https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
You have completely neglected:
- maintenance (1%/yr)
- property taxes (1-2%/yr)
- utilities included in rent
- opportunity cost (8% return on alternativee investments)
- transaction costs (4% to buy, 6% to sell)
- rent growth (=home price growth IMO)
- inflation (should =rent and home price growth IMO)
- mortgage interest deduction
In SF a property that costs $3k/mo to rent might cost closer to $800k. That comes out to about the same cost either way, according to the assumptions I stated above.
Your argument is how many people look at the stock market as well. It always goes up! - if you entered the stock market correctly, exited it correctly, invested correctly, had a long enough time horizon, and could stomach risk/declines.
Renting is not a long con and its absurd to claim that.
Renting being a con might have been too strong - it might not be an intentional act to steal money. However, renting is almost never in your best interests, if you are not doing it for the flexibility (don't have enough money at the moment to buy a house, don't want to be tied down, etc.)
In many places in California, I understand rent has gone up, on average, over 20% — each and every year for the past couple of decades.
How many investments in this world can effectively guarantee a > 20% APY?
That’s way better performance than the stock market.
In your example, monthly expense of ownership is ~2250, which is lower than the rent of 3000.
Of course, this doesn’t take into account the down payment and risk associated with home price fluctuations.
Consider this second home scenario. A 2000 square foot home in one area in Maryland (outside Baltimore and Annapolis) costs $3000 per month to rent. Median home price in the same area for roughly same size is $450k. Figure you have $90k down (most don't - which is another way people are forced into renting), and you get 3.5% interest with a 30yr fixed mortgage. You are looking at paying $360k principal and $222k interest over those 30 years, with a payment of ~$1600. Both families live 30 years in the their houses (also not realistic, but makes it easier).
After 30 years the SFR family has spent $1,080,000 and has nothing to show for it. After 30 years the owner family has spent $582,000 (~54% of the SFR money). Not only that, they also own the house. At the U.S. national average home appreciation of 3.85%, that home is now worth $1,397,679. That means that while the SFR family is in the red $1.08 million, the owning family has money if they sell the house, to the tune of $815,000.
Don't ever let someone tell you renting is cheaper in the long term than owning. Renting may be all someone can afford at the time, but it is always a con in the long run.