Rent is not wasted money
Neither is mortgage interest, property tax or maintenance. Compare the full carrying cost of each option, not rent against principal.
Research desk
Real Estate & Property
Property is the largest leveraged position most households will ever hold, and it is sold almost entirely on narrative. This desk replaces the narrative with arithmetic: what ownership actually costs after taxes, maintenance and transaction friction; when borrowing against equity is defensible; and whether a rental underwrites as a business or a hope.
6In-depth guides
6Embedded models
~85 minFull desk reading time
The rest of the desk
Full library
Every property guide
How to use this desk
Four questions before any offer
In order of how much money they move. Most buyers start at question four and never revisit the first three.
- How long will you hold it?Transaction costs run 8–10% round trip. Below roughly five years, that friction usually swamps any appreciation you earn.
- What is the true monthly cost?Principal and interest is the smallest honest version of the number. Taxes, insurance, maintenance and opportunity cost on the deposit are the rest.
- What happens if the value falls 20%?Leverage cuts both ways. A 20% decline on an 80% mortgage erases the entire deposit and traps you in the property.
- Which mortgage, at what rate?Only now does product selection matter — and it matters far less than the three answers above.
Underwrite before you fall in love
A rental that fails a DSCR test at today's rates does not become viable because the kitchen is new. Run the numbers first.
Closing costs are negotiable
Lender origination and points are priced by the lender, not fixed by law. Roughly a third of a closing package can be challenged.
Run the numbers
Models for this desk
Sequenced reading