Dec 13

Interesting. When renting beats owning, holding rentals makes less sense.

In the following cites owners of one and two families appear to be better off if they sold.

In Dallas, Denver, Houston, Kansas City and Seattle, consumers looking to build wealth are better off renting a property and reinvesting the money they would have spent on ownership, according to an analysis by professors at Florida Atlantic University and Florida International University.

That’s because the total monthly cost of homeownership in those areas is rising faster than monthly rents, the researchers said.

In the following cites owners of one and two families may see equal returns if they sell or hold, but the alternatives to rentals are actually passive investments, where scattered-site small properties are more like buying a job.

In Atlanta, Boston, Chicago, Cincinnati, Cleveland, Detroit, Honolulu, Los Angeles, Milwaukee, Minneapolis, New York, Philadelphia, San Diego, San Francisco and St. Louis, consumers are just as likely to create more wealth by renting and reinvesting as owning and building equity.

And the part the media often overlooks

Despite strong demand leading to rising rents, renting typically still costs less per month than owning, after factoring in home maintenance costs, homeowner association dues and other fees. Renters who don’t invest that monthly savings in stocks and bonds might be better off buying because homeownership is a forced savings plan, the professors said.

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