take the after tax cost of owning your property vs the after tax cost of renting a similar one, and you will be paying about 30%-40% more if you own.
if you take the difference in what you save by renting and put it into the stock market, you will be way better off long term.
there are no tax benefits to owning. yes you can deduct the interest expense on april 15, but the price of real estate has increased long ago to reflect this. in finance terms, the present value of the expected future tax benefits is already capitalized into the prices of homes. in effect you are pre-paying your tax benefit in the form of a higher priced house.
if you don't buy into this, what would happen to home prices if you were disallowed from taking the interest deduction? they would fall. by how much? approximately by the present value of the expected future tax benefit that you no longer have.
in addition, owning is VERY risky, since you are highly leveraged... 5:1 with a 20% down payment, and 10:1 with a 10% down, and fully leveraged with a zero down.
a $500,000 home with 10% down, you have $50,000 in equity. your house falls by 10%, it's worth $450,000. you've lost everything. it falls by another 10%, you are in the hole $45,000.
if you don't think they can fall by this much, think again.
my luxury condo i'm renting for $2600 a month? if i had bought it, i would be paying a total of at least $4000 per month. not to mention that prices took a major sh!t in the last year. two years ago they were going for $600k. now they're going for $400k.
if you own and you need a new roof, it's your bill. water heater, yours. air/heat, your problem. taxes, insurance, upkeep. all yours. earthquake? 20% deductible. fire, flood, etc...you're screwed. unbearable neighbors, just leave.
as with chicks... if you are under 30, be a happy renter.
