Monday, September 29, 2008

[link] Renting Makes More Financial Sense Than Homeownership ?

While in the back of our head we are still contemplating the idea of buying a home, I came across this article explaining why Jack wants to rent until a foreseeable future instead of owning a home.

Following is his summary, but the article is a good read. He does answer common questions that people might have like "home owners get a tax break.", "why throw money down the drain", "I just made a tonne of money selling my home, you are wrong!".

Shares right now cost 16 times earnings and over long time periods return 7% a year after inflation. Houses right now cost 19 times their "earnings" and over long time periods return zero after inflation. And they look likely to return less than that for a while.

Read on: