does it have a short commute to the high paying insurance jobs and shopping, there is no HOA or nasty deed restrictions! I could park a boat in my driveway! Plus the public schools are pretty good. I don't mind paying the higher property taxes as it makes my place more valuable.

Some neighbors moved in with young kids. They were noisy at first but as they got to know me they toned it down!
There are more kids now that the older adults have moved out and younger families have moved in.

Real estate is a good investment to offset the ups and downs of the stock market.
The market has been crazy this year but since I didn't panic, my net worth is about as high as it has ever been, especially if you consider a rolling average and not a peak day to day valuation.
Since I paid off the mortgage my expenses are very low, which means I don't need a lot of cash flow from my investments in retirement. This makes it easier to ride out bear markets, or times when stocks are going down in value.

Owning your own home may be cheaper Health Insurance as the ACA or Obamacare assistance to those earning more than 400% of poverty level expire in 2026 Those living off a 401k can reduce withdrawals to avoid earning too much.

I believe when it comes to real estate, renting is better, for a few reasons:

1. Houses are difficult to liquidate, so if you buy a house, you're tied down to one location and it's more difficult to move, and often if you do want to move you have to sell at a loss because housing prices shift with various market forces.

2. If you buy a house, you're losing out on the opportunity cost of the down payment, which means less money to invest in stocks, crypto, and other assets that often have higher RoI than real estate.

3. Houses have a lot of overhead cost. It's not just the sale price that you have to worry about, but there's also a lot of expensive maintenance you have to do to keep the place from falling apart.

4. You also have to deal with the vagaries of natural disasters and homeowner's insurance, which are unpredictable and unreliable. Your entire investment could be wiped out overnight due to a random fire or a tornado, which isn't the case with renting, because in that case you're not treating the house as an asset. You might think homeowner's insurance will protect you, but if your area becomes a hot spot for natural disasters, the insurance companies can and will pull out, leaving you holding the bag.

Overall, houses are just not a good investment, unless you're a multimillionaire who can flip real estate. We've been sold on this idea of home ownership being the American Dream, a narrative that was created by banks so that people would take out more mortgages. It's very lucrative for them, not a good investment for you.