I think the reason you are getting downvoted (I upvoted) is because you are making statements like this:
"buying is almost always better"
"This nyt analysis isnt correct"
I think the point of what you are saying simply is if you find the correct set of circumstances in terms of the rent you are able to get for the house as well as the market conditions, cost, interest etc. it makes sense to find a renter (taking a whole host of other specifics into account as well) and, assuming housing continues to increase in price it's a strategy to have an asset many years later (could be 15 to 25) that you have no mortgage on and you are collecting rent.
This is a pattern that I have seen many people do and, once again, given the specifics of what you are buying (and when) is something that seems to make sense in many cases.
Oh, one other important thing that I don't feel people are taking into account.
When you use your strategy you also have a form of forced savings because your money is tied up. So when you wake up 20 years later with a paid off asset you have that asset and haven't spent the money on other things.
Here is another example of forced savings.
You own a business and that business has a value at the end of 10 or 20 years and you can sell it. Vs. you are a consultant and have no asset value to your business but make more money than the business owner does.
The consultant could of course take a part of his earned income every year and sock it away. But many if not most people aren't disciplined enough to do that. So making less and building an asset is a form of forced savings.
People can do all the math they want to justify any decision of course but taking psychology into account and people's spending habits (given money in their bank account) is also important as well.
There are cases where renting makes more sense. But they're usually in very short term situations, 1-2 year domiciles or in freakishly weird markets, weirder than SF or NYC markets to be honest.
It can't be said enough in this discussion also, the notion that a renter will have all this extra money that they can invest highly liquid, better than housing, investment options just doesn't work out in general. The post I linked to elsewhere in here goes into that in some depth, even goes over a couple scenarios.
Business property I don't think is a good proxy for housing. Business value can swing wildly up and down and there's far less of a guarantee that your business will even be worth what you put into it than in housing. You can literally pour tens of millions of dollars into a business year after year and have it be worth $0, but I can almost guarantee that I'll be able to sell my house after 30 years for at least what I paid into it (the principle, I agree that interest is harder to recoup). More likely, I'll be able to sell it for something far in excess. Even people who bought at the very peak of the property bubble will likely make a small profit.
But I also do agree that it's not a very liquid asset. It's hard to get money out of your house, but not impossible:
- After it's paid off, all the money you were paying is now liquid
- You can rent out parts of your house, in sometimes non-traditional ways, I know one guy who rents out parts of his unfinished basement as temporary storage for people doing overseas employment. Another rents her property as horse grazing pasture. Another uses their very nicely decorate home as a shoot location for local photographers and charges a small site fee. The list goes on. Not all of these are impossible for renters, but a great many of them are.
- You can use equity in your home for personal loans. It's not the same as liquid capital, but being able to raise a few hundred thousand dollars quickly can be useful and something renters can't do at all.
- if you have lots of land, sometimes you can sell off parcels for other people to build on, or you can repurpose it into business use
- you can sell it outright. One thing my wife and I are considering is retiring to a place with very cheap rent and just converting our home value into a long retirement in Spain or Italy. Basically our mortgage payment will get used twice.
No matter what, after any period of time, the renter still has lost every single dollar they put into their housing. Which typically represents the single largest expense for most people, consuming usually between 30-50% of their net income.
"buying is almost always better"
"This nyt analysis isnt correct"
I think the point of what you are saying simply is if you find the correct set of circumstances in terms of the rent you are able to get for the house as well as the market conditions, cost, interest etc. it makes sense to find a renter (taking a whole host of other specifics into account as well) and, assuming housing continues to increase in price it's a strategy to have an asset many years later (could be 15 to 25) that you have no mortgage on and you are collecting rent.
This is a pattern that I have seen many people do and, once again, given the specifics of what you are buying (and when) is something that seems to make sense in many cases.
Oh, one other important thing that I don't feel people are taking into account.
When you use your strategy you also have a form of forced savings because your money is tied up. So when you wake up 20 years later with a paid off asset you have that asset and haven't spent the money on other things.
Here is another example of forced savings.
You own a business and that business has a value at the end of 10 or 20 years and you can sell it. Vs. you are a consultant and have no asset value to your business but make more money than the business owner does.
The consultant could of course take a part of his earned income every year and sock it away. But many if not most people aren't disciplined enough to do that. So making less and building an asset is a form of forced savings.
People can do all the math they want to justify any decision of course but taking psychology into account and people's spending habits (given money in their bank account) is also important as well.