Just learned that when accounting for property tax and maintenance expenses for some properties in HCOL areas (namely CA), the age old truth that it is “cheaper to own than rent” is not true in this example.
But if renting is cheaper, how is the owner not operating at a loss and not closing shop / raising rent?
In: 5
When this is being said like this, it is implying ownership including a mortgage. If you do the math on the monthly payments, taxes, insurance, and all overhead and the monthly cost out of pocket is higher than rent. Then it is cheaper to rent. This is also referred to as being upside down.
When a person has equity in a property and an old mortgage or no mortgage the property works fine.
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