This is just not true. Go to portfolio visualizer and hand pick the dates even. Your cash flow difference of buying the same house you rent is 5-6k less a month in ~2m range. Given that they probably rent in a place that is less than 2m it is likely a cash flow difference close 7k/mo. Also, with SALT changes only 750k can be deducted so itemizing will get them only ~40k vs standard of 24k.Afty wrote: ↑Sun May 13, 2018 1:57 pmIf you are committed to staying here long term, I would not rent and "wait for the crash." I don't think the strategy of waiting for a crash is any more applicable to housing than it is to the stock market, for the same reasons -- what if the crash never comes? And how will you know when the crash is done and we're at the bottom?
FWIW, we tried this "wait it out" strategy. We moved here in 2011 and rented a SFH (with small kids) from 2011-2017, and finally bought in 2017. We ended up paying 2x what we would have if we had bought when we first moved here. Remember: "The market can stay irrational longer than you can stay solvent."
They come out ahead using 3 fund portfolio 80/20 during this run-up from my breif glance at the numbers. Plus they are diversified, have liquidity and not cash poor. This is not even taking into account the lifestyle creep that comes with wanting to make your home nice/upgrades etc.
At these prices you are investing in an asset that pays assuming owned outright 3% best case pre tax and then you get to pay 1.33% property tax, maintainance and insurance. You have to hope for capital appreciation and even if that happens you pay a 6% commision when you sell. What BH would invest in this? The math works for those who need the large monthly obligations to force savings and wouldnt save the difference in cash flows.