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Arguments Against Owning a Home and Specialization of Labor

2 pointsby zacwitteabout 13 years ago

1 comment

kevinpetabout 13 years ago
These arguments are persuasive, but there are two items that aren't well addressed:<p>1. Principle-agent problem. If I have my own house, I'm more inclined to maintain it well. If I am a renter, I'm not inclined to, for example, change the furnace filter on a regular basis. If I'm a landlord, I don't have much incentive to treat a broken appliance as an opportunity to replace it with the optimal price / performance / efficiency replacement, but instead to simply repair it to functional or replace it with a low end item, because I can't capture the additional $10 / month the better one might be worth to the tenant.<p>2. Predictability of future expenses. If you rent, you are subject to changing rents. If you own, your only uncertainty comes from tax increases and maintenance. You can insure against things like fire and storm damage, but you cannot insure against rising rents.<p>I rent, but it's misleading to argue in favor of renting and completely ignore the benefits in the other direction.
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