I was listening to an economist speak a few days ago and he talked briefly about real estate and the debate between renting and buying; and, something he illustrated got me thinking.
His point was that the ultimately decision on which is better from a purely economic sense was relative to the specific numbers, which will obviously vary from time to time and from market to market.
But, to help illustrate that buying wasn't inherently superior to renting, he talked about property taxes and the repurcussion of not paying them, namely losing your home!. So, basically, even when we "purchase" real estate, we are still "renting" it in a sense from the government..ie, do we ever really own the real estate if the government can confiscate it for not paying their "rent"/taxes? This analogy got me thinking and in one sense for me lessons the divide between the concepts of renting or buying a home.
On a lighter note, he used a rhetorical example suggesting that any of us who own homes should go down to the local assessor's office and ask them how much we could pay in a lump sum to buy out of the property tax system so that we could truly own our property once and for all. You think anyone has even contemplated this? After all, it's just math and discounted cash flow, right!
His point was that the ultimately decision on which is better from a purely economic sense was relative to the specific numbers, which will obviously vary from time to time and from market to market.
But, to help illustrate that buying wasn't inherently superior to renting, he talked about property taxes and the repurcussion of not paying them, namely losing your home!. So, basically, even when we "purchase" real estate, we are still "renting" it in a sense from the government..ie, do we ever really own the real estate if the government can confiscate it for not paying their "rent"/taxes? This analogy got me thinking and in one sense for me lessons the divide between the concepts of renting or buying a home.
On a lighter note, he used a rhetorical example suggesting that any of us who own homes should go down to the local assessor's office and ask them how much we could pay in a lump sum to buy out of the property tax system so that we could truly own our property once and for all. You think anyone has even contemplated this? After all, it's just math and discounted cash flow, right!