The first thing would be that it is not reasonable to expect your house to increase by 3x or 4x in value. It might. But if it does, it’s due to luck. Not something you can bank on.

Second, you have to back out all of the additional costs associated with owning a home.

Third, you have to consider the opportunity cost. You could have invested your down payment and other money used on your home in the stock market. The renter does not end up with “nothing”. They invest their capital in the market.

Depending on the price of houses and rent in your area you might be better off owning a home or you might be better off renting.

Economic policy wonk by day. Personal finance writer by night. I write about investing, debt, and all things related to money. Editor of Making of a Millionaire

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store