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URL:  http://boards.fool.com/bob78164-writes-finally-intercst-presents-a-11043507.aspx

Subject:  Re: Investing after retirement Date:  7/13/1999  3:15 PM
Author:  intercst Number:  12075 of 76397

Bob78164 writes,

Finally, intercst presents a third option. Never buy a house at all -- simply rent and invest the difference. That option works well in a rent-controlled environment, where you can enjoy confidence that rent increases will be limited. Nevertheless, as others (I believe including JAFO31) have pointed out, rent will increase, but the mortgage will not. Thus, there is a risk that in time, there will be no difference to invest; in other words, that today's rent will be more expensive than, say, the payment on a 20-year-old mortgage.

Surprisingly, "rent controlled" towns like San Francisco and New York City have very high apartment rents while cities where the free market reigns like Houston and Phoenix have modest rental rates. I suspect that the abundance of buildable land and abscence of any real zoning laws are responsible for the "overbuilding" of apartments in Houston and the resulting low rental rates.

In the case of San Francisco and Manhattan (New York City), the fact that there are few places to build new housing stock keeps rents high.

intercst
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