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URL:  https://boards.fool.com/just-curious-have-you-chosen-to-rent-instead-of-26696680.aspx

Subject:  Re: Annual FIRE update #4 Date:  6/1/2008  6:59 PM
Author:  tangofan Number:  4584 of 5260

Just curious - have you chosen to rent instead of buy because you've decided it will get you to FIRE faster? I rent and struggle with whether buying a home would slow my FIRE progress.

Hi FIgirl,

Please allow me to comment on that question. As far as the pure monetary decision of rent vs. own goes, there are some calculators on the web that allow you compute, what's better, e.g. this one: http://realestate.yahoo.com/calculators/rent_vs_own.html

Among other things it depends on the price-rent ratio as in how many year's rent does it cost to buy the place: http://stocksinvesting.wordpress.com/2008/03/21/house-prices...


IIRC in the SF-Bay area, where I live, the ratio has been close to 30, so there it's a no-brainer to rent. Of course you need to invest the "saved" money to profit from this, which I do. If the price-rent ratio is very low, it might be better to buy.

One problem of course is that when people buy a house they might buy something bigger than what they rent. E.g. I rent a one-bedroom-apartment, but would also buy something bigger.

Bernhard
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