Re: Buying vs renting

That all makes sense but the last part. His friend's estate would have been
worth more if he'd taken the month by month savings and put them in a stock
index fund.

On Feb 28, 2018 7:24 AM, <[email protected]> wrote:

> I've read the responses and the best example I have is the following:
>
> My father joined the US Navy straight out of High School along with
> his best friend.  They both served in the USN for 20 years and both
> retired with full benefits. They both got married at around the same
> time and they both had 2 kids.  They both were rotated around the
> country every 2 years.  The major difference is my father always
> bought and sold a private home (every 2 years) when changing duty
> stations.  His friend always stayed in on-base family housing paid
> for by the USN.  When they both retired to their original home town,
> my father had bought his home outright ($185,00.00).  He didn't have
> a monthly house payment for a 1600 sq/ft house on a wooded 1 acre lot.
> His friend also bought a similar house ($165,000.00) 5 miles away on
> similar property and had to pay $1024.00 month out of his
> retirement,  (which my father  didn't have to do).  My father, with
> the savings, was able to  buy a boat and RV, his friend just scraped
> by.  When my dad died his estate was worth approximately $425,000.00
> and when his friend died, his estate was worth around $35,000.00.
> I find this was the best argument for buying over renting (when
> renting was free in this situation).
>
> Regards
>
> Sent from my IBM Selectric III
>
> ----- Original Message -----
> From: "Friends of Rohit Khare" <[email protected]>
> To:"FoRK Rohit Khare" <[email protected]>
> Cc:
> Sent:Tue, 27 Feb 2018 22:00:27 -0800
> Subject:Re: [FoRK] Buying vs renting
>
>  > On Feb 27, 2018, at 3:03 PM, Marty Halvorson <[email protected]>
> wrote:
>  >
>  > Despite Tom's excellent thoughts on the subject, my observation is
> this: All the money spent renting is benefiting only the owner of the
> rental unit.
>
>  Presumably you get use of the unit you are renting. The common
> fallacy of renting as “throwing away money” is predicated on the
> renter and the owner having an identical cost basis for the same
> place. This assumption is rarely true. Renting is often a way to split
> the difference between your cost basis to buy and the owner’s lower
> cost basis. In such cases, there is literally no way for you to come
> out ahead by buying the same place no matter how you try to explain
> the numbers unless you are loaded with cash (which is probably a bad
> investment of said cash). And this is the case more often than not in
> the US.
>
>  I find the arguments that some people gain emotional or psychological
> benefits from buying more compelling than arguments for financial
> benefits. Of course, the calculus is a bit different if you plan on
> living in the place you buy for the rest of your life. Admittedly, I
> have not gotten to the “last place I am going to live” stage yet.
>
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