Why is the alternative necessarily spending the money? If those funds can be taken to the bank each month to pay off a mortgage, why can those same funds not be taken to the bank to deposit into a retirement/savings/investment account?
This analysis is specifically taking into account that money is spent on housing either way. Otherwise, we'd be comparing the ROI of purchasing a house and renting it out as a business in comparison to other forms of investment.
>If those funds can be taken to the bank each month to pay off a mortgage, why can those same funds not be taken to the bank to deposit into a retirement/savings/investment account?
Right. What I'm talking about is the differential between the carrying costs of ownership, and the cost of renting, which is what's often referred to as 'forced savings'. Nowhere am I saying you don't have to pay rent. If renting costs less than the carrying costs of owning (which it often is), you can take those cost savings to the bank to be invested. This should also be factored into the cost comparisons.
Owners of rental properties wish to make a profit. Therefore renting is more expensive, month to month, than owning a property even after factoring in all costs involved.
The only time this isn't true is if the owner has a very old mortgage or outright owns the home.
This analysis is specifically taking into account that money is spent on housing either way. Otherwise, we'd be comparing the ROI of purchasing a house and renting it out as a business in comparison to other forms of investment.