jamin wrote:
Precious Roy wrote:
Also, rent goes up, but mortgage payments stay flat. The bet against inflation on mortgage payments can really pay off after 15-20 years.
But taxes in absolute terms go up proportionally to the house price, usually more than proportionally because the tax rate gets raised over time. Many people end up taxed out of their house after they've paid off the mortgage.
The people who get taxed out of their houses are people who have little or no retirement savings and bought in areas that have gentrified significantly. My neighborhood is that kind of area. A lot of people sold because they could not pay their taxes. What happened to them? They got $400-500k for homes they bought for $60-70k in the 90s. Had they rented the entire time, they would have been out on the street with nothing because they didn't make enough money to have a decent retirement account. So, in that "taxed out of their house" hypothetical, owning a home is a lifesaver compared to being forced out due to high rent. The homeowner has a big check and the renter has nothing.