In my experience (in the US), the nicer a house gets, the more you save buy owning the house vs renting it. For example, renting a house in my neighborhood costs $1200 per month more than my mortgage. It’s obviously not an optimal financial situation, since I could sell this house and rent a run-down 2-bedroom apartment for even cheaper, but I don’t want to live in a run-down 2-bedroom apartment anymore.
I suspect this is because of the disconnect between what makes rentals risky for landlords (tenants screwing things up) and the benefits of renting for a tenant (if you screw things up, there’s limits to how much it’s your problem). Once you reach a certain expense / necessary upkeep to remain nice-looking level, the only way to make it work is to either have insanely high rent so the landlord can afford to fix the place up if a rental goes bad, or to make the landlord and tenant the same person so their desire to not-screw-it-up is aligned.
Although for the record, at least in the US, high home ownership rates are a sign of a problem with society. Government planners think everyone should own their house whether they want to or not, so renters have to pay additional taxes which are used to subsidize home owners. The crossover point would presumably be different if our tax system was fair.
In my experience (in the US), the nicer a house gets, the more you save buy owning the house vs renting it. For example, renting a house in my neighborhood costs $1200 per month more than my mortgage. It’s obviously not an optimal financial situation, since I could sell this house and rent a run-down 2-bedroom apartment for even cheaper, but I don’t want to live in a run-down 2-bedroom apartment anymore.
I suspect this is because of the disconnect between what makes rentals risky for landlords (tenants screwing things up) and the benefits of renting for a tenant (if you screw things up, there’s limits to how much it’s your problem). Once you reach a certain expense / necessary upkeep to remain nice-looking level, the only way to make it work is to either have insanely high rent so the landlord can afford to fix the place up if a rental goes bad, or to make the landlord and tenant the same person so their desire to not-screw-it-up is aligned.
Although for the record, at least in the US, high home ownership rates are a sign of a problem with society. Government planners think everyone should own their house whether they want to or not, so renters have to pay additional taxes which are used to subsidize home owners. The crossover point would presumably be different if our tax system was fair.