Renting is Throwing Money Away, Right? (2015)
These articles always ignore leverage.<p>Generally, with 20% down you are leveraged 5:1. So even if your home is just keeping pace with inflation of 3%, you actually experience 15% growth on your investment. To use the example in the article, if your investment doubled between 2009 and now, your $200k in a $1M home just became 1.2M. 6x growth beats out 3x growth in stocks in the same period.<p>Sure, you can be leveraged in other investments but (1) your interest won&#x27;t be tax deductible, (2) your interest rates won&#x27;t be nearly as low, and most importantly (3) you won&#x27;t be able to borrow with no recourse (depends on the state law, but &quot;no recourse&quot; means your downside on a primary residence is limited to the equity in the home. If you default on the loan they can&#x27;t come after your other assets.)<p>Does it mean renting is a bad idea? No. There are plenty of reasons it might make financial sense to rent. But articles like these should accurately discuss the financial upside of buying.