[lowside67]

I used the actual rate I qualified for and currently have, which is prime - 70 or 2.0% currently.

Maintenance is a pretty variable cost and very hard to estimate. We are looking at a 5 year window so it's pretty unlikely it's going to need a roof or something major during that time if you didn't plan for it but an adjustment would be fair.

I sure hope you didn't pay $133K in realty fees on a $1.9MM house! Pretty much the most you are ever going to spend is 7% on the first $100K and 2.5% after that, and virtually any properties over $1MM are negotiating to less than that, but I have put the whole piece in ($49,470).

I disagree highly on your investment vs property value rates. I was throwing you a bone on that one but the reality is my calculations are for 5 years from now. We are in a low interest rate environment and sustained double digit returns are pretty much a non starter without an unacceptable degree of risk to compare it to a personal residence. Commercial clients are buying GICs at 0.95% and many funds would be lucky to do 5% a year. On the other hand, actual returns for housing have been in double digits and a 5% estimate is pretty soft.

I mean you can put anything you want in the calculator and do the math. I decided to put 3.7% as the housing growth which is the average over the past 30 years and decidedly the lowest possible option.

In this scenario, renting yields a net worth of $492k in 5 years, owning $589k in 5 years.

In the (more likely in my opinion) scenario that houses will continue to do 5% and investment returns will be closer to 7% with an acceptable risk tolerance.

In this scenario, renting yields a net worth of $455k and owning yields a net worth of $701k.

As is evident, the leverage in owning a place makes it incredibly sensitive to overall performance in housing, while the fact that you don't enjoy (or suffer from) any on the renting side means you are much more insulated - you don't see as big gains or losses.

I rented for 10 years because I deemed it the right thing to do, and the evidence is clear from all my peers who bought that you didn't need to be particularly adept or smart at picking the right place or area, anybody who bought is well ahead of those who did not.

I'm not fighting you, I'm simply saying that for many years I made the black and white identical argument to you, and now with rents increasing and housing prices increasing in value, it is closing the gap rapidly. It's worth doing the analysis.

Mark