Owning A Home Isn't Necessarily Cheaper Than Renting

Many home ownership get rich books tell you that by paying a monthly rent of $1,500, you can easily waste up to $540,000 over the cost of 30 years even the landlord isn't going to raise the rent.  But these books forget to tell you that by owning a home or a condo that is purchased at $385,000 for example (many condos in major cities where the jobs are,  easily cost more than this price) ,  the interest payment + annual property taxes + HOA fees actually add up to be much more than $540K in the course of a 30-year fixed rate mortgage (at  the current 4.25%), assuming your effective income tax rate is about 25% which is pretty much the average rate for the majority of homeowners who can afford a 30-year mortgage for this price range.  If your income tax rate is any lower, you get much less tax deductions and therefore increase your cost of home ownership. Income tax deduction is like a discount for your existing interest payment and property taxes, the higher your effective income tax rate, the bigger the discount, but it doesn't mean you don't have to pay any interest or property taxes after tax deduction.  This doesn't even include the deterioration of the condo in the course of the 30 years that will cost you extra bucks to repair and to remodel; just so it can still be livable for you, or presentable to your potential buyers when you attempt to sell it.

In an ideal world where there is no property taxes and where local governments don't raise property taxes on a yearly basis, and where the homes are so well-built that there will never be termites attack, plumbing pipes bursting, and the roof chipping away, yes, owning is definitely cheaper than renting.  When you find a country like that, please let me know so I will move there too.  But until then, owning a home in America is not necessarily cheaper than renting, particularly when a home requires you to put 20% as down payment for 30 years.  Holding that kind of money down for 30 years comes with a hefty opportunity cost, which further downgrade the financial benefits for owning a home.