Question: Thanks for showing this point of view. Most people need a few years after college to move up in their companies or careers.

And other reasons too: to be sure that it is the area they want to stay in before buying a house. To save the down payment. Pay off student loans. Put the maximum into 401(k) plans, Roth IRA’s and IRA’s so they will have the longest amount of time to compound before retirement.

Renting can be a valuable tool in the early years to help build for the homeownership and retirement years.

Answer: I have not read every posting on this thread, so please forgive me if this has already been covered. The following applies to a primary residence, not investment property:

One item I have not seen placed into the formulas is that you have to live somewhere (For most of us). If I stay in my current house for fifteen years, I own it free and clear. I then have no monthly rent or mortgage expense, while if I was to rent the same house I would continue to have rental expense until the day I die. (Yes, I know this is very difficult to calculate for because the numbers change for every year I stay after the mortgage is paid off.)

It use to be, before Americans became such a mobile lot, that a thirty year mortgage was part of the retirement package. By the time you paid off your mortgage, the kids were out of the house and you were ready to retire. You owned your house free and clear, your monthly housing costs decreased just as you retired and your income decreased. It was a wonderful balance. This worked when people stayed at the same employer for many years and stayed in the same town and house for most of their adult lives. We all know that isn’t the case anymore. Nor are Dorothy and Toto in Kansas anymore.

So for somebody staying in the same place for many years, well, many, many years, buying does become much cheaper. (Yes, I know, you then wait until rates are low, refinance, then invest the money for a higher return…. Remember, we’re talking retirees here.)

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