Curiously, this type of argument does not seem to me to be applied to other types of rent/own decisions. Whenever someone is considering buying a car, for example, they tend to say something like "I really need a car, and in the long run it will be cheaper for me to own one than to keep renting" rather than "I need to buy a car because then I'll at least have something of my own instead of just throwing my money away on renting a car whenever I need one."
Housing is a good just like any other. To most people, it is actually one of the most valuable ones. Why is it then that renting housing is perceived as a waste of money while renting other, less valuable things, is not?
Because of the security it provides. Renting or owning a car does not provide the level of security that owning a home does. If you own a home, you have all sorts of legal and policy protections against others taking it away from you. It should also gain some value over time. The main reason it is so highly valued, though, is that you can live there indefinitely. Renting doesn't provide this level of security. Likewise, cars lose value over time, and you can't live in them as successfully as you could a permanent physical structure. They serve only one purpose.
ReplyDeleteI think it is solely the idea that you could be putting the money into an investment rather than living on the money for a month. At the end of the month, one yields potential value while the other's value has been extinguished. It is just colloquially wasted, an opportunity cost thought of as too great to pass up....
ReplyDelete