Re:Basic income plan clearly rejected by Swiss voters
by soyiuz on Sunday June 05, 2016 @03:41PM
(#11842719)
See my post above. Once you pay off the mortgage it is equivalent to paying yourself out a percentage of cash investment. In NYC that number is approximately 4.5%. That is pretty good but not great considering the risks of ownership.
Re:Basic income plan clearly rejected by Swiss voters
by barrkel on Sunday June 05, 2016 @05:51PM
(#11843329)
Home ownership via a mortgage is a leveraged investment. If you're renting, you usually don't have access to leverage for an investment like that. Further, when you're renting, you don't normally have much of an impetus to save extra and accrue interest; whereas a mortgage acts as a forced saving scheme. You must save (build up equity) or else the bank will foreclose on your property!
Re:Basic income plan clearly rejected by Swiss voters
by bane on Sunday June 05, 2016 @04:58PM
(#11843081)
Except I think you are assuming the renter is starting out with a large cash reserve they can invest and the owner doesn't have that at the start and must accrue that value over their mortgage period.
To compare correctly you must assume both people are starting the same
Rents also tend to go up with inflation, once you enter into a mortgage agreement, mortgages do not and thus you end up paying less over time (in real dollars) to live than if you rent. Since most people's income goes up, this means that renting tends to stay at about the same percent of income over a person's lifetime while it becomes less and less of a part of somebody's income who has purchased.