> Renting will effectively (as the video outlined) leave a surplus of money in your pockets.
Unless your rental is rent-controlled, this is only true in the very short term. Most rents go up over time.
The payments on a fixed-rate mortgage do not go up. So the monthly real cost of the mortgage goes down over time. (This is even before taking equity into account.)
Renting for a long time is like having a mortgage that you refinance to a higher payment every couple few years.
But if you continually put the difference between the mortgage payment and the rent into an investment it could work out better. You're not accounting for it's possible time value. Again, no absolutes here, it depends on the numbers.
The difference you're investing will decline as the rent rises but at the end of 30 years you could well be in the same position as the guy who bought.
On the other hand, on a fixed-rate 30 year mortgage, the 30 years is the amortization, not the number of years the rate is fixed, which is typically 5 years I believe, after which it resets to the market rate. If you were disciplined you could adjust the mortgage - rent gap every 5 years based on the interest rate.
With a "fixed-rate 30 year mortgage", your rate, and payment, will be exactly the same in the first year as the 29th. A mortgage where the rate adjusts after 5 years is a 5-year ARM.
This is another aspect that should be considered and that is a huge plus in favor of buying. Because of inflation the cost of the mortgage will go down and after 30yrs it will be a lot cheaper. As a practical example, my family purchased a house 20yrs ago. At that time we payed the equivalent of $600 which was quite expensive. Today it's just nothing while the house itself gained a lot in value.
Inflation and taxes are easily forgotten when making financial decisions; but they are the two biggest advantages of owning vs renting, at least in the U.S.
Short-term cash flow is not a smart way to evaluate rent vs own.
The proper comparison should be the difference between rent payment and mortgage payment invested in S&P 500 30 years ago, not the difference just sitting there and earning 0%.
What about the aspect of being able to move without having to worry about whether you can sell you home or not? I believe what made things worse after the economy soured was that unemployed people stuck. Even unhappy people were stuck in jobs they didn't like/enjoy because they couldn't move to another part of the country (or state). One must not forget about opportunity costs in buying vs renting.
Unless your rental is rent-controlled, this is only true in the very short term. Most rents go up over time.
The payments on a fixed-rate mortgage do not go up. So the monthly real cost of the mortgage goes down over time. (This is even before taking equity into account.)
Renting for a long time is like having a mortgage that you refinance to a higher payment every couple few years.