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URL:  https://boards.fool.com/this-is-all-very-theoretical-and-academic-as-no-31222601.aspx

Subject:  Re: Home Ownership not a good investment Date:  4/24/2014  3:33 PM
Author:  ptheland Number:  74847 of 100969

This is all very theoretical and academic, as no two people would ever live this way....but it was a kind of fun exercise. But it did show the affect of the large costs of buying and selling...which sometimes gets overlooked when comparing just the monthly costs of buying vs renting.

No offense meant, but that was probably what you chose to see. I think these exercises are best used to understand the sensitivity of the various estimates and projections. Offhand, I'd guess that you needed to estimate the future inflation in rents, the future inflation of housing prices (and taxes and insurance and maintenance), investment returns, mortgage interest rates, and probably a couple of other things.

I don't believe these artificial comparisons are very good for drawing conclusions. Instead they're great for figuring out the important variables and the unimportant variables. If the important variables are ones under your control, then your future is in your own hands. However if the important variables are ones you can't control, then you need to figure out how to make your decisions given the uncertainty presented by those variables.

--Peter
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