In Israel, in the 50's-80's, in government housing there was a kind of rent that accumulated towards payment of your house. And i'm not 100% sure, but maybe even if you needed to move houses(in coordination with government rent company), the collected money would have transported with you to your new house.

EDIT: just to add context - Israel had a huge challenge - it was created with the goal of being a home for every jew globally - and most have come - which lead for a huge demand for housing, for many poor people. And for the first decades of it's history it was mostly successful at that. And it didn't seem to inhibit growth or employment.

Rent-to-own in general exists as a concept in many places, but it has a sour reputation due to the predatory practice of vanishing equity. Essentially, a renter is sold on a higher rent price on the premise that it will result in their eventual ownership. However, if they fail to make rent or must leave early for various circumstances, they have no equity to recoup. In some cases, this serves as an incentive to force out a tenant, and in worse cases, that's the design of the scheme from the beginning. Government housing programs tend not to fall under this category, but I have heard of some governments (e.g. Singapore) revoking housing rights without return of any capital as a penalty for certain violations.

Yes, under capitalism, everything that can be corrupted will be corrupted. This generally seem to be less of a problem for the nordic countries somehow, probably a combination of strong regulation and a culture a bit more geared towards fairness.

BTW, Singapore has an home ownership rate of 90%, so it seems like a big success.

>Unless subsidized or losing money, the rent is more than a mortgage payment would be.

That is demonstrably false. Renting is more than a mortgage interest payment would be. Unless you feel like you have some special knowledge about the local real estate market, your capital is likely better off in the stock market.

Mortgage paymenets are almost entirely interest in the early years. So in many cases there's little difference.

Rental real estate works on leverage to a greater degree than is possible with stocks. Most banks won't make loans to invest in the stock market. They will make loans for investment property. So if you have $100,000 you can buy maybe 4 or 5 $100,000 rental properties, and have your tenants pay off the loans. Not as likely that you can take $100,000 and buy $400,000 - $500,000 of stocks, at least not as an unsophisticated individual investor.

While a regular bank won't give you a loan to invest in the stock market, stock brokers will: It's called margin trading, and it's exactly borrowing using the stock you have as collateral, just like you put the house as collateral in a mortgage. Since stocks are far more volatile than real state, you are allowing your broker to sell your assets if your account is about to go underwater, in what it's known as a margin call.

You can have a 5:1 margin account, like the one you describe, as an individual investor: If you have 100K to put in a brokerage account with your own money, you definitely have enough money for a brokerage to let you do it. It's just that it requires attention, because with a 5:1 ratio, a 5% loss just became a 25% loss. Ignore the market in the wrong week(say, in early October 2008), and all your margins get called, and you are in deep trouble.

Still, if you have 5 $100K rental properties, and you aren't bleeding a lot of money for a company to take care of it all for you, chances are you are still paying quite a bit of attention to your apartments anyway.

As far as whether mortgages or rentals are more expensive, it completely depends on the local market and local laws: In a pro-renter environment, rental is more expensive, because nobody wants to rent apartments out: People would rather let apartments sit empty. In a pro owner environment, at a place losing population, renting might be cheaper.

>Mortgage paymenets are almost entirely interest in the early years. So in many cases there's little difference.

People generally don't buy houses in order to rent them. Usually houses are rented out when the owner is moving and decides to rent it out rather than sell, at which point the owner has a substantial amount of capital in the house.

And? Are they supposed to let people use the house for free? It seems like communists are willfully ignorant of the time value of money.

Quite the contrary. Communists understood that only labour creates value, and education gives more value providing opportunities to more sophisticated labour, aka technology, inventions. This is why they gave housing for free to everyone agreed to provide honest labour within the system. The system had flaws, was not free from corruption, but it worked. My mom spent 5 years in toxic plant, was awarded 3 bedroom flat in modern house for free. It allowed her to invest more into my education and give musical education to my brother.

I think you replied to the wrong comment?

Access to capital gives larger landlords preferential rates, terms, and prices compared to individual buyers.

Unless the rental unit is a standalone single family home (and sometimes even then), economies of scale in maintenance and upkeep result in those costs being cheaper to a landlord.

Downpayments required for loans with good terms have opportunity cost to the buyer. On average over the long term, it has been appropriate to assign that downpayment a discount rate which is a net negative against average market returns.

If realestate markets are stable or reasonably increasing, mortgages are safe. But renting reduces risk of being stuck in an upside down loan, and risk reduction has value.

Despite all of these factors, you're right that rent includes profit, so in many cases it's wiser to purchase. But it's not as globally true as the parent comment suggests. The best choice comes from a balanced assessment of a variety of factors.

The problems with owning are:

1) You have to buy for resale, not to fit your budget best. People tend to want to max out their mortgages these days. And if you are trying to sell into a downturn, it can be a problem.

2) Fees at time of sale. 6% twice ( once at purchase, once at sale ) eats 12% for the life of the mortgage.