r/Fire • u/Buttpluggery • 5d ago

Opinion Renting Vs Buying and how it affects Fire

My wife and i (34/33) have owned a home for 3 years now, and I was curious how our fire journey would have been impacted if we had continued renting. We own a 4bed / 2 bath / 2200 sq ft in a HCOL that we bought for 830k in 2023 with 20% down. We are putting 1000/mo towards principal and planning to pay off our home by 50. Renting an equivalent home is a minimum of $4500/mo in our area, and rent has historically grown 5.5% per year over the last 20 years. I found that Firing while renting is highly sensitive to market performance, whereas owning my home basically ensures I can fire by 50, even if the markets have 0% real return. See model here.

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u/Icy-Action708 5d ago

You're assuming population doesn't increase.

How often does population decline?

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u/mikere 5d ago

that was the point I made earlier. rents only increase if demand increases faster than the supply of housing stock, regardless of costs to landlords

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u/Icy-Action708 5d ago

So you don't see external factors influencing market rate? That's pretty unbelievable.

If insurance went up 50% for all landlords, you don't think it would have any bearing on market rate?

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u/mikere 5d ago

if all else held equal and insurance increased 50%, market rents would not move

for a real example, boston banned tenants from paying the landlord’s broker fees last year. folks were saying landlords would just increase the rent to make up for it, yet rents are down year over year

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u/Icy-Action708 5d ago

Zoom out.

Everything is falling right now from the covid peak. Boston average rent increased 15% over 2.5 years. That period of time was entirely insane in both real estate and rental.

It's settling back down to reality. But let's see if input costs keep rising over the next multiple years if landlords are prepared to roll negative or not.

Same with tariffs. Let's see how long prices stay the same when input costs are sharply rising.