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A comment on Bad property debt exceeds reserves at largest US banks. Parent comment

Re:Bad property debt exceeds reserves at largest US banks by IggleSniggle on Tuesday February 20, 2024 @09:19AM (#39441620)
That's the classic line of reasoning re rent/buy. But if you're taking out a loan to buy a house, you're still paying rent, you're just renting money instead of housing. And now you're responsible for everything that happens to your property for at least the next 5 years if not 30 just to make it worth it on the closing costs vs renting.
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Re:Bad property debt exceeds reserves at largest US banks by madsbuch on Tuesday February 20, 2024 @09:24AM (#39441684)
Yep, right now the cost of money is more expensive than renting a house at 80% financing.

So on top of this, if you decide to buy a house at 500k, you lock up 100k and still pay more in interest + HOA than ren for comparative apartment.

In conclusion: It only makes sense to buy right now, if I have an expectation that the price will go up on the home.

/edit: Added the conclusion

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Re:Bad property debt exceeds reserves at largest US banks by lotsofpulp on Tuesday February 20, 2024 @11:09AM (#39442989)
> In conclusion: It only makes sense to buy right now, if I have an expectation that the price will go up on the home.

What if someone does not want to deal with the volatility of a landlord, such as rental terms changing, or the property being sold, or the owner not maintaining the property?

At a minimum, being able to ensure you don’t have to move your family due to landlord changing their mind is worth something.

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Re:Bad property debt exceeds reserves at largest US banks by madsbuch on Tuesday February 20, 2024 @11:51AM (#39443564)
you have protections around these things in most places, and especially in Denmark.

also, renters I am referring to are commercial renters (so definitely not the cheapest ones).

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Re:Bad property debt exceeds reserves at largest US banks by ethbr1 on Tuesday February 20, 2024 @05:35PM (#39447901)
If you're putting 80% down in the US, I'd suggest the thought process is wrong. With good credit on a good property, 95% LTV isn't uncommon.

Looking at residential property as a forever home is wrong.

You're buying an asset, that happens to also let you not pay rent. Consequently, you want (1) value stability (see earlier qualities) and (2) leverage (as you get to keep all the profits and offset the interest).

80% LTV = 5x leverage of down-payment

95% LTV = 20x leverage of down-payment

Given that your net rate of return should also be against your down-payment, shrinking that substantially boosts effective return at time of sale.

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