It only makes sense to rent something if you don’t have any of your own options.
Getting bigger mortgage and having your family once a year instead of paying for a hotel gets you ahead really quick.
TCO of a bigger car is not that much bigger to match having a smaller car and then renting out a bigger once in a while. Unless it is like once in 10 years.
Similarly, with respect to a car, if the only alternative was a smaller car maybe I'd have chosen that, but my average total transport costs over the last 10 years is about 1/10th of the average UK car costs when factoring in occasional months with hundreds spent on Uber. That works for me, because I live somewhere with excellent public transport and don't need to use even that much. It won't work for someone who don't have my life or my transport options. That's fine.
That was my entire point: Do the numbers. And that also includes for people who think they're saving by holding back.
At least, as a rule of thumb, property value gains tend to exceed mortgage interest paid. It's not universally true, but generally you'll at least recoup a significant proportion of what you paid.
> Across the country's 35 largest metro areas, homes that boast of a formal dining room ask a median of $325 500, 23% more than the national median home price[0]
I didn't find specifically the median house price, but reversing the 23% increase puts the median at $265 000.
This suggests a median 'dollar value difference' from adding a dining room of around $60 000.
With a median down payment of 13%[1], and an average interest rate of around 7%[2], you'll pay back around $550 000 over a thirty year mortgage[3].
In order to pay back less than $610 000 (i.e. the $60 000 value difference), the mortgage shouldn't exceed $293 000, leaving you with only $28 000 to build your dining room and come off better off at the end of the mortgage term.
Obviously if you can do better than the median rates, down payments, and values, then the maths changes, but on average, it looks like I might be wrong about you recouping the full amount you spend on adding a dining room.
[0]: https://money.com/dining-area-home-sales/#:~:text=Across%20t.... [1]: https://time.com/personal-finance/article/average-down-payme... [2]: https://www.bankrate.com/mortgages/mortgage-rates/#mortgage-... [3]: https://www.calculator.net/mortgage-calculator.html?chousepr...
You can't compare that to an AirBib bill dollar for dollar. The money you give to AirBnb is gone forever. The money you pay in mortgage partially goes to your equity and may partially be a tax deduction.
However there are other issues to take into account: 1) it's not a given the added value of a room will be as high as the cost of adding it, and it can severely prolong the time before you're in the black. E.g. my house is one of the largest on my street already, and that typically results in a lower return for adding additional space, 2) you need to also consider whether the cost to cover the needs you otherwise would meet by adding a room is met by more, the same or less than the amount adding the room adds to your mortgage payments. If it is less, then it takes fairly little less before you're able to increase your capital faster by putting the difference in an index fund at the point in time when most of your mortgage payments still go towards interest.
By all means, it can pay off to build, and odds are I in fact will add a room to my house over the coming year whether or not it will be profitable. I'm not saying you shouldn't. Just that it's worth doing the numbers and figuring out what actually works best for you (and, yes, that does include factoring in equity) and sometimes the right choice for you might not be what is financially most prudent anyway. But it's worth going into it having run the numbers.
And the authority for the people to decide their “actual” needs should be who exactly?
E.g. maybe your parents staying specifically in your house is too important for you to give up, but for those whose actual need might well be to want to spent holiday time or the occasional long weekend etc. with family or friends, many places you can finance a lot of trips and big fancy AirBnbs for all of you together for the savings from a smaller mortgage.
For some it might similarly be even more of a highlight to throw the parties in a lavish rented location or fancy restaurant (but again: it might not be; if part of your enjoyment is to host at your home, that's your choice).
Depending on how frequently you need that truck, you might be better of renting/signing up to a car-sharing service.
Sometimes people genuinely want to be able to handle the very specific edge case and that's fine. But often people also just haven't considered the cost of buying for the edge cases vs. the cost of renting on occasion and what it might allow.
I wouldn't want to suggest you shouldn't make decisions that takes your edge cases into account, but I find to me at least that there are often alternative ways of addressing edge cases than people's "defaults".