1) My uncle lives in a suburb in New York. He was paying $900 per month to rent a small 2 bedroom apartment. He bought a 3 bedroom house for $130,000; it is much bigger, nicer and monthly payment (including taxes and insurance) is less than his previous apartment. Moreover, he is not just giving that money away; it is contributing towards the equity. At some point, he will have no rent and own the house out right.

2) How about the cost of Insurance? Let's add that to the expenses as well. Thanks to Obamacare, we are now able to get healthcare; Insurance company previously denied our treatment due to pre-existing condition despite charging $1,500 per month.

3) I am exploring that option, but most people still use big banks.

4) Of course, I got deals. I own my phone outright, and pay $50 per month for pre-paid data plan. My 50 mbps internet + digital TV (mid-package) is $55 per month. No contracts. But most people are still paying $100 for phone and $100 for cable.

> If rent is $2,000/month, a mortgage would be far more than that

Typically, the rent is covering an existing mortgage + taxes + insurance + maintenance + profit. If the mortgage were higher than the rent, the building owner wouldn't be making any money renting it out.

No, it doesn't work like that, because it doesn't take the house's capital gain into account.

Given the ability to grow the housing supply, there is typically a fixed return for a property. That return will be split between capital gain and rent. Rent no longer covers the mortgage because it is the total return that determines if it is a good investment. There are also the tax benefits of renting out a house in some locations (maintenance and insurance would be deductible).

When we rented out our house, we were told that the typical return on capital was 8%, where 2-3% would be capital gain, and the rest in rent. We priced our rent at 5% to get a quick rental. Mortgage rates in that location are 6%.

If it is hard to gather a down payment, then rents can exceed mortgages because renters cannot easily swap between the two.

Admittedly, lessons from the SF housing market aren't broadly applicable, but due to rent control, the booming home prices, and bizarre property tax rules, it's much cheaper to rent.

And they aren't always making money. Its about investment.

> 4) Call around and get a deal, my phone plan is $65/month

Which provider are you with?

You can get a phone plan for $10/month (unlimited talk and text no internet though) and $25/month(unlimited talk, text and data) from Republic wireless. Only caveat is, the plan is limited to android and you have to buy the phone for $299.00 upfront.

That is a Sprint plan, they've been trying to wean people off the discounted rates, but many companies give fairly significant discounts. I think I'm on a 25% discount currently through my girlfriend's place of business.