Fisher Investments’ founder Ken Fisher said it is cheaper to rent than to buy your own place.
Almost none of your monthly mortgage payments apply to equity for many years.
While many readers don’t seem to want to believe it, renting a comparable house is almost always cheaper.
Renters won’t invest any possible savings.
The National Association of Realtors reports the average homeowner holds onto his or her property for 10 years.
The U.S. Census Bureau reports national and local costs for renting and owning homes. Nationwide, from 2012 to 2016, the average median monthly gross rent was $949. Comparable homeownership via mortgage plus taxes and other costs was $1,491. In every state, as well, owning costs more than comparable renting. In Houston, $1,492 vs. $898.
He said when people buy a home they go crazy, putting 50-70-percent of their net-worth in this one investment and it’s a liquid investment.
“Think about it, you have closing costs that are about five percent, you have transaction costs, you have maintenance costs, you have taxes, all these things, you’re probably 20-30 percent down day one when you make this investment in a home,” said Altucher.
He said it’s better to rent.
If you’re determined to buy, Altucher said you have to “climb a big hill if you want this investment to work out.”
“Your probably paying less money every month than you would be if you have your insurance, your taxes, your maintenance, your yard costs, your fix up costs, everybody has fix up costs, your rent is going to be much cheaper,” said Altucher.
He added that adjustable rate mortgages and cities increasing taxes results in more money you have to pay.