Let me give you an overly simplified example. You are in a property market where rental yield is 3% (happens in some cities)
You could put a million dollar into buying a house and save $30k in rent every year
or
You could rent a million dollar house for $30k, and invest your million dollar in the market at 7%, returning $70k per year
Obviously this gets more complicated with mortgages, taxes, maintenance, interest rates, etc. but the gist of it is that owning your home always comes with an opportunity cost, every dollar of house equity is a dollar that isn’t invested somewhere else. Depending on circumstances, renting might be the most economical choice.
Let me give you an overly simplified example. You are in a property market where rental yield is 3% (happens in some cities)
You could put a million dollar into buying a house and save $30k in rent every year
or
You could rent a million dollar house for $30k, and invest your million dollar in the market at 7%, returning $70k per year
Obviously this gets more complicated with mortgages, taxes, maintenance, interest rates, etc. but the gist of it is that owning your home always comes with an opportunity cost, every dollar of house equity is a dollar that isn’t invested somewhere else. Depending on circumstances, renting might be the most economical choice.