Ramit Sethi argues that renting isn't throwing money away. Homebuyers often ignore taxes, maintenance, insurance, and repairs that can actually reduce net worth. Buying makes sense only if you put 20% down and stay at least 10 years.
A lot of Americans actually reduce their net worth instead of increasing it when they buy a house. That's because they don't factor in taxes, maintenance, insurance, even repairing a roof. And that can put them behind instead of ahead.
So what? We should just keep renting?
Maybe renting is actually a much better deal than most people think. A lot of people are going to tell you you're throwing money away on rent. Don't listen to them. Just think about it. The landlord has to take on all the risk, and if the price of the house goes down, they're stuck with it. If something breaks, they have to fix it. Meanwhile, you live in that house, you pay a nominal rent, and if you need to pack up and leave, you can do it.
Huh? You're making it sound like an incredible deal. Yeah, like no one should ever buy a house, ever.
No, look, buying a house can make sense for some people, but just remember, this is the biggest financial decision of your life. So make sure that you can afford it. Make sure that you can put 20% down, and make sure you're going to live there for at least 10 years. Ah, my face.
