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Racket.

A racquet is what you hit your insurance adjuster with when you're tired of his racket.

Do you live in Florida?

Once you factor in things it mentions like insurance, taxes, upkeep along with others like a down payment then it's very easy to see where the 14% numbers comes from. Frankly, I'm surprised it's only 14%. There's a lot of additional and hidden costs with home ownership.

For me, I'm in a condo that we bought with a 15-year mortgage during the pandemic. My mortgage (including escrow/taxes and insurance) plus HOA fees is about $2100/month. My old apartment (including monthly pet fee) was more than that when I lived there. It's currently listed for $2500/month (big complex, not necessarily my unit).

I promise all y'all I'm not spending $400/month on homeowner-specific costs. And, I could reduce my monthly cost by moving to a 30-year mortgage instead of a 15-year mortgage.

Edit: looked up my old apartment again. Holy shit, it's listed for $2750, which doesn't include a pet fee.

Most landlords bought the place earlier when home prices and mortgage rates were lower, or they just own the place outright and don't make any mortgage payments.

This article is about choosing whether to buy at current rates or rent at current rates. If you bought a place 10 years ago for half the price it's worth now and a 2% interest rate then you're probably going to be paying less then renting

I believe they are taking into account the cost to purchase these days since interest rates are higher, ergo high mortgage payments.

As someone else mentioned most landlords have locked in rates at this point. Not many new landlords.

I agree, and came in here to say the same thing. I think the data is being skewed by the fact that many (not all, of course) rental properties are subdivided into multiple units (or built that way in the first place). People commenting about how it's considering modern costs, well, they must not have read the first two sentences of the article:

On paper, owning a home is almost always more expensive than renting — about 14% more, on average, after factoring in expenses like insurance, taxes, and upkeep.

But the difference has grown much more extreme in recent years as just about all homeownership costs have ballooned.

The only way you can arrive at that 14% number is if you're averaging in multi-unit apartment buildings. Very few, if any, landlords are out there subsidizing their non-family tenants by charging less than the normal costs of ownership. If most landlords are losing money year over year, well... at that point just sell the property.

When you mortgage a home as an investment property, you are leveraging your money 5-1 (on a 20% down payment)

If rent covers 90% of the mortgage, you still make an absolutely huge profit amortized over the loan.

If you consider the tax incentives (interest write off, depreciation, capital gains deferment, pass through deduction) the gap in the rent can be covered.

Consider paying 50k down on a 250k house, the. Paying an additional 15 percent over the life of the loan (around 40k) to cover for gaps in rent.

Over the life of the loan you turned 90 grand into 250 grand (and a house is an appreciating asset, so it will likely be worth more than 250 by the end of it all)

Deduct depreciation (value of the home minus land value over 27.5 years) and carry over losses can even make up for the gap of rent you pay entirely over time.

The price of lumber never really went back to where it was before covid.

https://tradingeconomics.com/commodity/lumber

The price in at the start of 2020 was ~$377.55 per thousand board feet.

https://www.bls.gov/data/inflation_calculator.htm

$377.55 in January 2020 is $460.34 in July 2024 dollars.

The price of lumber in July 2024 was $423.27.

So it's gotten back down to and fallen below pre-COVID-19 prices in real terms.

It does look like the price has risen from July 2024 to November 2024, so it's presently higher, but it has not stayed above pre-COVID prices since the end of COVID-19.

Excluding mortage, the montly cost of owning my house is 275€ which includes water and electricity.

That's also excluding regular maintenance or emergency repairs that a landlord would be (often reluctantly) responsible for. It is also possible to do big, expensive, necessary renovations on a house and have it hardly affect the value at all.

It's not about what your mortgage payment is. Interest rates are significantly higher now. See how much the same house costs at the current price and interest rates. Most likely it's significantly higher now as both rates and prices have increased.

Maintenance cost and property taxes too though.

Because if you buy a house, it's just you and the bank, so you need to cover the banks risk for you as an individual, meaning higher interest rates. Larger purchases, or a group of houses are covered by different loan types, flexible rates at for example international rated plus half a point.. and that is mich cheaper. The rate might fluctuate.. but if the government strongarms the fed to keep the loans practically free, companies borrow for free plus half a point. And that is a lot of difference.

Two things: first, landlords aren't entitled to a profit, and second, landlord input costs might be completely different from an owner resident.

On the first point, if the landlord's costs are $2000/month, and the market rent for that unit is $1900/month, the landlord would rather lose $100/month on a lease than lose $2000/month on a vacant property.

On the second, it might be that the landlord bought the place when it was much cheaper, or has a much lower interest rate than what is available today. So if the landlord's costs are $2000/month for a property that would now cost $4000/month at today's purchase prices and interest rates, but can rent for $3000/month at a profit to himself.

Similarly, some volume landlords can spread certain costs around and not pay nearly as much as an owner resident. It might cost $1200 to hire a plumber to do a 6-hour job, but it also might cost $150 to simply have a plumber on the payroll to do that job, if you've got enough steady work that it's cheaper to have him around.

repair leaking pool equipment

You have a pool. You are already head and shoulders above most people, including people who are also mortgaging a property.

But you're building equity! /s