WilderSueden
2023-02-01 11:23:16
- #1
Even the 40 years' worth of rent mentioned at first sounds like a lot - but if I buy/build a house at 30 and have to pump in 40 years' worth of rent, then that eventually runs out. But if I live to 80 or older, in the same scenario, I can add another 10 or more years' worth of rent on top, because they never stop until I die.
You have a misconception there. 40 years' worth of rent corresponds to rent at 2.5% of the purchase price. That means, with an interest rate of more than 2.5%, you will never be done paying rent at the initial prices. Additionally, there are purchase incidental costs and maintenance, which you do not have as a tenant. Of course, rents increase eventually, but in the current situation with 4% interest and high multipliers, you simply pay much more rent for the money than rent for a comparable property. A lot still has to happen before rent increases catch up again.